ECN Forum Forums General Topics of the Trade Business Related Discussion views on pricing

This thread reminds me why I don't do residential remodels and service work anymore. About 12 years ago I was called out to give an estimate for the wiring of a total kitchen remodel. They were taking the walls down to the studs and installing all new drywall, wiring, cabinets and counters and appliances. It was over a non finished basement and the panel was right below the kitchen. I priced it all out and they accepted my estimate. They signed a contract and the next week I wrecked out the old electric and roughed in the new. 2 weeks later it was all set to finish and everything went perfect and I was done in one day. The customer asked me to add an outside recept. It was just a matter of popping through the mud sill and putting a w/p box on the patio so I did it at N/C. Then comes the HO trying to beat me down when it was time to settle up. Mind you, the bill was not one penny more than the estimate. This HO worked in an automotive factory as a laborer(one of the big 3). Since my estimate was priced per opening he asked what my hourly rate was. At the time it was $35.00 per hour. He went nuts! Said there was no way I was worth $35.00 an hour. He said he was only making $21.50 an hour. I backed him up a bit when I asked him who paid his health insurance, contributed to his retirement, paid 1/2 of his SS, and paid his vacation time. I told him if he figured all of that in he was making closer to $40.00 an hour. I, on the other hand, pay all of those things out of my $35.00 an hour PLUS pay for my tools, licensing, liability insurance and traveling expenses. On top of that I haul my whole shop to his house. I asked him how he'd feel if someone from the company met him at the timeclock every Friday to haggle him down on his paycheck. He shut up and paid me. I raised my rates the next week and started being more selective of remodel customers. I rarely do remodel/service work anymore unless it is through a GC.

Unfortunately, this thread seems to be degenerating into (mild) incivility.
Flat rate pricing may work for some, but it is not the only way to run a profitable residential service business.
I'm from around Dnk's area, and the large service companies with the full page ads have a reputation for exorbitant pricing (real, or imagined).
If their overhead and profit targets dictate the need to charge $4,000.00 for a service upgrade that I can, profitably, do for $2,000.00 that is their business.
I do not charge for estimates. That is my business. I am not "dragging anybody down", I just don't have the overhead that they do, nor do I aspire to grow a company that can be sold someday.
Just because someone feels different about a business model, there is no need to get snide with them.
I have been a member of this boared for about 5 years, and this sort of bickering has rarely been seen.

In the words of Rodney King:

"Why can't we all just get along?"

I didn't mean to promote incivility. If someone wants to charge $4000.00 for an upgrade I could do for 1/2 that, power to them. A guy in my area advertised in the local paper "Complete service upgrades from $450.00!!" a year ago. He's working at Walmart as a stockperson now. Lowballers and highenders usually run their course in 2 years or less around here. I don't spend too much time worrying about them, the market determines their fate soon enough. I may be the odd bird. I just want to be able to pay my bills,get my kids an education and retire a few months before I die. Gave up on getting rich years ago. I think the Lord knows I wouldn't handle it well.

Fred,
My response wasn't directed at your post.

BTW,

I'm in your boat. Just want to work(not toooo hard), pay the bills and save something for retirement.
My prices reflect that.

I guess there is alot of us Contractor B's here...


But I'm the only one "dragging everyone down",
go figure....


Dnk...

I don't go around telling people that they should hang up on contractors that give free estimates or not to call a contractor that has a small ad or no ad in the yellow pages.
Dnk's post on the other forum basically stated to hang up on a contractor who charges a dispatch fee and has a full page ad as if he is some kind of crook. Red flag as he put it.

If a customer feels It's not worth paying my $29 dispatch fee for me to spend a few hours giving them an estimate I would prefer not to work for them.

I guess a legit contractor would never charge a dispatch fee.

I don't care if you want to give free estimates or don't want to advertise in the yellow pages but don't knock me because I do these things. How do you know I'm going to do the same job as contractor B?



[This message has been edited by A-Line (edited 04-16-2006).]

Dave,

How you run your business is no ones concern, If your satified with it, then that is good, please try to understand, that there are others that are contracting jobs, and are not price gouging, most are working very hard, to hold on, i hope some flat rate over the hill pricing, is not being confused with those of us that contract a set price, as you know i am in jersey and here any job over $200 has to have a contract, it's the law, we estimate a job based on our fixed expenses, labor costs, and a small profit.

Nice. http://forum.doityourself.com/showpost.php?p=968157&postcount=6


[This message has been edited by A-Line (edited 04-16-2006).]

I simply claim to be an engineer. That covers a lot of ground - including electrical engineering.

I never said that it is easy to wire a house in a code compliant manner. I never said it was safe.

I simply said that having an electrictian do the wiring is not cost effective to the homeowner.

I am sure that $100/hr is a fair rate for an electrictian. That is cost effective for a business, but not a homeowner.

Would you pay a painter $100/hr to paint your house? Or pay a plumber $100/hr to replace a fixture?

I don't think so. You don't view it as cost effective.

I am just an engineer. I don't do work for homeowners. Because of my billing structure, it is not cost effective for the homeowner.

A lot of work is not cost effective for one side or the other.

Just out of curiousity, what benefits do you offer your employee's Dnkldork ? Medical or dental ?

My guess is you don't offer any and pass that savings on to the customer 'cause your a decent guy without the full page add


What is your view on the new terrorism tax that is charged with workman's comp now ? or do you even have that ?

Your a business man right ? Let's hear about your business model, school me if you will there "SuperDave"

P.S. Where can I get a copy of that Shazam style red lightning bolt you have on trucks ?



[This message has been edited by Rich R (edited 04-17-2006).]