Townhouses

And now it is obvious why I hate discussing pricing on the BBS's. If I have something I need to know, I call someone directly that seems to have a similar business model.
 
FCPWLLC said:
Under price it and there won't be any business the next year. Is there any such thing as "over pricing"?

In any business, there is a break-even price, then there is a profitable price, and then there is a prospering and growing the business price. Which would you like to do? Break-even, profit one cent/job, or prosper and grow your business? So you see there really isn't such a thing as over-pricing but there is such a thing as making more money.

Also, just because work is slow, it isn't a reason to commit suicide. Which is what is done if pricing work soley to land the job without any thought of profitability. The saddest part is that lowering a price to secure a job isn't even a 100% guarantee of getting the job. The customer may hire the higher priced guy anyhow. So all that lowering price does is to make ya go broke faster or not get the work at all.

Just something to think about.
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That's what's up!
 
Scott Stone said:
And now it is obvious why I hate discussing pricing on the BBS's. If I have something I need to know, I call someone directly that seems to have a similar business model.
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Scott, on the HVAC-Talk board there is a Pro's section that you are only allowed in if you have been verified as a legitimate HVAC contractor. I barely got in because I'm not required in my state to be licensed by the contractors board for what I do. But they did check my local license and called all my numbers and called me to verify who I was.

Why can't we make a pro section where prices can be discussed without being broadcast?

Just a thought.
 
pressurepros said:
Mike, where does the 6,000 s/f come into play? I would guess those units at about 1600 s/f. Is the 6000 for each block?

William keeps forgetting to mention he has been in business for ten+ years and that he hates to sell (and has eguys that have been working for him for awhile and this is all they do everyday). You can upsell scrubbing the gutters and throw in a wetwax and wash them for $90 apiece. I would bid at $120 up here.

A more realistic time is 4 days for a newer guy without an experienced labor force.
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We have done townhomes here (Florida) for about the same rate "per door". At least 120 per X 52 = 6240. 2 guy team would take 2 days. X-jet or similar and keep the glass and plants wet.

Kemp
 
Too high of a price is valid. Using generic numbers here: You are bidding on a house that the owner is willing to pay $ 200 tops for the job. Being the great salesperson that you strive to be, your normal price for the job would be $ 250, so you submit that price and your competitor prices the job at $ 200. Your total cost of the entire job is $ 65. The job will take 1 hour 15 minutes with drive , set up, cleaning, tear down, and drive time again.

When you run into people that will not budge on their price (as in the above illustration) what would be the price that is too high for this job?
 
Jonathan Ellis said:
Too high of a price is valid. Using generic numbers here: You are bidding on a house that the owner is willing to pay $ 200 tops for the job. Being the great salesperson that you strive to be, your normal price for the job would be $ 250, so you submit that price and your competitor prices the job at $ 200. Your total cost of the entire job is $ 65. The job will take 1 hour 15 minutes with drive , set up, cleaning, tear down, and drive time again.

When you run into people that will not budge on their price (as in the above illustration) what would be the price that is too high for this job?
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What is it too high compared to? The hack doing it for $100? The problem is that customers dont tell us "my highest price would be ...." because they dont know what a service should cost. They only base it on what other contractors charge. I used to sell cars and that was one of our sales tactics, a customer would say "ooh thats too high!" "well compared to what?" What you thought it might cost? I can get you a used broken one for alot cheaper, but for this high quality car, this is the price.

When we set prices that is based on what we know jobs cost and the labor involved. using your numbers if you charged $200 and used $65 in supplies that leaves $135 gross profit. Take out taxes and labor you are looking at $60-$70 max. at $250 your gross profit come out to $120 You just essentially doubled your profit for the same day. I got to tell you, im not leaving the house for $60. We dont budge our prices except on large jobs. We may go from .15 per square foot to .13 for 20,000sqft or more but thats it.
 
Again Scott, they are generic numbers I used and the $ 65 in the illustration included everything, gas, chem, wear and tear, labor, taxes, insurance, EVERYTHING. This is just an example.

By the way, I will get the information to you soon, I just got back from Bama and will be tied up for the week.
 
Jonathan Ellis said:
Again Scott, they are generic numbers I used and the $ 65 in the illustration included everything, gas, chem, wear and tear, labor, taxes, insurance, EVERYTHING. This is just an example.

By the way, I will get the information to you soon, I just got back from Bama and will be tied up for the week.
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I know and I was using the generic numbers too on purpose. What informtation?
 
Without talking about specific pricing, because that varies by region drastically, how I figure out a complex is as simple as it gets. Guage who you are selling the job to (#1), figure a normal rate for the same job for your market area (#2) multiply the number of units by the amount to complete the job and get a ball park number(#3) Figure how badly you want the work and what type of discount you are willing to give for the volume of work afforded at that particular job(#4). Then look for time consuming or problematic areas and add or subtract based upon that(#5). This allows a basic overview of the job in your area by what it goes for not by what others charge in ther service area. This is not rocket science by any means and you need to do your best to "sell" these jobs. Better to spend the time and get 54 jobs than spend time and get a few. Just my $0.02. Best of Luck, Mike.

p.s. I am glad that I sell jobs in Northern New Jersey and not North Carolina, I won't get out of bed for $200 anymore.:eek:
 
Jonathan Ellis said:
Too high of a price is valid. Using generic numbers here: You are bidding on a house that the owner is willing to pay $ 200 tops for the job. Being the great salesperson that you strive to be, your normal price for the job would be $ 250, so you submit that price and your competitor prices the job at $ 200. Your total cost of the entire job is $ 65. The job will take 1 hour 15 minutes with drive , set up, cleaning, tear down, and drive time again.

When you run into people that will not budge on their price (as in the above illustration) what would be the price that is too high for this job?
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I don't care what the home owner is willing to pay. Some only want to pay $50 for said job... Do we bend for them too. And when our utility bill comes in, do we send only 1/4th payment and a note that says my customer only wanted to pay $50?

If I can't close the prospect at my rates (Which are not just pulled out of my a$$, they are calculated based on sound business facts and projections) then I move on. The next prospect will pay what we need.

The thing I keep seeing most on these boards is that folks are hungry for work. Seems the phone isn't ringing enough. I think that is where guys start lowering prices in an attempt to close a prospect... They don't have another prospect lined up. My answer to that is to spend the extra time marketing to get more prospects versus doing lower priced jobs. Sure, you might close a customer on a lower price, but you lose more work by wasting time doing an unprofitable job when you could be marketing or trying to close a profit making lead.

Oh well, seems I am as usual a minority again trying to help folks that want to know how to price.

There is no right answer any of us can give in dollar amounts to another contractor. This is why I try to point out that pricing should be based on business fundamentals and not "I'm starving and really need the work" Bending to customer perception or "going rates in area" will only hurt a business. You just can't throw caution to the wind and dismiss your costs, profit goals etc... just to land a job.

In Mr Ellis' example... $200 may very well be profitable and support growth in a company. However, if that company has different production rates, higher salry reqyuirements, shorter work season, less population etc, it might be a profit eating bid. So just because a partimer down the street bid $200 and homeowner wants you to match the price, you don't have to. You sell value or move on to next prospect. NONE of us can compete with a DIY'er HO or a weekend warrior. So why allow a prospect that gets info from Ask the Builer Tim, dictate to us whether our companies will prosper this year?
 
I spoke to Mike yesterday and there are 54 BUILDINGS with 3 - 4 units (or "doors" as some call them) in each building. the BUILDING is a total of around 6k sq ft. If you all can do those for $55 then I want to see your business plan so i can copy your model because if your making good money doing them for that i think you found your niche.

My guess is that your not making GOOD money you just making enough to get by till the next job. if that's the case no thanks I stick to my close to $200 price per unit.
 
So DJ your $600 to $800 a building vs. $165 to $220. I like your pricing better.

The main question is will that market handle the price of $600 to $800.

Here it'll be around $300 to $400.
(If your lucky)
 
I think there was some confusion regarding units/doors and buildings. i am sure no one would clean a "building" for $55 I think he meant $55 per unit/door.Here in FL pricing is much lower than most parts of the country. I just lost a bid for 220 units/doors. I bid $60 a unit= $13,200 the winning bid was $45 a unit = $9,900 I love FL, I hate the low prices!!
 
mike barrett said:
I think there was some confusion regarding units/doors and buildings. i am sure no one would clean a "building" for $55 I think he meant $55 per unit/door.Here in FL pricing is much lower than most parts of the country. I just lost a bid for 220 units/doors. I bid $60 a unit= $13,200 the winning bid was $45 a unit = $9,900 I love FL, I hate the low prices!!
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How long would that have taken you?
 
Vinyl is the fastest easiest work you can do, you should be able to get about $300.00 per unit. Thats good money considering it should only take you 45min per unit to wash.
 
The Cleaner said:
Vinyl is the fastest easiest work you can do, you should be able to get about $300.00 per unit. Thats good money considering it should only take you 45min per unit to wash.
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Hey Nick can you clarify your definition of a unit? When reading the entire string, "Unit" has been used as "each unit has 4 homes" and "there are 4 units per building"

Are saying $300 per 6000sqft building or 300 per door? Im assuming per building because per door would be $64,000. I just dont want any confusion.
 
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