Owning the market...
- Thread starter NeedClean
- Start date
precisionpower
New member
Absolutely.....NOT!!!! By doing this, or taking this business approach, you will accomplish one thing: A heck of alot more work, for a heck of a lot less money. That scenario is the exact opposite of a profitable, efficient business accumen. The standards of bidding cheap will become acceptable and branch out from county to county, eventually ruining your business profits. the only thing this would breed is more people doing the same thing, lowballing you. Before long, you'll be bidding parking garages at $500 per 100,000 sq. ft. Get this thought out of your mind, and focus on productive business positions, such as market leverage and targeted marketing/advertising.
Steven Button
Administrator
nnnooooooo!!!
Pricing 'just to get the work' is not a sound business decision in my opinion. Perhaps when you have some sort of economy of scale this pricing strategy may work, but to base it solely on owning the market may result in little or no return on the volume... the 'volume pricing' guys make money, but their pricing is based upon their equipment, technique, workmanship and efficient procedures.
... Besides if you can get a fair market price for your services, why sell yourself short on undercutting? You know your business model and margins better than anyone, but if you are starting out, don't have the resources, can't deliver quality results you may just harm your ability to grow a successful business.
On a sidenote, you may also harm 'the industry' if you cannot deliver quality work on this pricing.
Pricing 'just to get the work' is not a sound business decision in my opinion. Perhaps when you have some sort of economy of scale this pricing strategy may work, but to base it solely on owning the market may result in little or no return on the volume... the 'volume pricing' guys make money, but their pricing is based upon their equipment, technique, workmanship and efficient procedures.
... Besides if you can get a fair market price for your services, why sell yourself short on undercutting? You know your business model and margins better than anyone, but if you are starting out, don't have the resources, can't deliver quality results you may just harm your ability to grow a successful business.
On a sidenote, you may also harm 'the industry' if you cannot deliver quality work on this pricing.
John Doherty
New member
The end result will be owning an unprofitable market.
absolutelyclean
New member
Don't do it.
Hot Shot Power Clean
New member
++++++++++++++1
Ashley Phillips
Moderator
That aint how to spell no, it's NO. Just so you know but it's no excuse because you should know better.
The Cleaner
Vetran Washer 30 Years Plus
Fla wrote the book on that one, and we all know how that turned out!
IndyExterior
New member
What will you own with a real low ball contract?
Don't confuse the $99 house wash and $25 dumpster pad specials with low balling. The idea is no different than what Stanley Steemer and virtually all carpet cleaners, HVAC guys have been offering for years. It's not bait and switch ether. It's get a customer to pay you to come and and upsell them. You aren't selling them anything they don't need or want. It just gives you the opportunity to show them their problem and offer a solution.
Don't confuse the $99 house wash and $25 dumpster pad specials with low balling. The idea is no different than what Stanley Steemer and virtually all carpet cleaners, HVAC guys have been offering for years. It's not bait and switch ether. It's get a customer to pay you to come and and upsell them. You aren't selling them anything they don't need or want. It just gives you the opportunity to show them their problem and offer a solution.
Grime Busters LLC
New member
I'm in business and am competitive, but have never considered stepping on another reputable companies toes.
In the Phoenix area, there are more unlicensed, incompetent splash and dash companies that I've personally seen their quotes, which would workout to maybe $10.00 per man hour, net.
With this economy, I'm willing to work with good contract and their budgets. But so far I have found that the quality of the work we do keeps my customers regardless of costs, and I get more word of mouth referrals than I receive hits from my advertising.
In the Phoenix area, there are more unlicensed, incompetent splash and dash companies that I've personally seen their quotes, which would workout to maybe $10.00 per man hour, net.
With this economy, I'm willing to work with good contract and their budgets. But so far I have found that the quality of the work we do keeps my customers regardless of costs, and I get more word of mouth referrals than I receive hits from my advertising.
Christopher
Moderator
Remember that the reason you are in business is to make a profit, not to just be busy.
Because WalMart has the low-price thing working for them, a lot of companies try to do the same thing but it does not work.
Some companies think that if they have all the work, they can charge low prices but if your fuel, insurance, payroll, etc... all stays the same, you are not making profit, just staying busy and maybe paying the bills.
What a lot of people do not think about is that WalMart has thousands of stores, not just a few and they buy stuff in many, many tractor trailer loads so they buy in huge amounts so they get it cheaper than most and can do the low price thing and still make a profit.
Businesses can't do that unless you had 50 or more crews out there so you knock it out very fast and you need a lot of work to keep your crews busy then your quality suffers then someone else comes along and does a better job, is more reliable and then where are you?
Just my opinion.
_________________
Superior Power Washing<O
</O
Chris Chappell<O</O
361-853-2513<O</O
Cleaning Driveways Sidewalks and Walkways in Corpus Christi Texas<O</O
Fleet Washing in Corpus Christi Texas
Because WalMart has the low-price thing working for them, a lot of companies try to do the same thing but it does not work.
Some companies think that if they have all the work, they can charge low prices but if your fuel, insurance, payroll, etc... all stays the same, you are not making profit, just staying busy and maybe paying the bills.
What a lot of people do not think about is that WalMart has thousands of stores, not just a few and they buy stuff in many, many tractor trailer loads so they buy in huge amounts so they get it cheaper than most and can do the low price thing and still make a profit.
Businesses can't do that unless you had 50 or more crews out there so you knock it out very fast and you need a lot of work to keep your crews busy then your quality suffers then someone else comes along and does a better job, is more reliable and then where are you?
Just my opinion.
_________________
Superior Power Washing<O
</OChris Chappell<O
</O361-853-2513<O
</OCleaning Driveways Sidewalks and Walkways in Corpus Christi Texas<O
</OFleet Washing in Corpus Christi Texas
Tony Shelton
BS Detector, Esquire
There are only two reasons for coming in significantly lower than the competition that I know of.
1) You've found a way to do the job faster and using less resources than the competition. (like Walmart)
2) You have a set amount in your head that you would like to make by yourself and you have figured out that you can make that amount in XX number of hours and you're willing to do it.
If you're doing it for reason number one, you may be on to something.
If you are doing if for reason number two, you can probably make your goals in that manner, but you will hit a wall where you can't hire anyone else because you don't have the money to make that step.
If you are only planning on working by yourself and making xx dollars is your goal, then what you are saying may be ok for you.
I know a bunch of guys are going to give me crap for saying that, but in all honesty how much of a dent in the market can one guy working alone make? If he does a good job and is happy with $60.00 per hour, so what?
If he does a bad job, he's going to eventually lose the accounts anyway.
Can I get an Amen? or do I get a smack for saying that?
1) You've found a way to do the job faster and using less resources than the competition. (like Walmart)
2) You have a set amount in your head that you would like to make by yourself and you have figured out that you can make that amount in XX number of hours and you're willing to do it.
If you're doing it for reason number one, you may be on to something.
If you are doing if for reason number two, you can probably make your goals in that manner, but you will hit a wall where you can't hire anyone else because you don't have the money to make that step.
If you are only planning on working by yourself and making xx dollars is your goal, then what you are saying may be ok for you.
I know a bunch of guys are going to give me crap for saying that, but in all honesty how much of a dent in the market can one guy working alone make? If he does a good job and is happy with $60.00 per hour, so what?
If he does a bad job, he's going to eventually lose the accounts anyway.
Can I get an Amen? or do I get a smack for saying that?