Question for the new guys

oxfordlawn said:
Less than 2 years pressure washing experience here but I feel this is a rudimentary, condecending question and will lead to nothing but more aggravation. Does my 15 years as a business owner count for anything in your eyes or just the join date and post count? Is this what this forum is coming to?? I really hope not!
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Tom, this is actually a very good subject. Some guys will not listen to the guys that have seen others like dj come and go. Very few models like dj, you cannot run both ways.

Your either a premier contractor making ridiculous amounts on certain customers or you run a sensible business with reasonable honest prices.

The low guy never makes it. Running a high paying pressure washing is not out of question just there's no in between.
 
I get the debate, High Margin vs. Volume, and yes it makes sense, but you can't apply this to everyone DJ, heres why.

You can make this work if your business has other "Divisions", i.e. Lawn care, Advertising, and so forth. If you don't wash so what, you fall back on your other Businesses to supplement the lack of income. Then you can "Cherry Pick" high margin wash jobs. That's OK, and very smart business. But guys that just wash will have a hard time pulling this off, they have nothing to fall back on.

I guess We're somewhere in between, we get a decent price (Above Average) for our work and do a lot of it.
 
I think our roof cleaning market is so young here in Houston, we DO get the best of both worlds. Theres not much competition so the guys who are here get the volume AND the high prices. That will quickly change though and when it does Ill embrace the volume at lower pricing.
 
apple said:
Im guilty of swinging for the fences on a lot of the bids Ive done when I should probably be happy with a stand up double.
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We have all made the mistake Lou and DJ has made which ever side of the fence you sit on. Truthfully theres no right or wrong if your model is high end and pricing is going to be high. Just do not cry about not getting them when a medium guy bids and knocks you off that pedestal.

Scott mentioned instead of fighting he will embrace. He even realizes some people are just smarter than others. Market will dictate the prices. Not one individual contractor.

Believe me DJ and everyone else here has lost bids to lower and higher priced guys.
 
Guy Blackmon said:
I get the debate, High Margin vs. Volume, and yes it makes sense, but you can't apply this to everyone DJ, heres why.

You can make this work if your business has other "Divisions", i.e. Lawn care, Advertising, and so forth. If you don't wash so what, you fall back on your other Businesses to supplement the lack of income. Then you can "Cherry Pick" high margin wash jobs. That's OK, and very smart business. But guys that just wash will have a hard time pulling this off, they have nothing to fall back on.

I guess We're somewhere in between, we get a decent price (Above Average) for our work and do a lot of it.
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I believe your a higher low margin guy like me Guy. I do see a big gap between high and low. If your in the middle of that you will even be less profitable. FYI
 
Ron Musgraves said:
Tom, this is actually a very good subject. Some guys will not listen to the guys that have seen others like dj come and go. Very few models like dj, you cannot run both ways.

Your either a premier contractor making ridiculous amounts on certain customers or you run a sensible business with reasonable honest prices.

The low guy never makes it. Running a high paying pressure washing is not out of question just there's no in between.
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Which oddly enough quite often its the low guy that gets the bid in commercial :cool: It doesn't always happen that way but in my experience thats been the case.
 
Greg Rentschler said:
Which oddly enough quite often its the low guy that gets the bid in commercial :cool: It doesn't always happen that way but in my experience thats been the case.
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Gotcha, your low or my low?

I think you need to realize Greg the market in commercial is actually more established than you might realize.

You get jobs at your pricing for what ever the reasons. Trust me there are contractors as good as you and provide ok service to commercial clients. It may not be redcarpet service but they are not looking for that. This investment is just that and investment. its not there home so all the fluff isnt going to sell often. ( there are always exceptions)

You see in the commercial world you have the bidding often goes like this.

2 ,4 ,6, 12, I kept the number simple. If the bids are way off they will be more inclined to pick a middle person. How ever if the bids came in like this they will pick low 1.75 , 1.85 , 2
 
Exactly why my Grandpa said to create a business that will be either small scale or large scale because being in the middle is like being the middle child, you are forgotten and get lost in the cracks trying to make it.
 
I really don't wanna get into pricing put here goes....The difference between physically selling a job and doing it over the phone

You live in point A, you get a call to do a house in point B, You drive up there and back for the bid. Say 400.00 for a 2500sqft. It takes you 1.5 hrs(45 mins each way) to drive there and back. then it takes you another 1.5 hrs to drive there and back to clean it. Add another hr for cleaning. total 4 hrs....sound right? isnt that a 100.00 per hr.

Me I get a call sell it on the phone same job for 199.00 for anything 2000 or under add 50.00 for it being 2500sqft. my drive there to clean is 1.5 hrs total the day of the cleaning and 1 hr to clean .....who made more money? total hr. is 2.45/ 250 my rate is 102 an hr........ Of course if you have another job in the area it helps the higher priced job out or if you are in the area during the bid, but what happens if you are not ? .....it kindy evens that pricing way out. I know what my cost are by doing it over the phone. Commercial is different I do meet with the person in charge but in most cases the jobs are in the 1000's not 100's
 
Lou Zehnder said:
I really don't wanna get into pricing put here goes....The difference between physically selling a job and doing it over the phone

You live in point A, you get a call to do a house in point B, You drive up there and back for the bid. Say 400.00 for a 2500sqft. It takes you 1.5 hrs(45 mins each way) to drive there and back. then it takes you another 1.5 hrs to drive there and back to clean it. Add another hr for cleaning. total 4 hrs....sound right? isnt that a 100.00 per hr.

Me I get a call sell it on the phone same job for 199.00 for anything 2000 or under add 50.00 for it being 2500sqft. my drive there to clean is 1.5 hrs total the day of the cleaning and 1 hr to clean .....who made more money? total hr. is 2.45/ 250 my rate is 102 an hr........ Of course if you have another job in the area it helps the higher priced job out or if you are in the area during the bid, but what happens if you are not ? .....it kindy evens that pricing way out. I know what my cost are by doing it over the phone. Commercial is different I do meet with the person in charge but in most cases the jobs are in the 1000's not 100's
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Well said Lou !! Ditto !!
 
Ron Musgraves said:
We have all made the mistake Lou and DJ has made which ever side of the fence you sit on. Truthfully theres no right or wrong if your model is high end and pricing is going to be high. Just do not cry about not getting them when a medium guy bids and knocks you off that pedestal.

Scott mentioned instead of fighting he will embrace. He even realizes some people are just smarter than others. Market will dictate the prices. Not one individual contractor.

Believe me DJ and everyone else here has lost bids to lower and higher priced guys.
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We are still feeling ourselves out and learing who we are. Ive thought along the lines of what Scott said about having the volume and high price. Id like to think that is how we are. Weve averaged close to 600 a job this year but I only closed 56% of my leads. How much would I have needed to drop my price to raise that to 70%. and would how much more volume would I need to make it worth it.

Of course the x factor is how much better can I get at selling them?

The little bit of commercial we have done actually bumps up our average pretty good. All of it being larger jobs. Im focusing a lot of time right now on getting us more involved with commercial work.

I dont have the ba**s to up and drop our residential though so Im spending the rest of my time focusing on our plan for next year.

I love threads that make you think.
 
Lou Zehnder said:
I really don't wanna get into pricing put here goes....The difference between physically selling a job and doing it over the phone

You live in point A, you get a call to do a house in point B, You drive up there and back for the bid. Say 400.00 for a 2500sqft. It takes you 1.5 hrs(45 mins each way) to drive there and back. then it takes you another 1.5 hrs to drive there and back to clean it. Add another hr for cleaning. total 4 hrs....sound right? isnt that a 100.00 per hr.

Me I get a call sell it on the phone same job for 199.00 for anything 2000 or under add 50.00 for it being 2500sqft. my drive there to clean is 1.5 hrs total the day of the cleaning and 1 hr to clean .....who made more money? total hr. is 2.45/ 250 my rate is 102 an hr........ Of course if you have another job in the area it helps the higher priced job out or if you are in the area during the bid, but what happens if you are not ? .....it kindy evens that pricing way out. I know what my cost are by doing it over the phone. Commercial is different I do meet with the person in charge but in most cases the jobs are in the 1000's not 100's
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Great point Lou

I did a lot of driving last spring and summer pricing estimates. Normally its possible to schedule 8-10 a day so that cuts down on the cost some.

I tried to change it up a little this fall. I did most of my estimates online and saved myself a ton of money and time. We never got really busy so Its hard to say right now how well it will work but I plan to have a good system in place for this by the spring. If someone wants to meet I will but if I dont have to I wont.
 
Lou Zehnder said:
I really don't wanna get into pricing put here goes....The difference between physically selling a job and doing it over the phone

You live in point A, you get a call to do a house in point B, You drive up there and back for the bid. Say 400.00 for a 2500sqft. It takes you 1.5 hrs(45 mins each way) to drive there and back. then it takes you another 1.5 hrs to drive there and back to clean it. Add another hr for cleaning. total 4 hrs....sound right? isnt that a 100.00 per hr.

Me I get a call sell it on the phone same job for 199.00 for anything 2000 or under add 50.00 for it being 2500sqft. my drive there to clean is 1.5 hrs total the day of the cleaning and 1 hr to clean .....who made more money? total hr. is 2.45/ 250 my rate is 102 an hr........ Of course if you have another job in the area it helps the higher priced job out or if you are in the area during the bid, but what happens if you are not ? .....it kindy evens that pricing way out. I know what my cost are by doing it over the phone. Commercial is different I do meet with the person in charge but in most cases the jobs are in the 1000's not 100's
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Obviously, a blind man can see where a company that streamlines it's operations and increases it's production rates can price lower while enjoying more profit. However, it assumes that one company in fact is more efficient than the other.

All things equal though, the company that charges more, makes more. Equal amount of jobs would equal one company netting more. Volume pricing is fine if volume is there. What some fail to calculate, is the cost of acquiring the said volume. We can all agree, if you throw enough $$$ at it, you can make your phone ring off the hook. But if it costs you 50% of your gross to start acquiring the higher volume, then the volume price becomes a loss versus a higher margin, lower volume price. This points out the real key to making the volume model work. Lead generation at a low cost. Hence, the cold calling, door knocking guys being successful.
 
Lou Zehnder said:
I really don't wanna get into pricing put here goes....The difference between physically selling a job and doing it over the phone

You live in point A, you get a call to do a house in point B, You drive up there and back for the bid. Say 400.00 for a 2500sqft. It takes you 1.5 hrs(45 mins each way) to drive there and back. then it takes you another 1.5 hrs to drive there and back to clean it. Add another hr for cleaning. total 4 hrs....sound right? isnt that a 100.00 per hr.

Me I get a call sell it on the phone same job for 199.00 for anything 2000 or under add 50.00 for it being 2500sqft. my drive there to clean is 1.5 hrs total the day of the cleaning and 1 hr to clean .....who made more money? total hr. is 2.45/ 250 my rate is 102 an hr........ Of course if you have another job in the area it helps the higher priced job out or if you are in the area during the bid, but what happens if you are not ? .....it kindy evens that pricing way out. I know what my cost are by doing it over the phone. Commercial is different I do meet with the person in charge but in most cases the jobs are in the 1000's not 100's
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I can certainly appreciate the logic on phone sales Lou but the odds of closing a job by meeting the customer in person is MUCH higher for me personally. I would easily say 30% vs. 70%. Using that approach as a one man band may work fine but what happens when you grow your business and have employees to support? I make my money out there selling jobs, closing contracts and building relationships with new clients and you can't do that over the phone alone. At that stage will that $200 pay the bills? Will your close ratio provide enough work to keep you / your crews busy? All things to consider. I'm not a big fan of even giving a price out over the phone personally because it's my company that I'm selling... not so much the work that we do.

I couldn't even imagine bidding sight unseen. I've seen some downright nasty homes that absorb twice the labor of an average home that we do.
 
Greg, I understand your view, and it may be different in your area, but I have closed 80% of sales on the phone, and not because of low prices. You are limited as far as seasonal, so your prices would naturally be higher.

Our "Net" will be higher this year (As it was last year) because of phone sales. Of course this is out of the question for "Wood" restoration.
 
Greg Rentschler said:
I can certainly appreciate the logic on phone sales Lou but the odds of closing a job by meeting the customer in person is MUCH higher for me personally. I would easily say 30% vs. 70%. Using that approach as a one man band may work fine but what happens when you grow your business and have employees to support? I make my money out there selling jobs, closing contracts and building relationships with new clients and you can't do that over the phone alone. At that stage will that $200 pay the bills? Will your close ratio provide enough work to keep you / your crews busy? All things to consider. I'm not a big fan of even giving a price out over the phone personally because it's my company that I'm selling... not so much the work that we do.

I couldn't even imagine bidding sight unseen. I've seen some downright nasty homes that absorb twice the labor of an average home that we do.
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Greg,
Are you in the deck staining biz or pressure cleaning? Decks are a different animal all together and require onsite estimates.

I personally NEVER do onsite residential pressure cleaning estimates; I think it is a huge time and profit suck. I am very confident in my selling ability, I'm not a pressure washer, I am a professional sales person, and it’s what I do. I can outsell anyone in my area on the phone or in person and I guarantee that and can pretty much close every call. There are people that want to pay less than what we charge and they can call the next guy, but more times than not, if they say "I'm calling around for estimates", I go into selling mode, talk about our service and our process, the things that set us apart and generally close the job without them having to call for other estimates. I know my product, my process and know how to convey that in terms that are seen as a benefit to my customer. I don't need to shake a hand or wear a company logo'd shirt to do that.

There are some guys that drive to every estimate, if that was the case in my area I would never get out of the car, we have a long season here and lots of work. I can hardly keep with the phone calls as it is.

I also have intentionally cut my advertising expense this year by 75%. We have been around a long time and reap the rewards of repeat business and word of mouth. I also employ other styles of marketing that are very cost effective as well as utilize the internet for a strong market presence.

We all go to market in different ways and some may think my style is not the best; the beauty of it is you can do whatever you want. Live and Die by the sword
 
Ron Musgraves said:
Market will dictate the prices.
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BING-FREAKING-OOOOOO

Look at the news, Budget Cuts, Save Money, Bad Economy, Out Of Work, Low Prices Always.... These are words that are being absorbed by our customers everyday. But they will pay for "Quality Work at A Fair Price".

Sure I go for a "Home Run" every now and again, but in order to maintain the "High Margin, Low Volume" Business Plan, you've got to do 1 thing and do it Very Well...... Close The Sale, you've got to be a Very Good Salesman. And that's where a lot of Contractors fail at. Yes they are hard working and turn out great work, but can't sell for the life of them.
 
Mostly all wood restoration jobs, garage Cleaning and building cleaning jobs I go to the job site to scope it out. I meat with the managers/owners there when I can. All other jobs like any Vinyl house cleaning job besides having 15 yrs of repeat customers my wife does about all of it over the phone and they get a professional estimate with pictures in seconds via email. Got to love google and Bing and other net sites for pictures and measurement.

Specialty jobs though I always go.
 
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