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Question.. We're losing some work to lower bids and are wondering if we're using outdated $ figures (labor). Is the market that desperate, or are we worrying too much? It seems that what was considered a fair price is going down. I understand free market competition, and welcome it, but it's getting a bit discouraging. Just trying to make a reasonable living. Location N.Illinois. Thoughts? Suggestions?
 

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The company i work for just got outbid 90k ($5.00/SQ FT is what we bid) on a job, after we built the first two buildings.. either the GC scabbed out or these guys are working for bread and water.
 

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My father was in business for over 50 years. He always reminded me that I could stay home and not loose money. Might not make any, but you don’t loose. Never take a job without profit. It’s like Russian roulette.
 

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Question.. We're losing some work to lower bids and are wondering if we're using outdated $ figures (labor). Is the market that desperate, or are we worrying too much? It seems that what was considered a fair price is going down. I understand free market competition, and welcome it, but it's getting a bit discouraging. Just trying to make a reasonable living. Location N.Illinois. Thoughts? Suggestions?
Is the date on this post wrong? Is that supposed to be 2008 and not 2009? :blink:

Neil where have you been for the last year?
 

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I've spent the last few years in the retail mall maintenance and remodeling trades, but the majority of my work over the years has been residential remodeling. Regardless of the specific customer group your working for, everybody wants it for less. What they don't realize is that my bond, license, insurance, work comp, payroll, materials, gas, even personal bills, bla -bla -bla remains the same at best. Before this general direction of thought became mainstream, I was reasonable and made an honest living, but now it's nearly impossible to sell a bid that is designed to actually make a profit. I live in a nice little neighborhood but there are a couple of 50 yr. old loosers around here who ride a bike and don't work other than the occasional yard sale, yet they somehow get by. I work my ass off, come home and write a bid or some other matter of work and get by like the guy on the bike without a job. Granted, I hold higher standards and live better than that guy but you know where I'm coming from. All of us who have spent a lifetime providing quality should not drop our prices one cent! I think there will come a day when all the people who got screwed going with the lowest bid will hunt us down to do the job right the second time. Ironically, they could have just done it right the first time and saved money. It's hard to convince people of this, but it's true and I've been around long enough to see the results of shotty cut-rate work done by others.

Here's a example of one idea I include in the deal when selling a bid;

In Cali. the law says a contractor is liable for labor and all materials for ten years, so I offer them a ten year guarantee (most people don't know that you get that already).

Bottom line is - we still have to pay the bills, so I am constantly thinking about ways to get the bid.

My general opinion is to sell people on quality (if that's the kind of service you provide) and keep the price in the ball park.
 

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KemoSabe
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What am I missing-just curious. The OP shows "today"
I think it's curious that the OP is just realizing the competative market, while most have been getting the workover for at least a year.:thumbsup:
 

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Full Service Renovations
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Not to sure about the pricing south of the border, but up here I have actually raised my prices this year. For the most part all of my materials costs are higher, insurance rates have risen, etc. etc. I have only ran into one bid this year where I was unsure of the outcome. The builder that built the house was bidding the basement dev. and came in a few thousand lower than I did but we ended up getting the job anyway. I have found this year alot of the fly by night contractors have flown away because the govnt. is giving HO's tax credits for home improvments and the guys who were working under the table for jobs are now being forced to claim all of thier work.

To be honest I have not found this year any harder or easier than any other to get work. Sell the job, provide a quality product for a fair price, do what you say your going to do, and everything else takes care of itself. :thumbsup:

Cheers
 

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I say yes.

When bidding jobs, I have kept my prices the same, but I cut back on "padding" things to cover my tail.
 

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Capra Aegagrus
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My father was in business for over 50 years. He always reminded me that I could stay home and not loose money. Might not make any, but you don’t loose.
God bless him for hanging in there all that time.

But there's a big difference between staying home because you might lose money, and staying home because you won't make money.

There's nothing at all wrong with breaking even, if that's the best you can do short-term. Sit at home, and people forget you exist. Get out and work, and you have a much better chance of being noticed and getting those profitable jobs.
 

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KemoSabe
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God bless him for hanging in there all that time.

But there's a big difference between staying home because you might lose money, and staying home because you won't make money.

There's nothing at all wrong with breaking even, if that's the best you can do short-term. Sit at home, and people forget you exist. Get out and work, and you have a much better chance of being noticed and getting those profitable jobs.
I heard it like this..."If you aren't making money, you're losing money."
A friend told me this once also, in reference to those jobs that almost put you under. "If you're not making your wage, put more hours in, they'll be worth something.":thumbsup:
 

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I think what people dont realize is we still have the same costs, if not higher.

And I tend to remind them that even though the economy is bad, they're still working and still make the same money.

I'm still working and still have to make the same money, if not more.

This usually either pisses them off, or they understand where I'm coming from.
 

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Mike Finley -

Good to see you are looking to the future when you raised your labor rates 80% for 2011, which is almost 2 years in advance. I assume MST time is still in the same year as everyone else.

As a material supplier, we always quoted an escalation rate for long term jobs. It was a guaranteed maximum. The contractors appreciated it for bidding purposes and things always got sorted out when the job schedule got firmed up. We never sold on price, so it was just a service to our customers.
 
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