1 day job turning into a 2 day job - question about adjusting the original price

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Shak180

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So long story short I've been working for myself for the past 5 months. My estimates are based on how many hours I figure a job will take to do, material costs + a 20% mark up, and fuel costs.

I got a message on Yelp for a Enel X Juicebox EV charger install. I went out to take a look at the job, I measured the perimeter of the house to get an idea of how much wire I would need and my measurements came out to 110ft to get into the subpanel from the EV charger location. The plan was to run the circuit in the crawl space. The customer asked for a ballpark estimate that he wouldn't hold me to and I should have followed the advice I was given to not give ballpark estimates but I foolishly did and said probably around $1,000. I told him I would send him a formal estimate the following day.

After adding all the material costs my estimate was $1,500. The customer emailed me saying he thought it would be closer to $1,000 and I responded that the prices of materials had increased since the last time I purchased these materials and I hadn't taken into consideration all the parts and pieces that were necessary for the install until I had more time to think about the install. He agreed to the $1,500 and we scheduled the work.

I go down into the crawl space and after crawling through the labyrinth I find out that I can't crawl to the area where the electrical panel is located because cast iron pipes and ducting are blocking the access hole to get to that section of the crawl space.

I tried sending in 25ft of fish sticks with string loops on the end to try and hook the sticks from the obstructed area but I couldn't get it even with the homeowner helping move the fish stick around. I told the homeowner I'd have to come back with a helper tomorrow and some different tools to finish this job. I went and bought a Greenlee FP18 which is a 18ft telescoping fish pole in hopes of being able to hook the fish sticks tomorrow.

I told the customer it would be an addition $500 to $600 to finish the job and he said let's call it $2,000 to which I agreed.

What should I have done differently in this situation?

I've never worked in such a congested crawl space before and never expected the only access hole to a large portion of the crawl space to be blocked off. This was a learning experience about worst case scenarios for me. I was also foolish to think I could pull the wire by myself so this was another lesson learned to have a helper for these types of wire pulls.

This job is in San Mateo California
 
That is the risk of estimating for rehab or addons with closed walls, the unknown, the only way to compensate fully is to quote as a T&M where significant variables may be present. Or you need to do a very detailed scope of work with a stated caveat for the unknown obstacles that severely effect the timeline or material costs. Or charge high with "If it takes less". Or give ranges, as you get more experience and seeing more "I didn't see that potential problem" you get better at ranging.
I almost never give "firm" behind closed wall estimates. Too many variables. And customer gets mad with "that didn't take long" and you ask for the agreed price, but will "but you said $X" when it took you twice as long as you estimate and try to get the upcharge, so you eat the T&M extras. The risks of being in business.
 
Do you regret not taking a closer look into the crawlspace before committing to a price? I’ll admit I’ve been in similar circumstances and wish I would’ve put a little more time into checking things out ( like a crawlspace).

I’ve decided to spend more time researching my circuit routing options before giving a bid price. I add that time spent (1-2 hours) to the price of the bid when compiling the price. I figure it’s time that has to be spent regardless if I end up doing the job.

If I still end up with some possible unknown challenges (like getting a wire from the basement into the attic) I’ll try to qualify the job as a T&M job.

The more unknowns there are the more risks there is in giving an accurate price. I’m trying to get better at eliminating as many unknowns as possible before giving a price.
 
If I'm not sure of the circumstances, I NEVER give a firm quote. I give them a range or minimum and explain there might be unknown obstacles. Sometimes I just have to tell them T&M.
 
Our contracts have an exclusion for "unforeseen site conditions". It may be debatable as to whether this was a concealed condition or you should have full scoped the intended path in your walkabout. I agree you're lucky the customer we so agreeable; must be a contractor himself. I think you've already learned how to address this sort of situation in the future. The key is selling the customer on the methodology, whether it's T&M or price-not-to-exceed, or some other arrangement that keeps you from taking it in the shorts.
 
gadfly56 said:
whether it's T&M or price-not-to-exceed,
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That is one thing that I would never agree to. For me, it was a set price or it's T&M.

I also agree that a "budget" number is something to avoid if possible. I would make every effort to avoid doing this to the point that the dock builder that sold a lot of my jobs would get extremely frustrated with me.
 
Fred B said:
That is the risk of estimating for rehab or addons with closed walls, the unknown, the only way to compensate fully is to quote as a T&M where significant variables may be present. Or you need to do a very detailed scope of work with a stated caveat for the unknown obstacles that severely effect the timeline or material costs. Or charge high with "If it takes less". Or give ranges, as you get more experience and seeing more "I didn't see that potential problem" you get better at ranging.
I almost never give "firm" behind closed wall estimates. Too many variables. And customer gets mad with "that didn't take long" and you ask for the agreed price, but will "but you said $X" when it took you twice as long as you estimate and try to get the upcharge, so you eat the T&M extras. The risks of being in business.
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Thanks for the reply Fred. I'm not 100% sure by what "or charge high with if it takes". Does that mean I should have quoted $2,000 from the beginning with a note that the job could go under $2,000 if there are no surprises?

This experience was also a lesson about setting expectations with customers. In the future I will clearly mention in my initial consultation that if unforseen circumstances develop once work has started the price may increase depending on the severity of the unforseen circumstance.
 
sw_ross said:
Do you regret not taking a closer look into the crawlspace before committing to a price? I’ll admit I’ve been in similar circumstances and wish I would’ve put a little more time into checking things out ( like a crawlspace).

I’ve decided to spend more time researching my circuit routing options before giving a bid price. I add that time spent (1-2 hours) to the price of the bid when compiling the price. I figure it’s time that has to be spent regardless if I end up doing the job.

If I still end up with some possible unknown challenges (like getting a wire from the basement into the attic) I’ll try to qualify the job as a T&M job.

The more unknowns there are the more risks there is in giving an accurate price. I’m trying to get better at eliminating as many unknowns as possible before giving a price.
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Do I regret not crawling under the house before quoting? Yes, I don't enjoy having this conversation of the job is going to cost more halfway through the job.

Also even if would have crawled I think I would have had a hard time of getting my bearings of where the panel was in relation to the (2) openings that the circuit would have to go through before it reached the accessible portion of the crawlspace. I attached a drawing of the crawlspace I made last night.

Moving forward as much as I don't like the idea of crawling under a house for estimate purposes I should crawl under the house before quoting a price. Had I taken the 20 to 30 minutes to figure out the route of my circuit under the house while crawling I would have discovered the major access obstruction in the crawlspace. I need to find a heavy duty jump suit/coveralls for this task
 

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You don't necessarily need to crawl around to find a route, just peek into the crawlspace to see what you're up against. Add a bit to the price to cover it. You can't take forever and a day to scope out and plan for every detail.
 
Yes, you should have asked for the $2000 up front. Unless you confirm you do will a direct path,you should presume you won't.


I once priced a job pulling a residential generator feeder where the installer had told him it couldn't be done. When I gave the price, the customer asked why it was "so high?" I explained about the unforeseen difficulties and why I had to base a fixed price on "worst case" results.

He then asked if I would lower the final price if it ended up taking less time than I anticipated. I responded by asking if I could raise the final price if it took longer. He thought for a moment, smiled, and shook my hand. By asking him what I did, he realized what he was asking of me.
 
Shak180 said:
Do I regret not crawling under the house before quoting? Yes, I don't enjoy having this conversation of the job is going to cost more halfway through the job.

Also even if would have crawled I think I would have had a hard time of getting my bearings of where the panel was in relation to the (2) openings that the circuit would have to go through before it reached the accessible portion of the crawlspace. I attached a drawing of the crawlspace I made last night.

Moving forward as much as I don't like the idea of crawling under a house for estimate purposes I should crawl under the house before quoting a price. Had I taken the 20 to 30 minutes to figure out the route of my circuit under the house while crawling I would have discovered the major access obstruction in the crawlspace. I need to find a heavy duty jump suit/coveralls for this task
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I had a similar situation recently. HO wanted to eliminate a small panel in the middle of the house so they could knock a wall down. I had already been there 40 minutes doing a "free estimate". (In quotes because it's only free to the potential client, very costly to you.) I spoke with the HO to understand their needs. Conference called with HO's spouse. I looked at the exterior of two outdoor panels, the indoor panel, and surveyed the crawl space with a high powered flashlight from the crawl space entrance. Attic space was inaccessible. Still not enough information on how the cables were routed. It required crawling around under a house to properly quote the job.

Bottom line: I did all I could without getting dirty and without using tools to give this quote. This is where I draw the line between "free estimate" and "paid investigation in preparation of doing a job". I told the HO I would need a labor hour paid in order to further investigate and come up with a price and a plan for doing the job. And "no, it doesn't come off the price if you buy the job". I'm doing real work that requires being paid.

When I first started doing EC work, I sometimes would spend two hours looking at a job including attic crawling, crawl space exploration, and opening up panels and boxes. I was able to come up with very informed prices doing this, but many times did not get the job so I wasted a lot of labor. The more you investigate, the more likely you will find problems that increase the cost. The higher the cost, the more likely the HO will buy from someone else. I learned I can't give away the store just to try to land a job. By limiting your free look and charging for time to understand complex jobs, you are creating a balance where you win the easy jobs that didn't cost much to quote, and don't overspend quoting jobs you won't win because in the end you will be too expensive.
 
oldsparky52 said:
That is one thing that I would never agree to. For me, it was a set price or it's T&M.

I also agree that a "budget" number is something to avoid if possible. I would make every effort to avoid doing this to the point that the dock builder that sold a lot of my jobs would get extremely frustrated with me.
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How does that work for the customer? If I want you to execute a scope of work, I'm not going to allow you to invert my wallet with a "between $100 and $1,000" estimate, or no estimate at all.
 
You can always bid / quote high and if things go extremely well, you can say, "Well, I told you $2000 originally, but since things went so well, I'll be willing to accept $1,750". That makes for some very happy customers.
 
There is some very good advice in this thread so far. I'd like to point out one additional thing. It looks like you are not charging enough for your services.

Shak180 said:
My estimates are based on how many hours I figure a job will take to do, material costs + a 20% mark up, and fuel costs.
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"how many hours I figure a job will take to do" - Correct, but new EC's tend to under estimate hours. Keep a log of your estimated hours and actual hours. (Dividing your jobs by type will give you better results.) You will notice a trend. You will see that your estimates are off by some percentage on average. Once you determine that percentage, start adding that amount to your estimates. Continue keeping the log, continue looking at the trend, continue adjusting the amount you add until the offset approaches zero.

"material costs + a 20% mark up" - This markup is way too low. Are you taking into account the labor time to: figure out which materials are needed to do the job; order the materials; go get the materials; make another trip because you forgot something; and return materials not needed? You have inventory materials on your truck just waiting to be used. Are you taking into account the added vehicle costs of transporting these materials (more weight = more costs); and an allowance for damaged materials you throw away? I markup materials 100% and I'm on the low side from what I've read. There are EC's who have a sliding scale of markup between 100-600%.

"fuel costs" - If you are just looking at fuel, you are losing money on vehicle costs. What about oil and other fluids, repairs, amortization of purchase costs, insurance, and washing? The IRS says that a passenger car costs 56 cents a mile to operate. I calculated my service truck costs $1.00 a mile to operate.

You didn't mention overhead costs. Are you charging for indirect labor, office expense, attorney and bookkeeping fees, training expense, and lots of others? Indirect labor includes labor hours for "free estimates", job planning, training time, doing your own bookkeeping, drawing up contracts and estimates, emailing clients, and anything else where you are working your business but not getting paid by direct labor.

I also don't know if you are charging the correct labor hour rate. Have you calculated this rate based on all your direct expenses plus profit? Or did you guess or use somebody else's rate?

You have five months of data in your account books. Every one of those expenses should be applied to a category (direct labor, overhead, vehicle expense, rentals, etc.) that creates a rate you you charge clients. Any expense not in one of those categories is a loss. This is the number one mistake new EC's make. They don't charge enough money and the business eventually fails. There are plenty of threads on this subject here and on electriciantalk.com. I suggest you read them.
 
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480sparky said:
You can always bid / quote high and if things go extremely well, you can say, "Well, I told you $2000 originally, but since things went so well, I'll be willing to accept $1,750". That makes for some very happy customers.
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IMHO, this is a mistake. If the client agreed to pay $2000, charge them $2000. While they might be happier if you charged them less, they would definitely be angry if you said "the job ran longer than I expected so I'm charging you $2,250."

If you are estimating labor hours correctly, you will sometimes get the job done early and sometimes get the job done late by about the same percentage. The times you get paid a little extra because you finished early, cover the times you finish late. If you give back money to the client, you are giving them your profit. Do you want lower profits? I don't.
 
Like I've warned people over and over, you reach a point where you get too confident in your ability to size up a job and/or shoot from the hip on a price.

I agree that the customer seems to have been really cool about the scenario. Most people want a firm price before starting, and that's how much you get.

Learn from it. Don't forget that time you really whiffed at one when you were just starting out. And from now on, beware of yourself
 
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