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Discussion Starter · #1 ·
Greetings, I'm hoping you guys can help me out without violating the NO PRICING rule. I went to an estimate yesterday and the notes from my office manager said this, "Contacted us in June 2013 for the same estimate (wood rot) Service call fee $69 was never approved. Customer re-contacted us in April 2014 for the same thing. Updated service call fee $99 sent. Forwarded us email with photos, which was sent to another contractor, we were cc'd. Customer is price shopping. Not likely to approve service call fee."

I treated the customer like all the others and then doubled the estimate. I was praying they would say no as it is in a remote area and I'm booked til August. I also try to avoid price shoppers, they usually want filet minion on a McDonalds budget. The customer sent this email today,

"Good afternoon,

Just wanted to make sure you received my email yesterday concerning getting on the books for an appointment to get the work done. Mr. Bailey was awesome and we were very impressed with his assessment (we have had several...smile)! We would love to get an appointment in early August but will wait to hear from you...smile! Also, please let me know how much we need to put down "upfront"....it is probably on the estimate but I don't have it with me...LOL!

Thanks so much,"

So now I'm concerned. I honestly take pride in being one of the more expensive contractors. I take ALOT of pride in doing that and staying booked out 4-12 weeks year round with repeat or referral business. So, was I the cheapest? The nicest? The last in a long line of estimates? The job is 90' of 8" PVC fascia, 110' of 5" seamless k style gutter, 60' of 12" soffit and 2x6 sub fascia. It's all 2 stories up, and a days labor for 2 guys. My estimate was between 3 and 5 THOUSAND. Obviously, I knew he was shopping around thanks to the office managers note's. Clearly I priced it so high he would say no, or did I just price it right? Have I been leaving money on the table all along?
 

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How could you know from one customer? They rang all sorts of warning bells for you--and might have done the same for the others that gave them prices.

Many bargain shoppers shoot themselves in the foot----you doubled yours--the others may have done the same thing---

However, to see it your theory has merit--start jumping up your prices snd find out if you still winenough to make up for the ones you lose---

Inflation has caused my pricing to go up ---and the customers are not put off by the higher prices---
 

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had a job once on an old farm house...never thought i had a chance...i just threw prices down as fast as i could type....and i won the bid.....i made like 100%-150% profit

sometimes customers throw off such bad vibes that either no one else gives them a bid or they double the price just to throw a $ on paper and get it off their desk......all the planets are in perfect alignment for you it seems....enjoy the profit and take a nice vacation
 

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Master of none.
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hell, I wouldnt worry why they called you even though you were actively trying to get turned down, just DO IT. good profit in that estimate.
 

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Construction Marketing
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4 Posts
Start raising all your prices until you begin losing work for being too expensive. When you start hearing that from potential clients (or just not getting as many jobs), back off a few percentage points. You'll make more money, work less, and be more satisfied.

Also, I've found that many of the people who pay more are actually happier with the project and easier to work with. Those who pinch pennies are either very cheap and want to stick their nose in every step of the project, or barely have the money to do the job.
 

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The Ultimate Wire Hider
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4,455 Posts
Sometimes customers pay the price simply because they don't know what it costs. Rather than encountering the fly-by-night hack that asks for $20,000 upfront in cash, they crossed paths with you instead.
 

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Premium Member
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Discussion Starter · #12 ·
tedanderson said:
Sometimes customers pay the price simply because they don't know what it costs. Rather than encountering the fly-by-night hack that asks for $20,000 upfront in cash, they crossed paths with you instead.
Perhaps, but this particular customer was honest about getting multiple quotes. If my bid was the cheapest after I doubled it for the pita factor? That's what worries me.
 

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Interior Remodeling
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If your that worried just ask them where you stand price wise compared to their other quotes. Most people will tell you.
 

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Your worrying about the other guy's price. If your price is good and you will make money, I don't see a problem. Everyone hates to leave money on the table, but I wouldn't worry too much about it as long as you figured it right.
 

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Licensed Gas contractor
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708 Posts
Why kick yourself afterwords by finding out someone elses price. You got the job for what you bid it at and you should be making money. Finding out what the other guy quoted won't do you any good. What materials where they going to use and maybe they were busy and just bid it high so they wouldn't get it.
 

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Discussion Starter · #17 ·
gastek said:
Why kick yourself afterwords by finding out someone elses price. You got the job for what you bid it at and you should be making money. Finding out what the other guy quoted won't do you any good. What materials where they going to use and maybe they were busy and just bid it high so they wouldn't get it.
I'm making DOUBLE, did you read the whole thread?
 

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Licensed Gas contractor
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708 Posts
Great on making double. So why are you worried about what others are charging? You got the job and are making double. If you didn't get the job then I would wonder where I went wrong and what others are charging.

I just don't get the part where some people worry about what others are charging. I use to and then I realized I an charging what I want and need to live on. If the others want to make only half of me, then have fun with that. I bet they won't be around long at those discount prices. If you know your product prices and what you need to make per job to live, then you keep your prices there. If you want to raise the price, try it and see where it gets you. But stop worrying about the other contractors and what they charge. They might have higher overhead than you or any other number of variables.
 

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Discussion Starter · #19 ·
gastek said:
Great on making double. So why are you worried about what others are charging.......SNIP....... I
From my original post.... Clearly I priced it so high he would say no, or did I just price it right? Have I been leaving money on the table all along?

THE QUESTION IS; have I been leaving money on the table all along?

I appreciate you taking the time to reply, I appreciate your opinion. I don't appreciate asking a question and getting 2 replies from you that could be summarized as , who cares?

I care, that's why I asked. My price isn't based on what I think I'm worth, it's based on WHAT THE CUSTOMER THINKS I'M WORTH. (Or is willing to pay)

No hard feelings, caps used for emphasis.
 

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If you know what your short and long term expenses are, then you should be able to come up with a pricing plan for your work.

When we do our pricing matrix --- which is an Excel worksheet, I have separate line items (not for the client) that have a set added percentage to the job. For instance, long term debt ---money borrowed to start the business, which was an equity loan; 5 year loan for vehicles, and anything else that is a year or more to pay off. Short term debt - purchase price of products, tools, rentals, gas, etc. You can also add in expenses such as building rent, insurance, licenses, etc.

With all that, you can figure out what it costs to run your business for a year. And, you need to figure out, based on experience and a review of past years expenses, how much you need to have in reserve, such as bank accounts.

With this knowledge, you can figure out how much net profit you need to make on a job/project to meet your operational costs and other overhead expenses.

For example, I know that profits and mark up vary from project to project, but I know that mark up on materials will run from a very low 10% up to 50% based on cost and current market retail pricing. Our hourly labor remains constant, it's the number of hours per project that can vary. There are transportation, travel, parking, tolls and related expenses that are priced out per job.

Finally to cover overhead and long term expenses I will add a 5%-8% surcharge to every job............I came up with this numbers based on my company's financials.
 
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