lowballing

[FCPWLLC]

whats it cost you an hour to do the job? maybe you coulda negotiated 75$-65$. how do you know he is illegal? maybe underbid his window work with a package deal?

The window cleaner is legal... I was commenting on the comment of not being able to sell. Most PM's want low bid regardless of quality or professionalism or even legality. This is why I normally can't compete on price with commercial in my area. No way I could stay in business for the same $25/hr some guys are charging.

What's an hour cost me? AN HOUR! It takes roughly an hour to do a $250 vinyl house wash. Why would I sell that same HOUR for $65-$75 to do flatwork? What most fail to realize about selling is this.... MY cost doesn't matter. It should be sold for what it is worth for the consumer. If it would cost a customer a whole weekend cleaning his vinyl home, then it is probably worth the $250 to have someone else do it for him.

Can you operate your company for $25/hr? Legally? One employee @ $16/hr costs me close to $20/hr after matching FICA, Medicare, paying Unemployment insurance, Workers Comp, Payroll Processing etc...

The only point I am trying to make with Ron is that the model ONLY works if you can get the volume. I say that getting the volume is difficult if you can't even come close with bidding when bidding against dudes that don't even know what Matching FICA means.

Even Ron wouldn't do that Q'doba for less than a C-note. I was just using this as one of many examples as to verify that commercial and PM's usually ONLY want Low bid.

 

[MIKE FP]

The window cleaner is legal... I was commenting on the comment of not being able to sell. Most PM's want low bid regardless of quality or professionalism or even legality. This is why I normally can't compete on price with commercial in my area. No way I could stay in business for the same $25/hr some guys are charging.

What's an hour cost me? AN HOUR! It takes roughly an hour to do a $250 vinyl house wash. Why would I sell that same HOUR for $65-$75 to do flatwork? What most fail to realize about selling is this.... MY cost doesn't matter. It should be sold for what it is worth for the consumer. If it would cost a customer a whole weekend cleaning his vinyl home, then it is probably worth the $250 to have someone else do it for him.

Can you operate your company for $25/hr? Legally? One employee @ $16/hr costs me close to $20/hr after matching FICA, Medicare, paying Unemployment insurance, Workers Comp, Payroll Processing etc...

The only point I am trying to make with Ron is that the model ONLY works if you can get the volume. I say that getting the volume is difficult if you can't even come close with bidding when bidding against dudes that don't even know what Matching FICA means.

Even Ron wouldn't do that Q'doba for less than a C-note. I was just using this as one of many examples as to verify that commercial and PM's usually ONLY want Low bid.

i agree! unless they may have had a bad experince in the past with a lowballer, that may change there train of thought.

 

[MIKE FP]

I just recently lost Q'doba here to a window cleaner for half my bid and he takes twice the time to do half the quality. Am I suppose to lower my bid to the same $50? I can't. Yes, the window cleaner spends 2 hours making $50!! I thought I was close to losing money when I was doing it for $100 in a hour.

Reality..... PM's want the lowest price.

I can sell with the best... However, I CAN'T match prices with guys that are operating illegally. What has that got to do with not knowing how to sell?

Not saying that there's no money in commercial.... just saying that it is a high volume game and low margins. And, yes, most PM's want the lowest bid.

i spoke to a property manager today who contacted me about one month ago to bid on a strip mall. i didnt get the job and she told me they get bids from 3 differnt contractors. of course they pick the lowest of the three. commercial work is kind of discouraging but you gotta keep on it. so, you are 100% right, pm's want the lowest price.

 

[DOG]

why not try and figure out giving them what they want and still profiting? thats my point in this thread.. ok Michael the window washer did a crappier job than you could do in an hour right? maybe you could do the same job in half an hour? counter the window washers underbid @$65 and now your at $130 an hour? i would undercut the window washers window work with a bundle package.

 

[mario]

ok well then how about this for an ad? 99.00 for a quickie, 20 cents a sq ft for full service. just got off the craigs erotic list.

 

[mario]

hows this for an ad? 99.00 for a quickie, 20 cents a sq.ft. for full service. i got that idea from a escort service ad. lol. im beginning to think theres a market for both. back in the days when i was an auto painter, you could get a nice laquer job from us for 350- 400 or you could go to Earl Schribe for 29.95.depends on what you wanna do i guess, Earl Schribe died rich and so did my boss.

 

[mario]

ok heres my new ad, 99.00 for a quickie, 20 cents a sq ft for full service. saw that in a escort ad.lol. im believe there is a market for both. when i was an auto painter in the 70's you could get a nice laquer job from us for 350- 400 bucks. Earl Schribe was painting cars for 29.95. both him and my boss died very rich men. opps sent this twice from 2 different puters

 

[RAC]

no one else has an opinion of the theoretical lowball model i came up with?

I have an opinion.

The difference in price may be due to Low Balling from people that are either part-time or illegitimate and they will probably be out of business in less than six months; But it might also be due to a professional company that has a better process, better equipment, and more than one person on the job site – doing more jobs in a day, week, or month than any one or two-man operation could possibly deal with.

Example:
We have a company that just did a job in SW FLA & completed about 260 roofs in less than 5 days. They had 2 crews - 2 men on each. They have some of the best equipment money can buy for what we do. Even if they charged ½ of what most roof cleaning companies in the area do – they would still have made a large amount of ACTUAL CASH coming through the door. Profit Margins are less, without a doubt – but Profit Margins don’t mean anything compared to ACTUAL CASH coming through the door.

Also, these guys are Professional Painters – so they do the same for houses as well. They regularly go into communities & “Prep for Paint” - 500-600 houses at a time, and they are guaranteeing their work for 7-10 years. So the quality of the work they do in cleaning the house prior to paint is essential to their success – and they are coming up on 20 years in business. They also have 18 crews working throughout Florida.

From a practical standpoint, I know that when you put 4 guys on a house that know what they are doing, the job can be done in minutes – usually less than 15-20. The idea of spending 2-3 hours on a house, and being profitable, is not even a possibility.

Once again, the price difference may be due to Low Balling – but there are other factors that might be in play. It might be a good idea for the people reading these threads to understand that.

 

[DOG]

Damn good post John!
i think for next year i will play around with the rock bottom price. use 2X 3000 psi @ 3+ gpm's and one lil 2200psi for xjetting
3 guys
and schedule 10+ jobs per day i would rather learn and adapt to this model earlier then later. tell us more about the roof cleaning operation did they flood the market with "lowball" ad's ? and what were they charging?

 

[RAC]

tell us more about the roof cleaning operation did they flood the market with "lowball" ad's ? and what were they charging?

They don't even advertise - anywhere. They do business based on word-of-mouth.

 

[Doug Dahlke]

Got hit with two lowballers in one day. Yesterday I was at my nephews house and someone had thrown a flyer in his driveway advertising house washes up to 2700 square feet for $135. A customer I quoted a driveway cleaning to yesterday called to tell me that another guy cut my price in half. These people must be stupid or have very low financial expectations from their work.

 

[Grant]

A customer I quoted a driveway cleaning to yesterday called to tell me that another guy cut my price in half.

Tell the customer that you lost that you understand that being price conscious is very important but when you pay half price for the job and then you have to spend full price later to correct or finish the job, they have now spent 1 1/2 times your proposed price. You get what you pay for.

 

[DustinC]

Don't market to people who shop on price.

 

[The Cleaner]

I just recently lost Q'doba here to a window cleaner for half my bid and he takes twice the time to do half the quality. Am I suppose to lower my bid to the same $50? I can't. Yes, the window cleaner spends 2 hours making $50!! I thought I was close to losing money when I was doing it for $100 in a hour.

Reality..... PM's want the lowest price.

I can sell with the best... However, I CAN'T match prices with guys that are operating illegally. What has that got to do with not knowing how to sell?

Not saying that there's no money in commercial.... just saying that it is a high volume game and low margins. And, yes, most PM's want the lowest bid.

That i dont belive, i think most property managers are looking for quality work at a fair price. i think if you have the equipment to get in and out of a property quickly, and do a great job! you can be resonably priced and still make money.

When you do these properties on a quarterly basis, they tend to stay fairly clean. This is an advantage for me to get in and do the job quickly and still keep everyone happy..

 

[The Cleaner]

Damn good post John!
i think for next year i will play around with the rock bottom price. use 2X 3000 psi @ 3+ gpm's and one lil 2200psi for xjetting
3 guys
and schedule 10+ jobs per day i would rather learn and adapt to this model earlier then later. tell us more about the roof cleaning operation did they flood the market with "lowball" ad's ? and what were they charging?

Good for you!! Go ahead and sell yourself and your future short. It takes time in this business to build up a great reputation, it does'nt take long at all to ruin one..you will never make it legally in this field if you charge prices that you are quoting, good luck, let me know when your selling your equipment, i can use a good pressure washer to wash my truck with.

 

[pressurepros]

Damn good post John!
i think for next year i will play around with the rock bottom price. use 2X 3000 psi @ 3+ gpm's and one lil 2200psi for xjetting
3 guys
and schedule 10+ jobs per day i would rather learn and adapt to this model earlier then later. tell us more about the roof cleaning operation did they flood the market with "lowball" ad's ? and what were they charging?

Let us know how that works out for you.. LOL

PS: Your way-off mentality and model fails to account for the marketing you will need to do.. Your cost estimates aren't even close.. work smart, not hard. I'm trying to save your business here.

 

[MIKE FP]

i just spoke to a customer who i currently have a contract with and she told me the (ups) guy was actually trying to get the job. she said she told him"don't you make enough money already"?anyway, she said she would not deal with him.

 

[Russ Spence]

ups ?????


hahahahahaha

 

[MIKE FP]

i mean, dont the ups workers make good money, vacation, 401k, full medical benefits and i dont know what else. and heres this ups guy trying to take my job as if he doesnt make enough money already. but i understand that this is part of being in the home improvement business and will eventually get worse as time goes on if it hasnt already.

 

[mario]

i looked at the guys rigs thats washing houses here for 99.00, 6 trucks, no ladders, cant even see his little pressure washers in the back. no brushers, no tanks ,just little trucks that haul ass. To cheap a$$'es and broke a$$'es. no trailers hauling heavy stuff around. just hauling ass and making cash. hes been in buisness 6 years.