Does anyone have an open book policy with customers? By that I mean show the customer the entire estimate including the details of markup's and labor. Also a page showing the details of why it costs so much per hour to operate.
I plan to show them my full profit margin and not budge. I'm not doing this as a bargaining chip. I plan to show a handsome profit right on the page and not back down. I want customers that will look at this and see that I'm paying my help and me enough to send our kids to college and still hire us above another contractor.People that ask those kinds of questions and want things spelled out like that, are the one's you want to, run, Forrest run, away from.
I have had some customers balk at the price. I would like to lay it out in front of them and say here's why we charge what we charge.If someone balks at the price, I tell them we could install junk materials and not provide a warranty but, I would have to sub that out then.
Dont dirty up my good name.
I don't really care about their bank account as long as they pay what I ask. I just want them to see why it costs so much to operate a business. I don't think most of them know what it takes.They won't show me their tax info or bank account info so why would you ever show operating costs, markups etc.. only thing they see is one price with breakout sheet for materials everything else is company info and unless they work for me or aremy accountant no one ever will see that info.
I'll admit I'm not that good at sales and I'm never the lowest. I would rather a customer not get three other estimates. I'm thinking that they may get a good look at mine and realize I'm being honest and flat out telling them I will make a profit. If they don't agree with my honesty and go with a lower price that's fine by me. If they take mine then I know I have a good customer.I'm sure it comes down to being good at sales...
I don't think you gain much with an open book policy. If you are trying to earn their trust, I think you are better off earning it by showing a nice presentation of past projects with good references to back them up. And if you know you are bidding a job where you know you will be higher than your competitor, show your customers why you are worth the difference in price (sell your value).I don't really care about their bank account as long as they pay what I ask. I just want them to see why it costs so much to operate a business. I don't think most of them know what it takes.
If I go to a customer and take the unknown out of a proposal I think we will be on better terms from the start. Like I said I'm not doing this as a bargaining chip. They may look at it and say "you must be crazy charging that much profit". If that's the case I don't want them as a customer. I have found I can't (or more correctly will not) compete with the less expensive contractors.
I can see if you are cost plus that will work. What happens when you bid one aspect of the project too low or a problem comes up? Do you just explain to the customer that you made a mistake in the estimate?
Yes, that is what happenes on a cost plus, they take the good with the bad, as long as the contractor is honest and can back up why he chose one sub over another one, even when he was more expensive.I can see if you are cost plus that will work. What happens when you bid one aspect of the project too low or a problem comes up? Do you just explain to the customer that you made a mistake in the estimate?