Customer Wants a Breakdown

[480sparky]

I guess what I'm really trying to get out of this thread is a tactful and polite way of telling the customer I don't think it's any of his business what my hourly rate is or how much I'm marking up the materials. I'll even throw the materials in for free or give him free labor which ever he would prefer but the job is still going to be the same price.

I gave him a price to do the job as specified and he's welcome to get other bids. There are plenty of contractors out there willing to give him an estimate and plenty that will do this job on a T&M basis if that's what he wants.

I don't get in to discussions about what I mark my materials up, nor what I charge for an hourly rate. I explain that I have expenses that need to be met, and I charge accordingly.

I think telling the customer about the 'free' labor or 'free' material is a good idea. If the customer doesn't bite, simply move on.

 

[growler]

I guess what I'm really trying to get out of this thread is a tactful and polite way of telling the customer I don't think it's any of his business what my hourly rate is or how much I'm marking up the materials.

Tell him to go forth and multiply, alone. That's much more tactful than the way I would put it. :grin: :grin:

 

[petersonra]

Refusal to break down an estimate makes it seem to me like you are trying to hide something, IMHO.

Thats exactly what he is trying to do. Nothing wrong with that. If he thinks that information is worth more to him kept secret than released, then keep it secret.

 

[petersonra]

Kick him to the curb. The last one that wanted a multiple breakdown from me wasted 6 hours of my time before hiring someone else. Now I'll just say something like "What were you expecting for a price". They'll usually say something that amounts to less than materials at cost.

Dave

What kind of breakdown takes 6 hours? You already know what your parts and labor cost was when you made the bid. Give him a price that says

labor $xxxxx
parts $xxxxx

I would not be giving him a bom.

I also think the direct approach of asking what his expectations of price is a wise choice. Its entirely possible he has a wildly unrealistic view of what it should cost and you might be able to discuss with him just why that is, and maybe offer alternatives to what he is asking for that can help keep the price under control.

 

[growler]

Thats exactly what he is trying to do. Nothing wrong with that. if he thinks that information is worth more to him kept secret than released.

It's not even that. The guy has two days of work. If the job is 2 months then you can afford to negotiate and see if you can find some common ground that will be beneficial to both parties. For two days a price quote with a take it or leave it attitude is enough. You really can't spend hours trying to bargain with a customer over such a small job.

Customers will take up as much of your time as you are willing to let them have. A price quote is just that, an exact price for an exact scope of work. Materials cost and labor cost are really none of the customer's business. Do you really think that a landscape contractor tells customers that he picks up his labor force in front of the 7-11 and pays them in burritos.

 

[petersonra]

It's not even that. The guy has two days of work. If the job is 2 months then you can afford to negotiate and see if you can find some common ground that will be beneficial to both parties. For two days a price quote with a take it or leave it attitude is enough. You really can't spend hours trying to bargain with a customer over such a small job.

I sort of missed the two day thing.

I agree it is not worth a lot of time trying to secure such a job, but he has a stake in it now, and if another hour in it secures him the job, its probably worth a phone call.

These things are judgment calls. It seemed to me the OP was offended that the guy would even ask. My theory is the customer (or potential customer) can ask for anything. Whether he gets what he asks for or not is something else altogether.

 

[satcom]

I sort of missed the two day thing.

I agree it is not worth a lot of time trying to secure such a job, but he has a stake in it now, and if another hour in it secures him the job, its probably worth a phone call.

These things are judgment calls. It seemed to me the OP was offended that the guy would even ask. My theory is the customer (or potential customer) can ask for anything. Whether he gets what he asks for or not is something else altogether.

When i call any local company for service they quote a price and usually want a credit card up fromt, to charge the service estimate to, no game playing, there are small service companies, in the trades, they don't operate like a part time basement operation, and waste their time with customer playing lets make a deal.

 

[petersonra]

When i call any local company for service they quote a price and usually want a credit card up fromt, to charge the service estimate to, no game playing, there are small service companies, in the trades, they don't operate like a part time basement operation, and waste their time with customer playing lets make a deal.

I agree there is little benefit to the EC to negotiate a whole lot over a small job like this.

A 2 month job, or maybe even a 2 week job, that might be worth some more talk.

It may be that the customer is used to dealing with larger projects and getting breakdowns is part of his method. Its just not real efficient for the EC.

 

[satcom]

I agree there is little benefit to the EC to negotiate a whole lot over a small job like this.

A 2 month job, or maybe even a 2 week job, that might be worth some more talk.

It may be that the customer is used to dealing with larger projects and getting breakdowns is part of his method. Its just not real efficient for the EC.

Bob, in Jersey on larger jobs with homeowners by law we must give them an up front contract price, for the entire job, and in Jersey if we breakdown the labor, and material, the job becomes taxable, the contract may contain a scope of work, but contract price is not a T&M job. Contractors make their money contracting not do day labor work.

 

[360Youth]

You must have given him some kind of hourly rate. How will you handle changes and adders?

I think hourly rate on change orders would be different than overall cost to do a particular job. When doing a home, or any job for that matter, my hourly rate is going to be determined by how long I am there, but if HO wants to move some lights, then we an discuss what it would be to change existing. Then I do not mind telling a customer it will cost you X# dollars per hour to change and they can determine how bad they want it.

 

[Sparky555]

I guess what I'm really trying to get out of this thread is a tactful and polite way of telling the customer I don't think it's any of his business what my hourly rate is or how much I'm marking up the materials. I'll even throw the materials in for free or give him free labor which ever he would prefer but the job is still going to be the same price.

If I'm in a good mood for the breakdown question I'll use my best mild-mannered voice & say something like "Electrical contracting is a tough business. I only charge what I need to stay in business. A lot of contractors are going out-of-business this year."

Dave

 

[tmbrk]

I used to waste alot of time on customers like this. Now I understand that it's just not worth it. As far as explaining my expenses to a customer the most I will say is that I am running a business. I will explain that they are not just paying our salaries but also my overhead. Without giving out dollar values (because it's none of their business) I will list what is involved in running a contracting business. Advertising, vehicles, insurance, workmans comp, rent, tools, uniforms, office equipment and personell, etc...... If they don't get it by then I move on to the next one.

I do all of this in a calm, unoffending tone.

In my opinion if you've already broke down the job into individual tasks with a value assigned to each one, this is far enough.

 

[zog]

I guess I buy a lot of stuff from people that are trying to hide something.
Seldom do I get or ask for a breakdown of the material and labor charges for things I purchase.

I think there is a difference between products and services.

Maybe I should start asking how much I'm being charged for the labor to cook the steak and how much I'm being charged for the steak the next time I go out to eat. This way I can compare the price of the steak to what I can buy it for at the local grocery store and figure out if they are charging me more per hour than what I make.

Dont forget energy costs to cook the steak and all the sides.
Good strip steak $12.99/lb lets say it is a 16oz to make it easy (Had one at steakhouse last night)
Potato $1
Sourcream and other fixins $.25
Big salad (Non-flordia tomatoes)- $4 to buy the veggies and dressing in store

So I come up with $18.24 for the food at the grocery store, plus the energy to cook it all and wash the dishes.

My steak was $15.99 so I was actually paid to eat thier steak, plus they had $1.00 Yingling drafts, cant buy those for less than that at the store.

I tipped 20% (Cute waitress) so about broke even after all was said and done.

Wanna do oil changes next?

 

[ItsHot]

good advice

good advice

The customer either accepts the flat quote in writing, or if they start game playing, we move on, as fast as we can get away from them.

Sounds like good advice to me!

 

[satcom]

Sounds like good advice to me!

It had worked well for many years, only about one in fifty are problem customers, the kind of customer you don't need, your good customers need your time and advice, invest your time in them.

 

[realolman]

I think your statement early on in this thread is exactly right...

I gave him a clear picture of the actual costs if he hires me to do the work.

1. You're gonna take care of everything

2. he doesn't have to do anything

3. he knows what he's gonna hafta pay for that to occur

I can't see how it gets much clearer than that. If he has something else in mind other than clarity, ( which it seems obvious he does ), he's not being honest, and you're probably better off without him

best of luck to you

 

[satcom]

When a customer wants a breakdown, ask them what kind of labor and material breakdown he gets from:

The phone company (phone services)

The cable company (cable programing)

The utility company (electric, heat and light)

The insurance company (auto, home, health)

The mortage company (mortage or rent)

The post office (postage)

The banking services ( service fees and intrest payments)

Or any retail store with posted prices,

And what kind of deal they will work out for him?

 

[aline]

I should just send him my P&L statement.
That's what he really wants to know is how much I'm making.
Doesn't want me getting rich off of him.

He claims he want to know his actual costs for the job.
I gave him the his actual costs for the job if he hires me.
The price will not change. It's a fixed price.

I see no reason why he would need to know what my hourly rate is or how much the materials are. I'm not going to change my price and I'm not going to let him supply the materials.

It's a funny thing. When I used to do T&M jobs I would tell people my hourly rate and how much I would mark up the materials. They would always want to know how much the job was going to cost.

Now that I give them the exact cost upfront they want to know how much I charge per hour and how much I charge for the materials. You would think the most important thing would be knowing their final cost. That's all that really matters.

One of my customers told me about an electrical contactor he hired on a T&M basis. The contractor told him an estimated total price for the job and then he agreed to have him go ahead with the work. He told me when the electrician finished he handed him a bill for twice the amount the contractor had estimated it would cost. Needless to say he wasn't very happy and said he won't use them again. He said the guy did appologize and that he said the materials were a lot more than he thought they would be and it took him longer than expected.

If I give this guy an hourly rate and I finish sooner than expected is he going to want me to reduce the price to match the hourly rate?

You can bet if it takes me longer than expected he's not going to give me more money so that they hourly rate I gave him matches.

The only reason I can see for giving someone an hourly rate and a breakdown on the material costs is if I'm going to to the job at T&M.

 

[iaov]

I guess what I'm really trying to get out of this thread is a tactful and polite way of telling the customer I don't think it's any of his business what my hourly rate is or how much I'm marking up the materials. I'll even throw the materials in for free or give him free labor which ever he would prefer but the job is still going to be the same price.

I gave him a price to do the job as specified and he's welcome to get other bids. There are plenty of contractors out there willing to give him an estimate and plenty that will do this job on a T&M basis if that's what he wants.

Amen Brother!

 

[bobbyho]

What will inevitably happen is they want to know what you are making an hour compared to themselves. Understandable. I got into a discussion about a new furnace with my friend before. He wanted 3 prices (free estimates) and breakdowns on each. He was suprised when no one would give a breakdown. Actually he was offended. He said, "I went to college for 6 years, I know contracting is difficult but I don't believe someone should make $2000.00 dollars in 1 day." I told him, "Number 1, pricing is proprietary information, what is to stop you from taking my price and showing contractor #2 and saying beat this by $1.00 and the job is yours. Number 2, you are having a licensed professional do the job. At the end of the day, it is done, it is done right and you can have heat and hot water again. Lastly, do you think the company you work for is not making a profit on you?" A service change, I would say that it is what it is and then say I haven't raised my prices in 5 years (or something like that). On a bigger job, I would use the old Mike Stone approach. I can give you breakdown but it will cost you $75.00 per hour at a 4 hour minimum for the design.