What type of contractor are You??????

Ron Musgraves

Ron Musgraves

Exterior Restoration Specialist
Staff member
What type of contractor are You??????

I answered this post below on Delco’s old BBS, it really got me thinking again about the Difference in every contractors Goals. Do we despise weekend guys as full timers? I don’t… are we confusing weekend people as low-ballers? This thread is not to drag out this discussion about low-baller but to better understand the type of contractor you might be or want to be. Many different types of people in the world and many different type of customers.

So what type do you want to BE?????



This is a thread I posted on delco that raised this thought. The Link:

http://www.dcs1.com/dcs1boards/messages/detail.cfm?ID=33317&Board_ID=10

I have a different View point of what a low baller is. Your right about the rocket Science thing. My definition if a low baller is not a guy who is trying to make extra money on the weekends. Its not the guy with a pressure washer in the back of his car. These are just in most cases hard working folks that do not have capital or choose not to have the expenses I have chosen.

Low-baller (definition By Ron Musgraves) this is a person that runs his or her jobs at a loss. Someone that doesn’t know or understand there cost to operate. They repeatedly take job after job making no money until there 401K or loan money runs out. ( these people actually pay the customer to pressure wash)


Smart Business : (definition By Ron Musgraves) Wal-mart they have figured a formula for making tons of profit and curving expenses to maximize there profit margins. Wal-mart is not a low-baller by my standards just a superior concept of the free market done correctly. We all try to cut our expenses to raise profits without cutting into the profit. that’s should be everyone’s goals.


Lets brake down the retail industry and compare to the different type of pressure washers.

K-mart & Wal-mart,,, two similar stores and primarily the same customer base. The S-10 Truck

Target : similar to wal-mart just with a few different things and fancier stores. Draws a different type of clientele. When people shop at target they are expecting a different type of product. And even when it’s the same products they are willing to pay a little more because the environment is different. This might be the full size Chevy ½ ton. No leather or any extras just a little nicer.

Dillard’s & Macys ,,, these stores are fancy and have expensive items that wal-mart & Target don’t have. The people that shop here are looking for quality things and are willing to pay more for even things that are the same because the environment is much nicer. The Mercedes Benz of retail.



We as contractor in the industry have these same choices in how we run our businesses. The question you need to ask is what type of contractor do I want to be. Are you a Wal Mart or Macy’s or something in between. As long as you make money I have no objection to what type of cleaner you want to be. All different types are needed in this industry. I myself am probably a target store. Still want to deal with the masses and keep my quality up but don’t need to drive around in a Mercedes cleaning concrete. I also do not want to work out of my trunk.

Because you run a weekend or outfit and don’t have uniforms and maybe use chemicals from K-mart. This doesn’t bother me. Your not dealing with my customers. My customers know I’ve been around and they know I’ll be there next year if they need me and the year after that and again and again and again. My customer will spend more money for the security that if they need me during the week I’ll be there. They realize that I will respond 364 days a years 24 hours a day. The understand that a neatly shaven individual uniformed with show up to take care of any problems. They understand that my employees are well trained and back ground checks are done. They have my insurance and have run credit checks to know I’m stable. I have chosen to be this type of contractor.


My point is that we have all different contractor for all different types of customers. There’s a need for all types of contractors because the need to fill is present for so many types of customers.



LOW-Ballers-- two things eventually happen, 1. The contractors folds after his cash runs out. 2. He learns the hard way what it really takes to make a profit and increases his prices to a profitable situation.



Remember my definition of a low-baller is not a smart business man that figure how to run leaner than myself. I envy this man for being smarter than I and I will figure out what he or she is doing .
 
Ron you know many consider the week-end warrior a low baller but as you said this is not a knock down drag it out fight.

I see a difference in the two, one might be perfectly legal and the other could care less about anyone but himself.

To me a low baller is not legal since most don't have all that owning a business requires.

Insurance
Bus. licenses
Permits
Knowing the laws and following them.

It is not the type of truck that makes one a Pro as that one person seems to imply but it is how he/she runs the business.

This talk about low balling will never stop and it gets to be old news as soon as any of us see the word LOWBALL as the subject title.

What about companies that follow others around? Not going to mention names but there are a couple that do that on a national level.

Would you consider that ethical?

How many of you have been followed and lost accounts to those companies?
 
No, you missed it Jon. My definition is exact. your talking about ethics. Mine is simply the guy with the problem.


your right the truck doesnt make the contractor. Its part of his image. thats it and nothing more.

Keep this simple and tell us what you are Jon, thats all. are you a Walmart Taget or Macy's? are yoe less than them or are you more.

Certainly Walmart is not a bottom of the barrel and macy's is not one the top. these where given so guys can understand a little more, Plus that was for another post. DID you read that Jon?

Gotta run, this aint about the low-baller, it got me thinking are we really talking about the Low-baller.

My point is Jon just took the bait Hook line and sinker. He's talking about ethics. Guys that follow him. He thinks that the truck you drive wont make a difference about your image to the customer? Sometimes it wont but in others sistuations it will.

My trucks are old. i keep them Clean and try to maintain a good image. Its Not easy....
 
Ron does it matter what type of conctrator someone is? does it really matter? Ethics, that is what this whole thing is about as I see it. Some consider all those that have very low prices not to have any ethics. Do you thnk Sam Walton's 3 kids do not run Walmart as Sam did, they care about one thing, how much can they take out of it. They preach to their employees KEEP IT CLEAN AT ALL COST, yet when it comes to paying others like us pressure washers they chisel for low prices.

Walmart
Target
Macy's
Costco
PiggyWiggly

All have their place, some are good, some not so good, some buy top, middle or lower end products, some carry a bit of each.

Some claim to "buy America" yet buy imports, Walmart is big on that.

No Ron I did not miss the point, I did not take the bait as you say.

There is a place for all LEGAL businesses here, I know a guy who does homes only at $30 an hour and it takes him between 2 and 3 hours to do a complete house and it is done right. I have used him before, I will bid the job, if I win it I sub it out and bill the customer my price and make money off his lower cost.

Why do I do that, because I don't do homes and he does not do flat work.

Now about the truck, uniform etc. if I were a business owner asking for bids to clean my store front and had 3 companies show up, one in an old jalopy, one in a fairly good condition and clean and one in a fairly new truck I would dismiss that old jalopy and talk with the other two.

Now I can hear you asking WHY, ok why is because of how I would precieve each of them. That old jalopy would to me do sloppy work, might not be true but I feel anyone who takes care of their business vehicle will also take care and pride in their work.

Does it have to have a company name on it, NO, I did for 3 years and got ONE call in all that time, my new truck will not have a name on it.

Ron says and I quote:

Low-baller (definition By Ron Musgraves) this is a person that runs his or her jobs at a loss. Someone that doesn’t know or understand there cost to operate. They repeatedly take job after job making no money until there 401K or loan money runs out. ( these people actually pay the customer to pressure wash)
-----------------

Would Lance Winslow be in the above list, he has low prices yet is not running out of his 401K, he takes job after job and makes money doing it.

I wonder if Lance would reply to this part of Ron's definition of a low baller.

Do you still think I am off base, if so I will keep my opinions to myself from now on.
 
Jon , great example of a low-baller and what will eventfully happen.

Great point, Lance Winslow, carwash guys (gone they don’t exist anymore) thanks… Its happened one of my two things that happen too Law-ballers. He went out of business. Granted he has started up again, is he still charging ridiculous prices? And even when he was. Did he use his money or the many franchisers that lost thousands.


My post intentions are not about Low-ballers. We have focused on this subject enough. The reason I’m trying to clear the air hear is that I believe most, not all are just getting beat.

I will not do a job and pay the customer, I try to make profit at every single Job. I don’t drive a rig with diamonds inlaid in the Bumpers. On the other side I’m not working out of a ford Pinto. I will take a photo of that guy next time I see him. I normally wouldn’t do anything like that but this guy wears flip flops and no shirt and cutoffs while cleaning commercial accounts out of his 1972 ford Pinto. ( that really doesn’t matter to me because that’s not my customer and never would be. This Customer shops at Flea markets only and buy used things. (I’m not saying flea markets are bad but I ‘m not that type of customer either. )


Jon, you would not use the guy in the old jalopy and I would not either. Maybe Bigboy or someone else Might. Maybe Lots of guys hear drive old jalopy’s. that’s ok, by my standards that doesn’t make them low-ballers.

JON< jon JON ,,,, I have seen many contractors that are perfectly legal that are Low-ballers. I have a guy right now that has retired from his Job in my area. Wait till you see his rig, I have a picture of his rig in a brochure he gave me. This guy is super professional, retired software designer. The truck is a brand new 24 foot Isuzu flat bed. Not one but three New landa’s. state of the art reclamation system. Altogether about 85,000 to 125,000 depending on where he shopped. He is currently paying customers to wash. Spending three hours with two men on a job I know he charging 45.00. My point is that I don’t think the Low-ballers are the guy that work out there trunks.

Often the guy that cant rub two nickels together with the home depot unit needs to make money right now. This guys if he is not making money wont last two weeks. My software designer is probably got another 200,000 in the bank and some other investments. He will run for months before he realizes that he is not making it. Often pride can get into the psiture and they blow the whole thing and usually the one of two things happen. They start charging what they should have or they get a real job.


Enough with the low-baller,,,,


I’m trying to make everyone think about the market your going after, so what is your market. If you don’t want to answer that’s ok. I just want you to think.

Just for fun, Scott mention he knew a deck guy in phoenix, I said what? There aint no decks in phx. I found out that there is decks in phx. One contractor listed in the yellow pages. He services the Rich & famous. We have a few multimillion dollar houses here in the valley with quite a few wood decks as it turns out. Just to let you know this deck guy lives in there neighborhood. $$$$$


So I ask are we all low-baller? Are we all charging enough.

1. why do people buy the same products at target and pay more when they can get them at walmart cheaper.
2. why do we stop at 7-11 and pay double for a gallon of milk.
3. Some of us spend three times the money on shoes. (name brands)

I know the answer and I don’t want you to reply, just think about the Big picture. This Low-balling is Bullshit.

Find your market and go after it. Win win win win win………..
 
Ron let me answer a couple of your questions for you.
--------------
Why does someone pay double at 7-11 for milk, most cases because they ran out and only need that milk so why drive across town to the market when for a few pennies more and less time just go to your local 7-11.
--------------

Why pay more at Target then buying the same product from Walmart, it is not always as it seems. Many a manufacturer makes several grades of the look alike same product, can you tell the difference?

Example Carpets, each one you see has 3 grades from, cheap, middle to top of line. If you doubt me go talk to any carpet store and ask them to show you their sample cart and ask the them that question, it is how that carpet is weaved together, tighter weaves cost more as there is more to the carpet.
---------------

Lance is indeed still around and still selling franchises, just using different names is all.

Yes it was not his money but the franchises money so your right, he still made his and they lost their homes, cars and more when they end up folding.
-----------------

Shoes, well now that one is easy, like the carpet reply, quality and how it is really made counts. Yes I buy one brand and one style from that brand for tennis shoes.

----------------


My market area, target accounts etc. I know exactly what it is and I am going after it. I skip all other types of business so I am right on the mark there.

Nope will not broadcast what it is, sorry but I need to protect my investment and accounts.

Giving the customer money, only if you consider a demo giving away the money, like others here I am in this for a profit and I don't under bid jobs. I do my math, if I feel I cannot make a profit I won't take the job, I bid according to what I know it is worth.

Again take Walmart, they pay about $125.00 for twice a month cleaning, and not per cleaning, that is the monthly amount they pay. I simply tell them if they are happy with the work at that price stay with that company as I cannot do quality work for free.

Then in the same breath I offer to do a demo the day after their current pressure washer has done his job and let him compare the work.

Ron we are in many ways on the same level, biggest difference is I am not a broker but I am a working owner like most here.

Nothing wrong with being the broker though.

Jon
 
Mel we never did have them but I believe there are still out there in the South, if not then to bad as I heard they were one of the best in their day.

Anyone know if they are still in business?
 
The "Pig" lives on

You're absolutely right about Piggly Wiggly, Jon. They are alive and well in the South. I've got a couple just a few miles from where I live in W. TN.

David Williams
 
A fascinating topic.
A local car dealer says that he does not fear his competition that knows waht it takes to make a living. He fears the guy that does not know what it takes, and the costs involved.
I think that is Ron's point. He isn't afraid of the guy that is running around in a 72 Pinto. That guy is someone that is making a profit, and understands that he has to make money. He fears the guy that does not understand the cost of doing business, because he is willing to "pay to play" so to speak. So that whenever he is doing a job it is not profitable for him. I remember my first fleet washing job. I was so thrilled because I busted my tail for four hours, and made $200. I did not have a clue. I wasn't using soap, because I thought the pressure would take care of it. The customer was happy and I can say in retrospect that the quality just was not there. Fortunately, he was one of those few and far between guys that understood starting out, and took me uynder his wing. I think that Ron would have been scared of me then. Now, I think that I have a better grasp on the washing gig, and I can educate my customer on what needs to be done in a particular situation. That way, Ron is at least competing on a levle playing field, if we were in the same part of pressure washing.
Al though carpet manufacturers may make different grades of carpet, I don't think that they try to pass it off as a higher quality. Now the carpet salesman might, but that is a different rant.
I am pretty sure that a company such as Proctor and Gamble would not manufacture different types of Tide, or Clorox, or whatever. There is one standard and that is what they manufacture. They would not want to taint their good name by manufacturing a sub par product, anymore than Ron or Jon would want to perform substandard work.

There are people that will not use me because of my equipment. They automatically assume that I am too high. They will gladly pay more to get sub stndard work, because the vendor looks like he is strugging. There are others that would prefer to use me because it appears taht I am successful at what I do, and then are pleasantly surprised because my prices are really competitive. That is the customer that I am looking for. If someone does comment on my truck and ask if they are paying for it, The immediate answer is, "No, I am giving you a deal. My other customers are paying for it."

Just a few incoherent thoughts.

Scott
 
P&G does make different grades of products to address price ranges of their customers. Luv’s and Pampers for example – can be manufactured on the same production lines, but have differences to justify different prices and customer markets.
They have some sneakier ways of conducting business though – look at toilet tissue and paper towels: They manipulate sheet counts, roll diameters, paper thickness (fluff) and sheet lengths.
Tip: always look at square feet when comparing prices.

Nikon and Cannon for a long time made most of the glass camera optics out of Japan. They put their 1st level optics in their own equipment then sold second and 3rd quality to other companies that sold these for a lower price. Then you also have optical coatings that impact the cost, but you need to be a coating expert to understand their quality vs. cost.

Clothing manufacturers also play the same game – different quality materials, different stitching,etc.. I believe laws require tagging information to divulge these types of information, but most people do not check or know what most of it means.

GM is another good example – look at Pontiac, Chevrolet, Oldsmobile – lot of these cars use the same body parts, interior, engine parts but the Olds cars always demanded a higher price than the other two (Create a need and fill it.).

Just thought of another good example (if anyone is interested): Blockbuster and Hollywood Videos both have thrown such large chunks of money at their business that the small owners could not compete. (They spend about $35K a month in new releases. How many mom and pop stores could compete with that)

Well, it goes on and on – some are better than others at concealing differences (within the law) from the consumer. Most of it boils down to whatever the market bears and how much competition you have. Different markets but similar principles. Big difference in all the above is that most of these companies know what their costs are and how much profit they have to make to survive. Even at that, these companies are at the same risk for competition to put each other out of business.

The only way to avoid competition is to develop new products, franchise it and sell it all. Then move on to something else.



Someone was talking about having been followed around by their competition to steal their business...
Some years ago I worked for an optical manufacturer and we went to Japan to sell our product (we had a new technology and product). In Japan (at that time) it was understood by all Japanese companies that they will make every effort to spy on each other to steal the others' business. They told us this also. Since it was common practice for them, they gave us heads up.
Two months later we caught two Japanese man trying to get access to our development and production facilities. They claimed that the owner had invited them to look around with cameras and tape measures. Not so!


Regards,
 
A different quality product under a different brand name is not what I was talking about. I was talking about a different product under the same brand name/packaging according to the store that they were going to.

Japanese law and ethics is totally different from ours, and it is interesting the things that are permitted in their country.

Scott
 
I understood what you were talking about, I was trying to share some of the insight I had been exposed to thru my career.
Some things are obviously connected some are not so obvious but have the same impact.

There are companies that package same product line, different quality levels in same/very similar packaging. By law (in the US) they are not allowed to mis-label. Are the labels obvious and large enough for everyone? In most cases you have to look very closely on the material discription to know the quality difference. Sheets and towels for example are packaged identically but look at material thickness (20# vs. 30# vs. 40#). The Wal-Marts / K-Marts sell the lighter weight materials and Sears may sell the same brand but heavier weight material product. Most carry a range suited for their market. Lot of cutomers are thinking they are buying the exact same product for less (mis-informed). Others just may not have the money to pay for the better quality product.

Obviously it would not be to any companies benefit to sell the same quality product to different retailers at different prices (other than qty. discounts). It would hurt more then benefit.
There already is a large battle for retailer shelf space. If you don't cut it (sales or quality) there is a line to take your place on the shelf.

I don't know if you remember the Shell Oil advertising that most people were exposed to in the 70's-80's. They heavily marketed Shell with "Platformate". That was their seller and marketing strategy for brand recognition. If you know the chemical contents of "Platformate", you would have known that most if not all gasolines (of similar grade) contained the contents of "Platformate". In otherwords, you were buying the same product content with a different name - "Platformate". Slight of hand.

I've sold a lot of different things and have seen many different levels of educated/un-educated customers. Sometimes the smartest people are the most un-educated customers and vise versa.

Most large companies play the marketing game one way or another. They push the legal envelope. Ralph Nader made a career from it by understanding the ins-outs of marketing. I also gained a lot of insight by being involved in large corporate engineering, marketing and sales.

(Not trying to argue, just share my perspectives.)

Regards,
 
Scott concerning the 3 different grades of carpet, your right it would not be the manufacturers who would mislead people but they don't sell directly to us, the stores are the ones and unless people ask questions the consumer might never know.

When we were looking at tile and carpets we asked, sure I already knew from the same thing being done in the uniform business.

Another way to tell is ask the price difference on the same 3 colors on a sample board, the higher the cost the better it is.

The problem develops when it is brought to the customers home to be installed, how would the customer truly know which one it is? Yes you have to trust the company you're buying from but still there are those that bait and switch.

Could the same be said of the many chemicals out there with private lables? Is one really that much better then the next and who really makes them? I have tried many and found some to be better then others yet I am finding that the name brand is best of all of them.

The last paragraph is not intended to insult or put down any distributor or dealer, only my opinions from using the products.

Jon
 
Low Ballers

Here in Florida most all the pressure washers are low ballers in my area. Most keep the same prices within customers price reach. True your quality and workmanship should be the best you can provide. That way you leave knowing you will be called back again. We only do homes so we know what to expect and what prices to charge. Most of the houses are done twice a year so they do not take long with a pressure washer to clean off. Even though the prices would be low in your area in Central Florida it is average. This is a retiree location. Not that they do not have money but they hate to part with it. The other day a customer thought they would even get a driveway included with the same price as the house wash. Said where he came from they did. If you believe that.
We also do Carpet Cleaning with the Host Dry Carpet Machine. It helps to know you can also do something else too. Most of the people in Florida do not want there carpets wet. On the days that it is hot great to be working inside and still be making money. The professional carpet cleaners look down on the Dry Method since they use steam. In every business there is always competition. We still have the same customers that call us every year to do their carpets.

Buy our pressure washing supplies in Home Depot but we are not as profitable as they are.

Buy our Carpet Cleaning supplies from a carpet cleaning supplier that we know only sells what works for our system.

Guess he would be just a MOM & POP Store because with out us helping a business is too much aggrevation for one person to run on a daily basis.

Jon I agree with you ethics is important too. We always try not to cheat anyone always give more than less. They appreciate the extra care and attention even if he is not in suit , just wearing
shorts and a tank top.

Like Ron said it is up to the individual if he wants to succeed. Must know what they are spending to run the business & what they are bringing in. Have to live within your means to make it.

Anna:)
 
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