With permission from one of our customers I am going to share a story with you. As I was directly involved I will tell the story from my point of view based only on what I know for sure. For practical purposes I will call this customer John.
About two weeks ago I got a call from John. John was calling to "get my advise" on a job that he was getting ready to bid. The very first words out of John's mouth were "I probably shouldn't take this job" then he went on to explain what he was being asked to bid.
The job was a deck that wraps around a swimming pool. The deck was PAINTED brown by the seller. The new buyer wanted it "fixed." The pool is in use currently but they want the deck done ASAP. They also managed to convey to John they were "on a budget."
I told john that I agreed that he should not take the job having 1 never worked around a pool and 2 never tried to remove brown paint from a deck. John said he was glad he called me and that he wouldn't take the job.
He then said "just for kicks" how much would I charge for that type of work. My eyebrow raised a bit but I didn't pay attention. I went on to tell him that with this and that and all considered I would charge between $3.50 and $4.00 per square foot if I was ever foolish enough to bid on that type of work. He argued that that was too high and no one would ever pay that much. I explained that that is why I consider it foolish to bid that type of job but that is what I would have to charge to make a profit.
Next john asked if I had ever had to remove brown paint from a deck. This time my ego took over and I certainly didn't notice if my eyebrow went up. I said that there were a few times that I took on that type of job. I told him step by step how we did it and how beautiful they turned out and oh how wonderful and talented I am and on and on.
After that we agreed again that it was a lot of work and you would have to charge WAY more than double the normal rate to make a profit. He said again how glad he was that he called and said he would not be taking that job.
Today my phone rings and it is John. He took the job. The homeowner told him that another company said it was going to be real easy and they would do the job for an amount that worked out to about $1.10 per square foot which is less than the going rate for a standard wash and seal. John under bid them and got the job.
It was supposed to be finished in time for the holiday weekend. Currently (and I can only assume he is doing the right thing) the pool is being drained so that it can be cleaned. He is going to have to replace the pools filter membrane to keep his customer happy. The customer was so upset that he was not done on time John panicked and bought a BUNCH of brush on liquid paint stripper at $18.00 per gallon.
At best John is going to finish this job at a financial loss. He will have spent more on materials, having the pool drained cleaned and refilled and replacing the filter membrane then he will collect on his contract. If this were the worst part you could call it tuition to the school of hard knocks.
The reality is John is 5 days into a two day job and is not even half way finished because he tried to take short cuts because he under bid and wanted to "save money." The customer knows that "some sort of mistake" was made and they have him over a barrel. They are making treats and using their leverage to keep John off balance. All the while he is stuck under their thumb trying to avoid being reported to the BBB or "sued." You can bet it is going to be very difficult for him to collect on this job.
Now I could go on and on about all of the mistakes that were made but it boils down to three crucial things. These are the three deadly sins of the service industry.
1. Simple. . .If your gut tells you not to do it. . .DON'T DO IT!
2. If you are going to do work you've never done before you have to charge more than the going rate to make the average pay.
You will always be slower your first time and the chances you will have to re do at least part of the work is much higher.
3. Discounting your price or taking work you wouldn't normally do because you are hungry will cause you to starve every time!
Now while I am at it I am going to add two more
4. Discounting work for friends or relatives (at a discount) just to impress them will never work, they will just think you overcharge everyone else and probably will not appreciate you the way your ego needs.
5. Offering a property manager a discount on "this job" so you will have a better chance at the "next project" is insane! Bid the work you have in front of you based on YOUR BUSINESS MODEL. If the property manager likes your service they will hire you again.
I do hope that whoever reads this knows I am not telling you this because I figured it out. I made each of these mistakes. I've also talked with many many other contractors who have made the same mistakes. The most valuable asset this Forum can offer is the opportunity to learn from the mistakes of others.
With permission from one of our customers I am going to share a story with you. As I was directly involved I will tell the story from my point of view based only on what I know for sure. For practical purposes I will call this customer John.
About two weeks ago I got a call from John. John was calling to "get my advise" on a job that he was getting ready to bid. The very first words out of John's mouth were "I probably shouldn't take this job" then he went on to explain what he was being asked to bid.
The job was a deck that wraps around a swimming pool. The deck was PAINTED brown by the seller. The new buyer wanted it "fixed." The pool is in use currently but they want the deck done ASAP. They also managed to convey to John they were "on a budget."
I told john that I agreed that he should not take the job having 1 never worked around a pool and 2 never tried to remove brown paint from a deck. John said he was glad he called me and that he wouldn't take the job.
He then said "just for kicks" how much would I charge for that type of work. My eyebrow raised a bit but I didn't pay attention. I went on to tell him that with this and that and all considered I would charge between $3.50 and $4.00 per square foot if I was ever foolish enough to bid on that type of work. He argued that that was too high and no one would ever pay that much. I explained that that is why I consider it foolish to bid that type of job but that is what I would have to charge to make a profit.
Next john asked if I had ever had to remove brown paint from a deck. This time my ego took over and I certainly didn't notice if my eyebrow went up. I said that there were a few times that I took on that type of job. I told him step by step how we did it and how beautiful they turned out and oh how wonderful and talented I am and on and on.
After that we agreed again that it was a lot of work and you would have to charge WAY more than double the normal rate to make a profit. He said again how glad he was that he called and said he would not be taking that job.
Today my phone rings and it is John. He took the job. The homeowner told him that another company said it was going to be real easy and they would do the job for an amount that worked out to about $1.10 per square foot which is less than the going rate for a standard wash and seal. John under bid them and got the job.
It was supposed to be finished in time for the holiday weekend. Currently (and I can only assume he is doing the right thing) the pool is being drained so that it can be cleaned. He is going to have to replace the pools filter membrane to keep his customer happy. The customer was so upset that he was not done on time John panicked and bought a BUNCH of brush on liquid paint stripper at $18.00 per gallon.
At best John is going to finish this job at a financial loss. He will have spent more on materials, having the pool drained cleaned and refilled and replacing the filter membrane then he will collect on his contract. If this were the worst part you could call it tuition to the school of hard knocks.
The reality is John is 5 days into a two day job and is not even half way finished because he tried to take short cuts because he under bid and wanted to "save money." The customer knows that "some sort of mistake" was made and they have him over a barrel. They are making treats and using their leverage to keep John off balance. All the while he is stuck under their thumb trying to avoid being reported to the BBB or "sued." You can bet it is going to be very difficult for him to collect on this job.
Now I could go on and on about all of the mistakes that were made but it boils down to three crucial things. These are the three deadly sins of the service industry.
1. Simple. . .If your gut tells you not to do it. . .DON'T DO IT!
2. If you are going to do work you've never done before you have to charge more than the going rate to make the average pay.
You will always be slower your first time and the chances you will have to re do at least part of the work is much higher.
3. Discounting your price or taking work you wouldn't normally do because you are hungry will cause you to starve every time!
Now while I am at it I am going to add two more
4. Discounting work for friends or relatives (at a discount) just to impress them will never work, they will just think you overcharge everyone else and probably will not appreciate you the way your ego needs.
5. Offering a property manager a discount on "this job" so you will have a better chance at the "next project" is insane! Bid the work you have in front of you based on YOUR BUSINESS MODEL. If the property manager likes your service they will hire you again.
I do hope that whoever reads this knows I am not telling you this because I figured it out. I made each of these mistakes. I've also talked with many many other contractors who have made the same mistakes. The most valuable asset this Forum can offer is the opportunity to learn from the mistakes of others.
Don't just learn, remember and apply!
Best of Luck!
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