We give our customers a fair estimate. If they don't like our price, we welcome them to get other estimates. If they find a lower price for the same work and want to use them instead, good for them, but we aren't going down (well maybe 1% or 2%). We usually present the estimate in a way that makes them feel like they're getting a really good deal, so no need to bargain. Our technique is to estimate each item individually, then offer a discount if we do all or most of the work at the same time. The discount is built in, if they do all the work, they get a package deal, if not, we make a little more on the individual items.
Never had a problem.I would never do it.Gives the customer the impression your picking numbers out or the air.Negotiating?A price for a job?No Way. Give the customer an honest price and if he doesn't like it have him call someone else.Unless of course you negotiate your mortgage and truck payment every month.10% at the end of job?I would've took him to court.IMO
It was only a $750 job, so I only lost $75, but at the time that may have been three hours work. I was upset because I felt like I listened to his BS for three minutes & paid him $75 for three minutes of BS. Not exactly worth a trip to the courthouse.
It worked out in the end. He called asking for a favor a few months later and I was SO sorry I couldn't help him.
Now I give discounts to people, or even better do additional work without an additional charge. The customers feel good, refer other work to me and I save thousands in advertising cost.
I get $75/hour at a 2 hour minimum service rate. If someone has a bit of work or if they are just more comfortable with it, I give them a lump sum price. That price is always higher than if it was T & M (because I have to cover my arse).
I just got this Kennel job for a little less than $8,000.00 I wasn't the lowest price. But they liked my thoroughness in my proposal, the extras I added (like Surge Protection) and the fact that I went back a second time to MAKE SURE I wasn't missing anything. Oh, and also that the BBB had nothing on me.
I can probably do this job in about 50 man hours and parts/permit costing >$1,000.00... That's a good profit isin't it? That's $140.00 per hour if it takes 50 hours. I bet I could do it alone in 40 if I really get on it!
Any negotiation always works out in my favor. They sign a contract with me and everything is then legal.
The people I have problems with are GC's (What a surprise)! I've been fortunate to have a steady one who is just cool as anything (because he can charge extra if I do) and I do custom homes usually as a PRIME not a sub. I can charge more per sq. ft. because there is no builder marking my costs up.
The "bread & butter" jobs are the RAC's and the houses, but I'll tell ya, man, the service calls are runnin' neck & neck with the bread and butter stuff! The Kennel is considered a service call in my mind (though it really isin't) because it is above and beyond our regular work.
I average about 70 calls a month from a particular yellow pages market and it costs me $245.00/month. It is a good position to be in. I can afford to pick and choose because I currently am not maned-up enough to do them all and I really don't care at this point. You wouldn't get them all anyway... but, what I mean is that I can just about quote whatever price I want not really caring if I get it or not because we are already busy enough.
I charge $75/hr. and that's that. That is the minimum. Quoted jobs I get more.
I can't afford to give away anything. Between taxes, insurance(s), gas, and other overhead, I can't afford to give away anything I'm already counting on.
This is a great trade to be self employed in. But you got to find your niche. And you've GOT TO deliver quality and on time. If you do, people are willing to pay for it. I've been doing this stuff since '81...I hope I've got my act together by now!
But, ya know, you hit some people harder than others and some people you do it at cost. What comes around really does go around.
I have a wife and 4 kids. 2 will soon be college bound. Wifey stays at home. That's all the motivation I need right there. To give anything away is to take it from my family. Ya know what I mean?
My vehicles (4) are all paid for and things are going alright. The only negotiating I do is how much they'll give me up front and when they want it done by and that they KNOW and have signed that I get the remainder due UPON COMPLETION. I wouldn't think twice about taking someone to court if I had to. And I have had to and they always lose because I have what I need in writing --- ALWAYS. It usually doesn't get to court because those who play games learn quickly that I'm not playing. And, to be honest, usually there are no problems like that. Probably because I dot every "i" and cross every "t".
When a customer tries to negotiate a price, you learn a bit about him - he doesn't know what price is fair, and he has a percentage that he is looking for. If he beats you once and calls you to do more work, he is also a fool. Increase your price to cover your first loss, the second negotiation, and give yourself a big bonus for landing on 'Go'.
This is a great topic. It just makes it all that easier to keep my head up and firm on my price. I've only been negotiated out of money one time, and it was the stupidest thing I ever did. He needed the job done now, and I was the only one at his house willing to do the job now. That was just after I got my license, so it was my first contract job. I ended up taking WAY longer than what I thought I could do it in, so the burn was worse at the end of the night. Never again.