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Discussion Starter · #1 · (Edited)
Hello there,

Without going into too many specifics, I recently completed a job for a homeowner which involved a complete bathroom redo (new tub, surround, floor, toilet, vanity, etc).

During the work, the homeowner always informed me that they were extremely pleased with the quality of work which I was doing.

I quoted this job as labor only, with the customer supplying all materials (as per their original request).

There were many substantial changes made to the scope of the work as the project unfolded. The cost, of course, rose accordingly.

Upon completion of the work and presentation of the final invoice, said customer has performed a complete 180 and is resorting to nit-picking and their attitude is noticeably sour. The customer was aware of the increased cost due to the substantial changes requested.

Due to the way the contract was structured, I provided proof of purchase for all materials to be reimbursed (for items purchased which I required along the way.)

Things cost money, and without going into too much detail, I really got the impression that the client was resentful of the increased cost, almost like they wanted the work, but didn't want to pay.

I want to make sure the client is completely satisfied, but the complete change in their attitude on the day the invoice was presented struck me as very odd. I have bent over backwards throughout the process to ensure that my customer gets what they want, but as I said before they seem completely shocked at the final price, even though this was clearly presented in written form before the work began.

In other words, it was all smiles on their end as the work was being done and the project took shape, but a complete reversal upon final invoicing. I was a little bothered by this, especially given the fact that I do not mark up materials and priced the project very reasonably in comparison to my knowledge of the pricing of comparable renovations in my area.

Has anybody else had this experience here?
 

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That is the peril of time and materials jobs---

The only way to avoid the 'sticker shock' is to keep up on the paper work---
Bill the materials every few days---never go more than a week for labor payouts---

Generally,T&M sucks---learn to bid a job and design one---I do have a few T&M customers--but they have deep pockets--like to make changes as the work progresses--so bidding for them is useless---but I collect my payments promptly--
Major purchases are paid for by the customer---

Good luck---
 

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This space for lease
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If you are honest about the hours and your hourly rate and material costs then the problem is on their end. It's up to them to put on their big person undies and deal with it. I've had a few act like they expected a gift but I explained that I have to charge for my time.
 

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id never do T&M on any project over $1,000

it works great for a small $300 job thats too small for an extra trip to bid....

i assume your talking about a $10,000-$20,000 job.....you may be the only person who would do such a job at T&M......i doubt you find anyone here who would

change your methods=make more profit

the advantage for the customer w/ a bid job is he knows the price and agrees to it ahead of time...no surprises
the advantage for YOU with a bid job = you get it done early you get hundreds in your pocket...+ the customer never knows how much profit your making, so you can hide the fact your actually making decent profit..
 

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As the job progressed, did you keep your client up to date on your time and cost of materials? I often take T&M jobs on complicated structural repairs, but I make regular progress reports, sometime daily. Photos with captions and time sheet attached is very effective. Did you bill regularly? I bill every Friday, through Friday so I am caught up completely once each week. Don't be afraid to ask your client if he approves continuing on to the next phase. Communicate and follow up. Finally, did you have a written contract? They do come in handy.
 

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Kowboy
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id never do T&M on any project over $1,000

it works great for a small $300 job thats too small for an extra trip to bid....
I agree. Most of my restoration/repair work fits this criteria and I charge for drive and administrative time. Some people seem incensed that I won't drive an hour each way to bid a $300.00 job.
 

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i assume your talking about a $10,000-$20,000 job.....you may be the only person who would do such a job at T&M......i doubt you find anyone here who would
you'd be wrong. Davinci remodel is a very successful custom builder that only works T&M. He can argue with you if you want but it works for him and it works for me for certain jobs and customers.

If you are the type who feels the need to hide your profit from your customers then T&M definitely will NOT work for you
 

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hack of all trades
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Sounded to me like the OP quoted a single price for labor, but added on to the labor quote as changes were made. Unless the change order markups ended up a huge percentage of the job, and the client was not kept in the loop, the client is just being a PITA now that they have to hand over the actual payment.
 

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Discussion Starter · #13 · (Edited)
Thank you all for the feedback. I do agree that communication is key; when I originally scoped out the work no red flags were raised as to my expectations about the ability of the client to pay.

I did quote a single price for the labor, in two portions, call it Option A and Option B. Since the client midway through the project decided to pursue Option B, I informed them that I would be billing for Option B as outlined in my quote. Unfortunately, at this point, it seems as though the client did not digest the price for "Option B" and assumed that I would only be billing a little bit extra on top of Option A. Materials receipts were always copied and given to the client with the invoices (no markup on materials).

These were both detailed write ups for labor cost as well as an estimate of what materials would cost that were provided from the outset before work began, in writing. Now that I look at it, my labor cost should not have been a surprise, considering that they had it in writing from the outset. The materials cost that I compiled for the client at the outset was also very accurate in terms of every little thing that I thought would be needed was listed, along with a line by line price and total materials cost.

From what I gather, the way to go next time is to quote based on one price, and not just my labor. Lesson learned. Also, from what I gather, it is REALLY not good to do a job for somebody unless they KNOW what they want and expect from their contractor.
 

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I do a lot of T&M jobs. Probably 50% of my work right now. Communication and documentation are KEY to not having a pissed-off HO. It never fails when I'm in the middle of something and the HO asks "We want this, too. Would you mind running out to get it?". Sure, no problem. But you DO realize that it takes TIME to "Run out and get it real quick", right? Time=Money and I ain't no charity. I tell them up front that my hourly rate applies to anything and everything I do for them. That includes travel time going to and from HD to grab that light fixture they saw online and now want installed. I make a manila folder for every job where I keep copy's of the bid/contract, change orders, receipts, job notes, etc. They're great because I have everything documented, so if they squeak about anything I'm well prepared to dispute/resolve the issue on the spot. I don't let issues fester, I want them resolved quickly. Plus, when a repeat client calls I can just flip through their last job folder and can tell them I remember every single little detail from that job.
 

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signed change orders with cost, keep the ho up to date as to the money's, what you have here is a customer at the end of the caffetteria line, carrots yes, mac and cheese yes, side salad yes, roll and butter yes, pudding yes, $12 for lunch?. Things add up pretty quick, and your ho did not keep up.
 

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Discussion Starter · #16 · (Edited)
I couldn't help but feel as though I was being shaken down by the home owner not long after presenting the invoice, as I was removing my tools and any remaining garbage and product packaging from the room.

The client was displeased with the location of the toilet supply line coming out of the floor. I was told in a somewhat confrontational way "Can't you move it by lifting out a couple of tiles?" ... My head almost exploded after hearing that.

That is precisely what I mean by knit-picking...movement of any plumbing was not at all included in the scope of the work to be completed, nor was it requested by the homeowner as part of the quote. If it was, cost would obviously be higher and the work to re-route the copper would have had to have been completed right after demo stage, not after completion stage.

Definitely adding this as an experience to be remembered in a positive way so that future jobs don't end up like this...
 

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Things cost money, and without going into too much detail, I really got the impression that the client was resentful of the increased cost, almost like they wanted the work, but didn't want to pay.
That is the attitude of many homeowners - and to be fair is my attitude when it comes time to buy myself things as well -everybody wants more and to pay less whether it is buying a vehicle or doing work on their home. Keeping the proper attitude about it is key- I work hard for my money, so does my crew- but remember so does the customer.

If you are doing a really good job, you make things look easy. The customer disappears for a day comes back and sees all this nice work done and it seems easy like"moving a couple tiles" to redo plumbing is a perfect example. All the customer can "see is the two tiles moved. Often times -when the homeowner is working during the day they come by late evening and there will be myself and one other guy looking over the job site to check on progress- that is what the customer sees- not the 7 guys that were there for 9 hours while they were gone. If you keep the right perspective it is easy to see why it looks "easy" to them and every time the customer says something like that I take it as a compliment that we are doing a good job.

I work a lot of Time and Material jobs. I actually push those as it eliminates a lot of competition if i really want to get work because if they have 2 or 3 bids instead of competing against bids i give an estimate for what it would cost but tell them if they want to work on T&M then they will be able to make changes as they go to that might save money or cost more but it will be up to them. I also actually run a real estate company that buys and flips homes - my construction company (has to be two companies on paper for a lot of reasons) always works as T&M for them of course so I am very used to that format and since I want both companies to show a profit I am both the customer and the contractor- the Manager of the real estate company and the Foreman of the construction company often are going off on each other about how they are being ripped off by the other - and at the end of the day they all still go to the same company picnics and are friends.

The key - as mentioned above many times- on T&M jobs is to keep very regular updates- and to me weekly is not near enough- and I want the work paid for every week as I go - since i take a deposit up front - each week is actually using the last weeks work as deposit on the next week. In this way when the job is "done" there is either no check or a very small check- and on occasion I am writing them a small refund check with the final invoice. I do try very hard to keep that last week of work in line with what is left so it if it is a very small amount I will write out on the invoice the cost and show a discount of $253 or whatever so that when i hand the final invoice and keys I am not collecting a check. Writing the Home owner a check for $310 when I give the final invoice and hand back keys after the inspection is even better. This is actually easy to do if you always get upfront money and bill by the week as you go and always results in that final day having a very happy homeowner without buyers remorse and no issues with nitpicking at the end as it is just adjusting that final number. It also means never getting stuck on collecting.

There are a lot of good business models that work and the bid job method is simply the most common, and as was mentioned, the easiest to have a chance at a "big payday" if things work out. Also is the easiest to get stuck on a losing job that you wish you had never bid on to begin with. The only thing you did wrong I think by the sounds was not keep the homeowner up to date on cost and payments and ended up collecting a huge check at the end- and that could well have left you screwed if the customer just said "no" at the end so if it was just some dirty looks call that a win.
 

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If you are the type who feels the need to hide your profit from your customers then T&M definitely will NOT work for you
the more info you give the customer on pricing the more they have to argue back with you about...by giving them 1 set price its either a take it or leave it situation.....by doing a large project on T&M they never know how much they will be paying........its going to lead to issues

when you buy something at Walmart do they list how they came up with their prices?.....manufacturing $1, packaging $1, stocking $.25, shipping $2.........the only place in the world you find T&M is in the trades

by doing t&m there's no advantage to getting the job done quickly...i have had a few customers angry with me over T&M jobs over the years....a much higher % than set price bids.......i cant see anyone building most of their business using this method...everything is against you with this method...i cant see ANY advantages....
 

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the more info you give the customer on pricing the more they have to argue back with you about...by giving them 1 set price its either a take it or leave it situation.....by doing a large project on T&M they never know how much they will be paying........its going to lead to issues

when you buy something at Walmart do they list how they came up with their prices?.....manufacturing $1, packaging $1, stocking $.25, shipping $2.........the only place in the world you find T&M is in the trades

by doing t&m there's no advantage to getting the job done quickly...i have had a few customers angry with me over T&M jobs over the years....a much higher % than set price bids.......i cant see anyone building most of their business using this method...everything is against you with this method...i cant see ANY advantages....
I understand exactly what you are saying...none of it is new, same argument again and again. With T&M if you can work twice as fast as someone you should charge twice what they do per hour. Like I say, talk to the Davinci that has a the Vitruvian man as his avatar and you and he can argue about it. He's very successful and has a long line up of happy customers who want to throw money at him. He switched to T&M a few years ago and is very glad he did

If you don't have a trusting relationship with your customers you shouldn't work T&M. If you have a good relationship with them they aren't arguing with you about your costs
 
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