I am a small Local contractor I cant get My pricing Right!!!!!!?

Question

I am Having a real Hard Time Making Money and growing My Business in Home Improvemts. I Go in to Bid on a job and once I am in doing the work the customer always adds to the job extra Lights Doors walls etc. I tend to under estamate and spend extra Days on the job working for free. When I go in for a Quote They always Say I have a Few Contractors Giving Quotes So I tend to give Lower prices. I do great work But I cant seem to Make any Money at this Business. Any tips on Pricing Job and Handling Customers on Quotes ?

Answer 1

Pricing can be tricky. I am an independent consultant and took me a while to figure it out too.

This is how i do it: materials used + hourly rate. when giving out quotations, i let the client know, in writing ( and have the client sign a 1 page simple agreement for go-ahead) that it is an estimate and that it may be more but sometimes less than the total stated, it depends on the hours.

Never underprice your hours or material cost. Be very fair and honest on material costs (attach copies of receipts) and know your worth. Ask around other contractors for their hourly rate , compare your work with theirs and price accordingly.

Answer 2

Don't get caught in the price trap.



#1 - Print out a standard retail price list that you go by religiously. Build in enough room that you can give discounts that still leave your profit margins intact. Get something in return for any discounts you give them such as letters of recommendation and referrals or rights to use their photos and words in your future advertisements and sales materials. I often tell them that if they give me the names and numbers of friends or neighbors that they know are thinking of the same type of home improvement while I am there that day that I will give them $50 off per name and I get 5 or more names EACH time I sell a job using that discount. You will be surprised that when you SHOW the customer your retail price list that occasionally some will just say, "OK, lets do this".



#2 - Price and market yourself for higher end work and let the other guys go after the low ball bids. You go slowly broke trying to be the cheapest guy. Be the BEST guy and price yourself accordingly. You may lose a few jobs, but you will make GOOD profits on the jobs you do, your clients will be happier with the high quality products and services you provide and they will be more likely to recommend friends and neighbors than the guy who negotiated you down to the lowest price.



#3 If they say they are getting other bids, say "Great, I will come back when you are done getting bids and we can compare value for value on my bid at that time. When are you getting those other bids?". Then make sure you call them back BEFORE they are scheduled to get the last bid so they keep you in mind before making a decision. I always want to be the last one to bid if I have competition.



Check out a guy on eBay that sells a book for contractors called the "Painting Contractors Survival Kit". It will give you a ton of advice that will make you a lot of money even if you are not a painter. Also go to the http://www.painterschatroom.com/ you will find a lot of good ideas there. One guy that posted there all the time was great.



Also try Replacement Contractor Magazine.



Or shoot, you can just email me and as long as you are not in my market I will be glad to help you.

Answer 3

Put stuff in writing, and tell them it will be extra. Create a contract for work, so that everything is outlined on the price and work. This gives a better sense of direction, and also the customer. Once everything is in writing, then go for it, do the work, and if there are extras, get them to initial it. And don't give your work away, charge them. If it is something you don't want to do, charge them more. Make a spreadsheet invoice, and keep it running. Easy to say huh? Just take your time, you'll nail it down eventually.



It happens to all contractors, working for more, but with time, you'll learn from your mistakes.



Good Luck!

Answer 4

the above answers are correct....put everything you are bidding on in writing,be very specific and tell them that anything not on the list is considered a billable extra. If your work is good do not give lower prices...some people will pay for quality work....I ama painting contractor who specializes in the luxury home market ...and I do not lower my bids to get jobs....my bid is my bid ,if they dont want to pay it they can get somebody else...most of the time I get the job...you have to impart to the customer why toy might be higher than some others....usually telling them ,you do things the right and thourough way that others may not ...is enough to convince them that you will be worth the extra dollars. Don't sell yourself short and remember in contracting time is money and nothing is ever free...if i have to move a couch to paint the wall...they get charged for moving the furniture. good luck

Answer 5

Draw up a contract that clearly states all work that will be performed.Let the home owner know that any changes will be extra and also make a contract for the additional work.When a home owner wants things changed or added you are to make more money

Answer 6

I recommend that you get Home Decorating for Dummues. Or Home Improvements for Dummies. In the book, it tells you to call your local competition. Set up a business plan. Seasonal discounts and what your basic pricing should include.