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I am pretty new to this estimates/sales thing but realize that it is vital to my survival. I am always interested as to why I don't get some jobs, simply so that I can get better at estimating. Then something like this comes along....
Ran into an old aquaintence/buddy at the gym. Not a good friend but a nice guy, always thought of him as a cool dude. So I tell him that I am doing some contracting and he says that he has some small jobs, he is really busy since he went back to school, would I be interested? I set up a time to have a look and it is all pretty basic stuff, some trim, patching walls, painting, etc. so I tell him I will get back regarding a price. He wants to buy all material so I estimate on a T&M platform with a capped price with the understanding that if I complete the job early, he only pays me for my time.
He initially balks at my hourly wage, asks me if I can work with him on the price. I say sure, let me pinpoint your priorities and see if I can get a better price. No dice...its a small job so the margins are really tight. I just can't find any more wiggle room. So I meet with him again and after bantering back and forth I finally state what I should have said during our first meeting, "How much were you wanting to spend?"

Here is the funny part.....it was thisclose to my original price! So I go home and send him another estimate. This one has me working for 2 more days doing the exact same jobs.
I start work on Tuesday.
Guess he thought my price was too high for 3 days of work but just right for 5 days of work. I may keep some work for that 4th day, just so he really thinks he is getting a good deal!

Another lesson in sales/estimating! Anyone else have this happen to them? What point during your estimating does the customers budget get discussed? I always feel that if I mention it too early, they are turned off, like I am just fabricating my estimate around their budget.
 

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id get good at giving a rough $$ before you go to the house

i have flat rate prices on many of my tasks....i can quote them over the phone quickly

i would stay away from customers like the one you describe......it sounds like your begging for work with him.....begging is never a good position to be in and your having to play games with hours to keep him happy......

not everyone is your customer...there is no magic to making a customer yours or not...either they fit into your pricing model or they dont.....you shouldnt have to twist and bend to make it work......im willing to let customers go all the time...

ive found cheap customers always expect the most.....some are never satisfied

when he complained about your hourly rate you should have let him go...he wasnt your customer
 

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................He wants to buy all material.............
As soon as I hear this, I'm gone. Customers buying material never works out. They always buy the wrong stuff, it's never on-site, whatever they get won't work.

I had a guy offer to buy the material for a basement finish he wanted to do. Said he'd get the 60' of wire needed to do the job. I said it would take at least 750, if not 1000, to do it. He said, "But, the basement is only 50 foot long!".......... :sad:
 

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Home Repairs
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I would have to agree with the responses. I run into people all the time who think they can haggle me down just because I am a one man show. I really get a kick out of the ones who think they "know everything" about what they are asking you to do, and they already have a set price on the job before you arrive based upon their deep knowledge. I can't get away fast enough from these types.

Set your price and stick to it. Very few customers realize what it actually costs for you to operate a legit business.
 

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Good responses! Bidding is an art form, go too high and you may lose the job. Go too low and you shoot yourself in the foot. I just looked at a small job for some folks I have done work with before. I just put out a number to paint a 8x14 laundry room. Two separate colors, patching a bunch of holes, ten foot ceilings, soffit, working off a scaffold, installing two cabinets with moving the W/D and a bunch of furniture around several times because they have no where to put the stuff while I am in there. On top of it I have a bunch of cutting in around the furnace/water pipes/sink/water softener while still having 10 foot ceilings up above these hard to reach areas. I tell them 4 beans and her first response was "well that's too much" :eek: I so desperately wanted to ask well, what is the right price? I imagine she would only have had two possible comebacks. I thought it would be ***x but then I would have said well "based upon what" Or she could have said ummm I don't know but that just seems high. Well then I would have said "compared to what"? The truth is that people arrive at a fixed number based upon either they're budget or they pull a number out of their butt. The price is what the price is based upon time/material and accessibility. Remember this isn't lets make a deal, give them your "best price" the first time and stick to your number.
 

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..... give them your "best price" the first time and stick to your number.

I never start out with my 'best' price. I start out with a FAIR price.

For instance, for a given job my starting fair price might be $5000. When pressed for a better price, that would be $6500. If asked for my best price..... well, now we're talking $9250. :whistling
 

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Are you sure he is not thinking that you getting screwed?
 

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I think unless the customer is somewhat well experienced/knowledgeable when it comes to trades and construction even breaking the price down is a mistake. I'll only work hourly for friends or if the HO is acting as the GC on a larger job and is competent.
 

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...What point during your estimating does the customers budget get discussed? I always feel that if I mention it too early, they are turned off, like I am just fabricating my estimate around their budget.
The fact that you should be paid well to work on their place is not a dirty little secret - it is the only reason you are talking to them. If they are turned off by it early, they will be turned off by it later, when you're trying to finalize a contract or when you're trying to get paid.

Try not to get past 5 minutes of the first phone call before talking about budget. Unless it's a good personal referral, that will be the end of 90% of the conversations, and you're better off for it.
 

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Nail Driving Fool
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I can't tell you how many times I've knocked $50 off a bid and got the job. Never understood that one. But I guess $50 means a lot to some people. And to clarify I'm talking $5000 + projects.



Have one client who gets me to bid first then "shops around". Always calls back later with a stack of bids from my competition. I can hear her rustling papers on the phone. Something like this:

"Robinson1, the bid you submitted was $$$$$, well John says he will do it for $$$ less and Joe will do it for $$$, and Will is within $50 of you, and Doug wants $$$ more. Sounds like you are pretty much in line. When can you start?"

Every freaking time, its gotten to the point it's comical. And she does about $10K of business with me a year. As a matter of fact I've got a bid out right now for her. Just waiting for "The Call".
 

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Nail Driving Fool
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As soon as I hear this, I'm gone. Customers buying material never works out. They always buy the wrong stuff, it's never on-site, whatever they get won't work.

I had a guy offer to buy the material for a basement finish he wanted to do. Said he'd get the 60' of wire needed to do the job. I said it would take at least 750, if not 1000, to do it. He said, "But, the basement is only 50 foot long!".......... :sad:
That's about as good as the guy who asked me to texture a 12x16 ceiling for him. Said he had everything I needed and the room was prepped.

Went to do the job, carpet floor not covered, all furniture still in place, pictures on the walls, had a couple bed sheets thrown over a leather couch and O-N-E gallon of mud. :wallbash::huh::wallbash:
 

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Way back when we still mixed our mud from powder..... a guy was going to supply all materials to tape his 1200 sq ft house. When we got there he had 5 -2 pound bags of joint compound, 75 foot roll of tape and 1 gallon pail of water. I fell over laughing!!!!
 

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Nail Driving Fool
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Way back when we still mixed our mud from powder..... a guy was going to supply all materials to tape his 1200 sq ft house. When we got there he had 5 -2 pound bags of joint compound, 75 foot roll of tape and 1 gallon pail of water. I fell over laughing!!!!
What was he wanting done a closet? :laughing:
 

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(Poles & Carpenter SFO)...... I sort of get the idea of what you guys are saying about discussing budget during a initial conversation, but wouldn't you guys want to eyeball the site at the same time while discussing money? I always get a better feel how organized the situation will be, and get to see any PITA factors involved when I visit the site.

At the same time, I fully understand that time is money, and some jobs could be a 100 miles away. About 90% of my work is within 10 miles from my home, so I might be locked into a different perspective?
 

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(Poles & Carpenter SFO)...... I sort of get the idea of what you guys are saying about discussing budget during a initial conversation, but wouldn't you guys want to eyeball the site at the same time while discussing money? I always get a better feel how organized the situation will be, and get to see any PITA factors involved when I visit the site.

At the same time, I fully understand that time is money, and some jobs could be a 100 miles away. About 90% of my work is within 10 miles from my home, so I might be locked into a different perspective?
All the eyeballing in the world ain't going to add money to their bank account...

I try to have price discussions on the phone as much as possible, sometimes it works out, sometimes it doesn't. It saves me a lot of time.
 

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All the eyeballing in the world ain't going to add money to their bank account...

I try to have price discussions on the phone as much as possible, sometimes it works out, sometimes it doesn't. It saves me a lot of time.

You are stating the obvious. Anyone can say whatever they want over the phone & internet. The job site layout can make a huge difference how I price.

I recently gave a guy "ball park" figure over the phone for hanging/finishing 65 boards after asking a him about (high ceilings) (windows cased or not). He said all the windows were wood cased and no high ceilings. I stopped by the property and saw that all windows were sheetrock cased, and his entire family, dining, and kitchen were 18 foot" vault". He obviously didn't know what I was asking, or he was hoping I would let it go.
 

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adamjoe:

I've made no secret that I've been a huge fan of homeadvisor (formerly servicemagic) on this forum. One of the best reasons I like it is because of the public homeowner feedback. I consistently get some low scores on "price" and I couldn't be happier. If you aren't getting some negative feedback about your rates, you aren't charging enough.

I figure you want about a 20% whine rate. Too much and you're out of business, too little and you're out of business too, or at least much poorer than you should be.

Joe
 

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Talking Head
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(Poles & Carpenter SFO)...... I sort of get the idea of what you guys are saying about discussing budget during a initial conversation, but wouldn't you guys want to eyeball the site at the same time while discussing money? I always get a better feel how organized the situation will be, and get to see any PITA factors involved when I visit the site.

At the same time, I fully understand that time is money, and some jobs could be a 100 miles away. About 90% of my work is within 10 miles from my home, so I might be locked into a different perspective?
They didn't say that YOU have to give the customer a budget. The customer needs to give you a budget. If they won't talk about money with me then I'm done. I'm not shy about shooting out a ballpark anymore because I just don't have any desire to go waste two hours of my day on a job I would never take.

Someone wants a bathroom? I ask how big it is. 8x10? Well sir, there are a lot of factors in designing and building a bathroom but a nice bathroom that size, with a custom shower, typically costs around 12-15 thousand. What's that? You only want to spend $3500? Well sir, that's great, there's this site called Craigslist. You're gonna love it.

I have people say they don't want to give me a budget and I tell them that they called me and that we're going to have to talk about money before I can even start designing a project so we might as well get it over with. I'm not a dick about it, most people just have no idea and are afraid to sound dumb. I'll relate some recent projects so it doesn't sound like they HAVE to spend that much but that's what's happening in their area.
 
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