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Discussion Starter · #1 ·
Do you guys find that you're losing money on the initial estimate, but then making it back and then some on work orders?

I've worked for 2 guys in the past that said that they would get desperate after putting in numerous bids with no job, so they would lower the price too much and lose their income (but have barely enough to pay for material and help). But, after all of the change orders (it seems like 75% of the homeowners that I've worked for want at least one change order), they would make a healthy income. It seems like you could persuade a homeowner that almost anything is an extra add-on.
 

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Hair Splitter
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Do you guys find that you're losing money on the initial estimate, but then making it back and then some on work orders?

I've worked for 2 guys in the past that said that they would get desperate after putting in numerous bids with no job, so they would lower the price too much and lose their income (but have barely enough to pay for material and help). But, after all of the change orders (it seems like 75% of the homeowners that I've worked for want at least one change order), they would make a healthy income. It seems like you could persuade a homeowner that almost anything is an extra add-on.
Charge what you want to make and stop targeting people who can't or won't pay that number.
 

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If they are desperate then their lead generation sucks. Their energy should be invested there not on some shady trickster douche nozzle move that misleads trusting customers.

I explain the existence of this shady concept in my sales presentations and call it change order con artists and explain that I do not do that.

The result is customers being suspicious of low bids and hire me instead to avoid it.

If your customer base is stupid and you have no integrity then go for it.
 

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Particulate Filter
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If you want to live in constant conflict go for it. Thats one of the things I love about my job. I dont have to lie or fight with people all the time to make a living. Its easily been six months since I laid my head on the pillow and I wasnt asleep in seven minutes.
 

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Remodel
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I don't condone it, but there are some that will quote a remodel KNOWING that there are conditions not covered under the original contract, then boost their profits as they come up.
 

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Love me some Concrete
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I agree with all the above. When I started this I swore I would never do that and I have not. It's cheesy, low and dirty in my book.

If you wanna be another one of those guys then go ahead, not saying I live on the high road but I just can't knowingly screw people over.
 

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Love me some Concrete
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I explain the existence of this shady concept in my sales presentations and call it change order con artists and explain that I do not do that.
Change order con artists, I had not heard it phrased like that before...I hope you don't mind if I borrow that from time to time. I really like that way of putting it!
 

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I've been eating the costs on change orders lately. I lose a little money but I make happy customers. Unless there is going to be considerable time or material involved I try to never raise prices after I quote the job. Referrals are the life blood of the business so if I have to eat some cost here and there to build my referral base that's a good trade.
 

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I try to never raise prices after I quote the job.
Getting paid for change orders is not raising prices after a quote is given if the work on the change order is not in the original scope of work. Suggesting so is an incorrect use of the term change order.

Eating cost of additional work sets a bad precedence with your customer and your referrals that you will eat the cost of additional work which incentivizes customers to ask for additional money losing extras because they don't have to pay for them.

The change order process ought to be explained in your presentation. I do that and no customer has ever disagreed or objected to paying for extra work outside the original scope of work.

Your call but I disagree that it's a good move. Most here get referrals without giving away work. Of course you get referrals for free work, why wouldn't you? But then why would you want to? That's the wrong reason to get referrals.
 

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I'm pretty specific in my bids on the scope of work. If I'm bidding against someone my contract is usually used against them. If it's not in my contract then it's an extra, period. 90% of my work involves extras, I don't make over and above on them but I don't do them for free.
 

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Discussion Starter · #13 ·
If they are desperate then their lead generation sucks. Their energy should be invested there not on some shady trickster douche nozzle move that misleads trusting customers.

I explain the existence of this shady concept in my sales presentations and call it change order con artists and explain that I do not do that.

The result is customers being suspicious of low bids and hire me instead to avoid it.

If your customer base is stupid and you have no integrity then go for it.
Wow. I can't believe no one has ever heard of unforseen circumstances. It's a legal definition under contract law. Sounds like we have a bunch of rookies here making $20,000 per year cause they're not charging anything for add-ons. I'll give you an example. I had to charge extra to put T1-11 today on a porch ceiling because I didn't know the half assed original builder used twisted studs that bowed the walls to hell. I didn't give them a discount for this, so I finally broke even on this job. This is one extra that I had on this job. The homeowners are so satisfied with the quality of the craftsmenship and customer service that we provided that I'm charging a full premium price on the 4 other projects that they want done.

You guys charge what you want, but I went into business to earn a living, not to do community service.
 

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Gen. Contractor
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QualityContract said:
Wow. I can't believe no one has ever heard of unforseen circumstances. It's a legal definition under contract law. Sounds like we have a bunch of rookies here making $20,000 per year cause they're not charging anything for add-ons. I'll give you an example. I had to charge extra to put T1-11 today on a porch ceiling because I didn't know the half assed original builder used twisted studs that bowed the walls to hell. I didn't give them a discount for this, so I finally broke even on this job. This is one extra that I had on this job. The homeowners are so satisfied with the quality of the craftsmenship and customer service that we provided that I'm charging a full premium price on the 4 other projects that they want done. You guys charge what you want, but I went into business to earn a living, not to do community service.
So your one of those guys that makes it hard for the rest of us to not get labeled "shady contractors".

I don't think that tuning up the framing before I put up soffit is an "unforeseen condition". Let alone something to be used to stick it to some schmuck HO that I low balled by selling him hopes and dreams.. If you walk into a job knowing there are going to be problems and you didn't include them in your scope there not "unforeseen conditions"- there bad shiz you saw/ didn't mention and plan on using to black mail the customer out of more $
 

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Wow. I can't believe no one has ever heard of unforseen circumstances. It's a legal definition under contract law. Sounds like we have a bunch of rookies here making $20,000 per year cause they're not charging anything for add-ons. I'll give you an example. I had to charge extra to put T1-11 today on a porch ceiling because I didn't know the half assed original builder used twisted studs that bowed the walls to hell. I didn't give them a discount for this, so I finally broke even on this job. This is one extra that I had on this job. The homeowners are so satisfied with the quality of the craftsmenship and customer service that we provided that I'm charging a full premium price on the 4 other projects that they want done.

You guys charge what you want, but I went into business to earn a living, not to do community service.
That's not exactly an unforeseen issue if the ceiling was bowed before. You had an extra but still didn't make any money? Now you're overcharging on other projects, what happens if you have unforeseen issues on those?

There's a difference between unforeseen issues and not knowing beforehand there will or may be issues.
 

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Talking Head
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I charge the same labor, overhead and profit on a change order as I do on the initial contract. That means I won't make more, or less, money on a change order as I would on any other day. I prefer NOT to have change orders so I can keep to my schedule and move on to the next job.

Most change orders I charge for, some are zero'd out but serve as a record of a change and some I actually credit the HO if they change will save me money. If I miss a fairly obvious thing, then I'll eat the cost if it's reasonable. For example, I should have seen that moving a breaker panel on my current job would make much more sense than working around it. I got paid to lay the basement out, so I ate the $600. I then gave the HO a change order for moving the panel with a cost of $0. They had a load bearing beam that was WAY under spec. I upgraded that and charged them the appropriate price.
 

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Love me some Concrete
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I always take care of the little things with out a change order, rotten wood around doors/windows and minor stuff. I have usually figured a bit of slop on the bid because I always seem to find problems. I can not in good concious half ass it, my OCD just will not allow it.

I have also just had the customer pay for the materials on a needed item because it needed to be done but did not charge labor. If I missed it on the bid, it's always on me, I take a bit longer with getting my bids done. Because if I missed it, I eat it. I really don't care that I might not have made enough because I had found something that needed fixed and it sometimes is just easier to fix it, explain what you fixed and tell them that is on the house.

I have not had anyone take advantage of me on it because I screen my clients. And most of the time it gets me a ton of referals...I have had a customer wait a year for me to do their large garage build because I had done work for them before and they only wanted me. It's a good feeling, darn near as good as the final payment upon job completed.:thumbsup:
 

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Bait and switch is a Tort(a civil offense for the as yet unindicted)in all fifty states, and criminal in most of them.....:eek:

While differing skill levels of Conmen do business with each other, I don't care as much as when an "innocent" party is defrauded, It is harder to cheat an honest person.
 

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I think you took the wrong approach here twice and seriously ought to rethink some things for the sake of your future and the things you ought to invest your energy into.

1. Your thread started inquiring about the appropriateness of dishonest business practices in a forum for professional contractors sick and tired of the unprofessional contractors giving the industry a bad name.

2. Invoking the excuse of "unforeseen circumstances" that should have been foreseen and then calling experienced professional peers offering you their opinion "rookies", is obnoxious when they would have foreseen that which you did not foresee. That clearly makes YOU not them look like the "rookie"

WOW Sounds like we have a bunch of rookies here
3. No, unfortunately what it sounds like is you are embarrassed and attempting to save face that you can't make a sale honestly nor generate appropriate leads for your company that make money unless you intentionally and dishonestly rip people off by tricking them with low ball offers and then ripping them off for change orders to make a profit pretending they are unforeseen circumstances.

I had to charge extra, so I finally broke even
4. You need an unforeseen circumstance to come up to BREAK EVEN? I thought change orders based on unforeseen circumstances = "make a lot"? Apparently not.

That is a VERY DANGEROUS way to conduct a profitable business. It is another of your thoughts that makes the rookie and the $20,000 income comment look foolish.

This is one extra that I had on this job.
5. And so far you have only broken even. WOW. I remind you of your use of the word WOW when you were transparently trying to act too cool for school above dissing professionals calling bull**** on dishonest business practices.

I'm charging a full premium price on the 4 other projects that they want done
6. And you HAVE to charge premium right because so far you have made ZERO money even with a change order based on so-called questionable "unforeseen" circumstances?

The "rookies" you speak of quote "full premium prices" on all work from the first phone call. They don't work for free HOPING they can fnd a place to phuck their customer over. They spare their customers all the bull**** and just run and honest business.

You guys charge what you want, but I went into business to earn a living, not to do community service.
Awesome! :thumbsup:
 
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