Another post got me wodering

[bikeindy]

Here is why I can't charge that $250.00 Or even the $400+. I bid a job the other day. 3300SF new office space wood construction and the owner wants the price to be right so asks for NM wire, all 20 amp circuits. I am ok with that. 200 A service underground to the pole about 100', POCO supplies meter base and underground service wire. owner to provide all surface mount fixtures and I supply the rest. it is office space so lots of phone and cable only a few can lights. My bid comes in at $ 9100.00 She receives a bid from an EC who does lots of production homes has 10+ trucks I am not sure, so I guess he is a little slow right now wants to keep his guys busy. his bid $4750.00 I mean HELLO!!! what the $^%&%^ is he doing? she asks me if I can get closer to that I said, "sure and I'll eat dinner at the soup kitchen.

 

[emahler]

Here is why I can't charge that $250.00 Or even the $400+. I bid a job the other day. 3300SF new office space wood construction and the owner wants the price to be right so asks for NM wire, all 20 amp circuits. I am ok with that. 200 A service underground to the pole about 100', POCO supplies meter base and underground service wire. owner to provide all surface mount fixtures and I supply the rest. it is office space so lots of phone and cable only a few can lights. My bid comes in at $ 9100.00 She receives a bid from an EC who does lots of production homes has 10+ trucks I am not sure, so I guess he is a little slow right now wants to keep his guys busy. his bid $4750.00 I mean HELLO!!! what the $^%&%^ is he doing? she asks me if I can get closer to that I said, "sure and I'll eat dinner at the soup kitchen.

bike, there is a big difference between $300-$185 and $9100-$4750.

I went to Wendy's the other day. When I go to Wendy's I order the same thing, everytime. 2 Jr. Bacon Cheeseburgers, Medium Fries and a Med Coke. 1 yr ago, all for items were on the $0.99 menu. It cost me $4.20 total. The other day, the $0.99 menu is now the $1.09 menu, and it contains small fries and small drink. So my same lunch, that was $4.20 a year ago was $5.41 the other day. Do the math, that is a 23% increase. And people pay it no problem.

Now if the meal was $1000 a year ago and they tried to increase it 23%, that would be a $230 increase. People would say "wait a sec"

Well, extrapolate that to what we do. Our real expenses (gas, materials, food, etc) have all increased at least 20% in the past year. Do you honestly think that a 20-25% increase of your fan install prices will cause you to lose all your work. $185 +20% increase = $222.

Do you think most people will really care if you are $185 or $222?

But 1,850 vs $2,222 is a $400 difference, that's real money to people. But $30 or $40? That's McDonalds for the parents and 2 kids. It's not much these days.

Now, I will add this. In the particular development that you referred to, you are known as the guy who installs fans for $185. Neighbors talk. Your work is for referral. They tell eachother the price. If you suddenly charge $225, you'll have pissed people. But outside of that development, the sky is the limit.

Just whatever price you charge, give the people their money's worth and then some.

 

[bikeindy]

bike, there is a big difference between $300-$185 and $9100-$4750.

I went to Wendy's the other day. When I go to Wendy's I order the same thing, everytime. 2 Jr. Bacon Cheeseburgers, Medium Fries and a Med Coke. 1 yr ago, all for items were on the $0.99 menu. It cost me $4.20 total. The other day, the $0.99 menu is now the $1.09 menu, and it contains small fries and small drink. So my same lunch, that was $4.20 a year ago was $5.41 the other day. Do the math, that is a 23% increase. And people pay it no problem.

Now if the meal was $1000 a year ago and they tried to increase it 23%, that would be a $230 increase. People would say "wait a sec"

Well, extrapolate that to what we do. Our real expenses (gas, materials, food, etc) have all increased at least 20% in the past year. Do you honestly think that a 20-25% increase of your fan install prices will cause you to lose all your work. $185 +20% increase = $222.

Do you think most people will really care if you are $185 or $222?

But 1,850 vs $2,222 is a $400 difference, that's real money to people. But $30 or $40? That's McDonalds for the parents and 2 kids. It's not much these days.

Now, I will add this. In the particular development that you referred to, you are known as the guy who installs fans for $185. Neighbors talk. Your work is for referral. They tell eachother the price. If you suddenly charge $225, you'll have pissed people. But outside of that development, the sky is the limit.

Just whatever price you charge, give the people their money's worth and then some.

Point taken. my point is that people are calling around and $185 is reasonable here and $250 isin't I have had a few calls lately on the fans.( seems no one has any in their new homes) I ask where they live and how they know about me. I was looking to raise my price a bit so I quoted a few at $200. these were to folks that didn't know people who got the $185 price. The answer was, " ok thanks I'll call back later." no call backs on those 3 but scheduled every $185 quote. I don't know it may just have been chance $185 may have gotten the same response from those 3. but like I said I am doing well at $185. for those jobs. installed 134 of those last year. most people have us do 4 at a time.

BTW it is still $.99 here ate at Wendy's today

 

[emahler]

Now, one thing I can tell you that we do different...we don't quote over the phone. I will say up front, that I am in favor of trip charges, but we don't charge one. Our residential service area is small enough, that we can do without it.

But we won't give a price until we look at it. It makes a huge difference if my tech is there ready to install it and says $350, than if they call me on the phone and I quote $350.

By going there, we've already had them make a committment (sp?) of their time to see us. They can tell us no, and we leave with no problems. But since they already have the time blocked out, and we are already there, what's the big deal to call around and waste time to save $50 or $100.

I don't think there is a contractor out there consistenly getting $300 for a fan install by quoting over the phone. But there are hundreds, if not thousands, that are consistently over $300 by the method we use.

But if you are doing phone quotes, try $199. People have a mental block of $200 vs. $199. It sounds a lot more expensive to them.

Good luck.

As a little food for thought, I recently re-discovered one of my favorite quotes of all time "Whether you think you can or you think you can't. You are correct" - Henry Ford

 

[bikeindy]

As a little food for thought, I recently re-discovered one of my favorite quotes of all time "Whether you think you can or you think you can't. You are correct" - Henry Ford

I like that. I fired a guy about 16 months ago because he used the word can't one too many times and I had warned him several times and showed him it can be done. I told my 3 boys that can't is a 4 letter word, the word I hate most.

 

[nysprkdude]

Nothing wrong with that bikeindy.

Where I am - EVERYTHING is expensive ~ NJ is #1 in auto insurance, taxes, blah, blah, blah

Celtic.....in hopes of making you feel better about endeavoring as a contractor in NJ, try NY.

The highest TOTAL taxes (property, sales, income, gasoline, etc.), the highest WC (with the lowest weekly payout for such ), and the cost of living dictates higher wages.

Of course ....the grass is always greener on the other side!

BTW....being a newcomer to the forum, I appreciate the fact that there actually are other contractors who take pride in the trade and represent such with integrity.

Remember...when they ask you how it's going.

It's going....it just ain't going away!

 

[growler]

how do you determine "gouging"?

"Gouging" is not what most people think it is. Gouging is when you try to take advantage of certain situations. In 2001 we had an ice strom and thousands of people were without power ( trees falling across service cables ). For the next two are three days some contractors charged whatever they wanted and made lots of money ( gouging ). I charged the normal rate and didn't make a killing but didn't gouge.

If your rates are normally $200 and hour and you keep charging $200 and hour then you are not gouging but if your normal rates are $75 an hour and you have an ice storm rate increase to $200 an hour then you are considered to be gouging.

If you keep your rates consistant they may be high but not gouging. If you only charge the old or any other group that may not know any better a high rate then you had better watch out ( you are gouging ).

 

[celtic]

Celtic.....in hopes of making you feel better about endeavoring as a contractor in NJ, try NY.

NY is a nice place to visit...but I wouldn't want to live there....ahhh, I feel better already

About 4 years ago, I almost moved to Staten Island ... I almost won the lottery too, but that didn't work out either