First year in business and just had my first digruntled customer

[Mule]

When a customer ask this question are they asking for a ballpark T&M estimate or are they asking "how much" a quote.

This topic started out as a disgruntled customer and turned quickly to a discussion of T&M versus Bid work but the fact that the customer did ask how much suggest to me that she wanted to know "how much".

When I ask how much I really want to know an exact number or a firm price.

When the day comes that you can't quote a simple service change there is something wrong.

If a customer wants a price to do T&M work then give them one but if a customer ask for a firm quote then a contractor should be prepared to do so or simply tell the customer that they don't do that type of work.

I agree, but in my case, I like T/M so its offered first, then if they want a bid, that's ok too.....end of story

Mule, give it 20 yrs and a few employees...you'll have lots of disgruntled customers

Im sure thats correct....But as my post said, one year and only one...to me that means Im doing something right, despite what your trying to preach.

And secondly when I have employees I'll be inclined to do my business more like you guys, but for now, I like how it functions..with T/M

I wounder what a "gruntled" customer would be like

I dont know, but I do know, it wont do you guys any good to look it up on Websters for a definition, especially when it comes to the word "Estimate", because you refuse to ackknowledge it........................:grin:

 

[emahler]

Mule,

No preaching, but a bit of advise...

"Act as if"

If you build a customer base that expects you personally, at a reduced T&M price...how many are gonna be your customers when you hire employees and charge a higher fixed rate price out of neccesity?

Should you expand, you are setting yourself up to have to rebuild most of your customer base.

Employees and resi T&M rarely go well together. Too many variables. And at the end of the day you'll end up discounting many invoices to keep the customer happy.

 

[SEO]

Employees and resi T&M rarely go well together. Too many variables. And at the end of the day you'll end up discounting many invoices to keep the customer happy.[/QUOTE]
This is especially true with a small shop when the owner puts his own feelings into each invoice. A one man shop may be able to survive by discounting invoices to some degree but when you have payroll and tax obligations for an employee it's a different game.

 

[Rewire]

I think one of the best things that happened was when I hired an office manager and I stopped doing the billing . Now it is what it is and all I see is the checks comming in.I have learned that everyone will fish for the deal but I don't have to take the bait.

 

[emahler]

I think one of the best things that happened was when I hired an office manager and I stopped doing the billing . Now it is what it is and all I see is the checks comming in.I have learned that everyone will fish for the deal but I don't have to take the bait.

even better, for resi service, is to set up price manuals and let the techs quote the price, do the work and collect the check/cc....then you don't even have to pay an office manager to send out invoices or wait to collect the money....cash flow goes through the roof and so does profit....not because you charge more, but because it costs you less to collect the money...

 

[emahler]

Employees and resi T&M rarely go well together. Too many variables. And at the end of the day you'll end up discounting many invoices to keep the customer happy.

This is especially true with a small shop when the owner puts his own feelings into each invoice. A one man shop may be able to survive by discounting invoices to some degree but when you have payroll and tax obligations for an employee it's a different game.[/QUOTE]

add to that...when you do the work, you know the time and issues that arose....when you send out an employee, and the customer calls and says "he was dogging it"...what do you do?

 

[Rewire]

even better, for resi service, is to set up price manuals and let the techs quote the price, do the work and collect the check/cc....then you don't even have to pay an office manager to send out invoices or wait to collect the money....cash flow goes through the roof and so does profit....not because you charge more, but because it costs you less to collect the money...

The problem here is alot of our work is on second homes and the customer is not around when the work is done and some of our work is for condos that has to be paid by the board. I am working on some flat rate prices so we can collect on service calls.We are taking CC now so it will be easier to collect on the spot which is the best.

 

[Mr. Wizard]

Dang, poor ole Mule can't seem to post a topic without it leading into a "how much $" debate. Ok, so he charges less than you guys - so what. Where a lot of ya'll are from, gas is still over $2.50 a gallon. Around these parts it's still $1.65 - $1.70. Believe it or not, things are cheaper in other parts of the country - electrical work being no exception. I know that if I were to charge what a lot of ya'll charge, I'd be hungry real quick. I would love to get $2800 for a 200 amp service, but that price would get me laughed out of town. I'm not trying to get off track regarding the original intent of the thread, nor am I trying to knuckle up for Mule, but if he's happy with it, then that's him. I disagree with him and everyone here from time to time, but some of ya'll take it a bit too personal. We're supposed to get on this forum and learn from each other and have a good laugh from time to time, not beat each other up.

 

[Dnkldorf]

We're supposed to get on this forum and learn from each other and have a good laugh from time to time, not beat each other up.

The problem, as I see it is consistency. Alot of these guys change their stories from one post to another, and don't even remember what they posted from time to time.

And then for some reason they think the way they, or their boss does business, is the only way known to mankind to do it.

Just because you failed to make money or grow your business one way, doesn't mean someone else can't, it just means you can't.

Just stay consistent with your posts, and let those looking for help sort through all the nonsense, (sound advice) and form their own opinion.

 

[Mr. Wizard]

The problem, as I see it is consistency. Alot of these guys change their stories from one post to another, and don't even remember what they posted from time to time.

And then for some reason they think the way they, or their boss does business, is the only way known to mankind to do it.

Just because you failed to make money or grow your business one way, doesn't mean someone else can't, it just means you can't.

Just stay consistent with your posts, and let those looking for help sort through all the nonsense, (sound advice) and form their own opinion.

Amen, brother. Well put.

 

[Mule]

Mule,

No preaching, but a bit of advise...

"Act as if"

If you build a customer base that expects you personally, at a reduced T&M price...how many are gonna be your customers when you hire employees and charge a higher fixed rate price out of neccesity?

Should you expand, you are setting yourself up to have to rebuild most of your customer base.

Employees and resi T&M rarely go well together. Too many variables. And at the end of the day you'll end up discounting many invoices to keep the customer happy.

Emaler, your trying to help me, and I thank you. But some of your assumptions are wrong....first "reduced T&M"... our rates are not reduced, we charge the same as all other shops in our area, and we dont plan on increasing our rates unless the local market as a whole does the same thing.

Second.....rebuilding my customer base.....Our customer base frankly is quite diverse. We have commercial accounts, a industrial "out of town" EC we do work for, two different large ranch accounts, a large manufacturing cooperation, two landlord accounts, a kitchen remodeler, a remodeler/builder, two different HVAC contractor accounts, a retail chain, parking lots, two different large apt complex's, a sound and lighting contractor, mulitple churches, and not to mention our day to day calls from yellow pages and word of mouth resi business....and Oh yes, we've created this customer base in 12 short months. not bad Id say??

third....we are not a resi contractor...resi is probably about 1/4 of our work....In fact we made the comment the other day that we didnt even have a roll of romex on the van for nearly 3 months...

And for merging into hiring a employee.....You guys will be shocked by me saying this, and will probably bombard me with comments, but when I do, this employee will be a partner, and will be paid by the unit, the customer will be billed by the unit, and my profit will be by the unit. I will have alot of hurdles to create this system, but the auto mechanic world has done it for decades...In fact we just did a resi rough in for a retired Ford guy whom sold new cars to dealers, Ive had alot of discussions with him about the inside scoop on flag rate pricing..... and I am going to try it....call me crazy, but I just dont do things a certain way, just because everyone else does it. Im a thinker, and a "Out of the box'' person....

Thanks for your comments.............

 

[aline]

we charge the same as all other shops in our area, and we dont plan on increasing our rates unless the local market as a whole does the same thing.

That's the problem all the other shops are thinking the same thing so the market as a whole never increases.

 

[aline]

And for merging into hiring a employee.....You guys will be shocked by me saying this, and will probably bombard me with comments, but when I do, this employee will be a partner, and will be paid by the unit, the customer will be billed by the unit, and my profit will be by the unit. I will have alot of hurdles to create this system, but the auto mechanic world has done it for decades...In fact we just did a resi rough in for a retired Ford guy whom sold new cars to dealers, Ive had alot of discussions with him about the inside scoop on flag rate pricing..... and I am going to try it....call me crazy, but I just dont do things a certain way, just because everyone else does it. Im a thinker, and a "Out of the box'' person....cool:

The system has already been created.
There's no need for you to re-create it.
You just need to learn about the system, how it works and then implement it.

These guys have the system down to a science.

http://www.clockworkhomeservices.com/

I just dont do things a certain way, just because everyone else does it. Im a thinker, and a "Out of the box'' person....cool:

This tells me other wise.

we charge the same as all other shops in our area, and we dont plan on increasing our rates unless the local market as a whole does the same thing.

 

[Mule]

That's the problem all the other shops are thinking the same thing so the market as a whole never increases.

So what are you trying to say? that EC's should get their heads together and just raise the prices....? we used to live in a refinery town where all of the gas stations did this.....and the gas was high and is high today....I refused to play their game....and bought most of my fuel else where

Id come closer to believing that in this country with thousands of Independent EC's, the market drives the pricing, and these prices wouldnt be depressed because EC's were not entrepeneurs....

 

[aline]

Mule,

This is what I don't understand. In this quote you're talking about the very thing many on this forum are recommending you do. Quit charging by the hour and go to a flat rate or fixed bid system instead of T&M. Yet when this is suggested to you on this forum you fight it tooth and nail.

And for merging into hiring a employee.....You guys will be shocked by me saying this, and will probably bombard me with comments, but when I do, this employee will be a partner, and will be paid by the unit, the customer will be billed by the unit, and my profit will be by the unit. I will have alot of hurdles to create this system, but the auto mechanic world has done it for decades...In fact we just did a resi rough in for a retired Ford guy whom sold new cars to dealers, Ive had alot of discussions with him about the inside scoop on flag rate pricing..... and I am going to try it....call me crazy, but I just dont do things a certain way, just because everyone else does it. Im a thinker, and a "Out of the box'' person....

So what are you trying to say? that EC's should get their heads together and just raise the prices....?

Sure would beat EC's allways trying to undercut each other's price until no one is making money.

Someone has to take that first step towards increasing prices. Why not make that someone you.

 

[Rewire]

Mule,

This is what I don't understand. In this quote you're talking about the very thing many on this forum are recommending you do. Quit charging by the hour and go to a flat rate or fixed bid system instead of T&M. Yet when this is suggested to you on this forum you fight it tooth and nail.

Mule is his own straw man

 

[ohm]

Mule is a one man shop and a lot of folks here are trying make him into a 100 man shop. IMO he's making a good living, having fun, and building his business.

Who are we to dictate to him that he's wrong?

 

[bradleyelectric]

Mule is a one man shop and a lot of folks here are trying make him into a 100 man shop. IMO he's making a good living, having fun, and building his business.

Who are we to dictate to him that he's wrong?

Businessmen that have been doing this longer than he has, studied what we should be doing and why, and want to share with someone we have a love for.

 

[emahler]

Emaler, your trying to help me, and I thank you. But some of your assumptions are wrong....first "reduced T&M"... our rates are not reduced, we charge the same as all other shops in our area, and we dont plan on increasing our rates unless the local market as a whole does the same thing.

Second.....rebuilding my customer base.....Our customer base frankly is quite diverse. We have commercial accounts, a industrial "out of town" EC we do work for, two different large ranch accounts, a large manufacturing cooperation, two landlord accounts, a kitchen remodeler, a remodeler/builder, two different HVAC contractor accounts, a retail chain, parking lots, two different large apt complex's, a sound and lighting contractor, mulitple churches, and not to mention our day to day calls from yellow pages and word of mouth resi business....and Oh yes, we've created this customer base in 12 short months. not bad Id say??

third....we are not a resi contractor...resi is probably about 1/4 of our work....In fact we made the comment the other day that we didnt even have a roll of romex on the van for nearly 3 months...

And for merging into hiring a employee.....You guys will be shocked by me saying this, and will probably bombard me with comments, but when I do, this employee will be a partner, and will be paid by the unit, the customer will be billed by the unit, and my profit will be by the unit. I will have alot of hurdles to create this system, but the auto mechanic world has done it for decades...In fact we just did a resi rough in for a retired Ford guy whom sold new cars to dealers, Ive had alot of discussions with him about the inside scoop on flag rate pricing..... and I am going to try it....call me crazy, but I just dont do things a certain way, just because everyone else does it. Im a thinker, and a "Out of the box'' person....

Thanks for your comments.............

Mule, I don't care what your hourly rate is...heck, I've already posted how someone can make a good profit charging $30/hr and paying a guy $25/hr....but it is a discounted rate for the simple fact that you are the one currently doing the job...

when you do a service change for T&M and it takes you 8 man hours.....what is going to happen in 2 yrs when that customer moves to a new home, hires you for a service change (the same one you did 2 yrs ago) and you send an employee who takes 14 man hours?

when your customer base (resi or commercial) is used to you doing the work....what is gonna happen when you send an employee who doesn't communicate as well, and takes longer to do a task than you would?

so, the reality is, you are currently doing work at a discounted T&M rate...it's just time that's discounted...

 

[emahler]

Mule is a one man shop and a lot of folks here are trying make him into a 100 man shop. IMO he's making a good living, having fun, and building his business.

Who are we to dictate to him that he's wrong?

if he didn't truly want to hear any of this, he wouldn't post here...he may fight it, argue, kick, punch, and stick his fingers in his ears while screaming "lalalalalala"....but the truth is, he wants to hear this.....and would it be better if those who have "been there, done that" watched Mule run head first into a brickwall, all the while saying "good mule, way to go"?