Universal Pricing (long)

B

Bob Warfield

New member
I was watching "Ask John Eaks" (sp) on TV the other day and overheard something very interesting. A homeowner called in and asked about the proceedures for sealing a deck but the interesting part was that she got estimates from 2 professionals to have the deck stripped, brightened and cleaned, and stained. She said she got 1 estimate for $1,000.00 and another for $2,300.00, same deck, same proceedures. She said she really thought something was wrong with that kind of difference in price.
I have been giving this a lot of thought since then and haven't really come to any conclusions other than the fact that possibly this industry should have some kind of controls on it. I don't have the answers but I do know those of us who run legitimate business', full time, trying to make a living don't need to hear stories like that on national TV.
Sorry guys, and gals, but I also find it funny at times that a good many of you feel you need $90.00 to $100.00/hr to make ends meet. I have been in business for a good number of years, I'm almost 50 years old. I charge $65.00/hr for everything I do. I stay busy, 6 days a week if I care to, and make a comfortable income. I read the thread about the $99.00 house wash over and over and agree that on a smallish home, that's good money if you know what your doing.
Any Comments?

Bob Warfield
 
ron p/bob

Bob,i started that $99 thread.
The thinking on your post.
One is that the big $$ price was given by a guy who did'nt want the job but IF he could make a big hit, money wise,he would do the job.
I see contractor's do that all the time.
Next is overhead. The cheaper price could come from a part timer working with home depot tool's and supplies,no insurance,no building,truck is his everyday truck,he might not cover everything with plastic,he might use bleach,he might not have an advertising budget,hell he might not even pay tax's.
I have tried everything i can to open people's minds about pricing.
It is by far the most diffacult subject on the BBS.
I can go on and on about what the big $$ guy might pay that the low $$ guy dose not. Workmans comp,health insurance,ect...
Use MIKE and I as the 2 you were talking about.
I get health insurance from my wife,Mike pays $900 per month. Mike has yellow page ads,I dont. Mike uses his truck for personal and buissness stuff, I have a truck just for washing[ i need a second car] Mike pays to keep his equipment in a garage,I have a box truck and keep my supplies in my garage.
Thanks to the BBS here Mike and I buy our equipment,supplies,chems,sealers,and everything else at the same price.
So for MIKE to get the same amount of spendable cash in his pocket he has to charge more. He looks at the $99 house thing like i have 2 heads. He has to wash 10 per month just to pay for health ins. I have to wash 2 to get the same insurance.
I wash 3 more to cover exspenses and pocket the other 5 house's. Mike has to wash all 10 plus 4[4 or 5 because of extra amount of exspenses to wash double the amount of homes] more to cover his nut,then wash 5 more to make the same spendable cash.
So poor MIKE would need to wash twice as meny houses to get the spendable cash that i get from 1/2 his work.
Now Mike and I have the same everthing BUT overhead.
Because of this, I can wash cheaper then him and make more spendable cash then he will ever be able too.
I did'nt even get into interest payments, equipment payments,truck payments,truck insurance payments,accounting costs,phone cost's,time spent,ect...ect...
Mike i used you because i know a little about you, this was set-up to show why diffrent people have diffrent prices. In no way was i trying to use you as anything else. Hope you dont mind. If you do,delete your name.
It all comes down to payables and recievables.
Lowballer's could be putting more money in there pocket then a lot of higher priced full timers and because of this there will allway's be lowballers. Maybe lowballer's are not lowballer's, just guy's with very little overhead?
Health insurace is the #1 killer of start-up co's.
It is also the #1 problem in the USA today.
#2 is that everyone is SUE happy[that leeds us right back to insurance co's]
#3 is auto insurance-that takes us back to #1 and #2
So in conclusion you might be putting more spendable cash in your pocket at $65 per hour then someone else charging $100
Then think how hard the $100 per hour guy has to work just to sell the job at his price? Then you run an yellow page ad that tell's the customer that you provide the same service for a lot less. You land twice as meny jobs with far less effort because you can afford to sell the same service at a much lower price. You spend your time washing not selling.
Mike see's he can never compete in a market like this because of his overhead and moves on to a diffrent kind of market where skill is more important.[wood refinnishing]
less jobs,more $$ but shorter season.
in order for mike to keep alive he is going to have to get more crews and work or devesify to wash diffrent things[all season-year round]
One guy with his overhead with lowballers all around. I dont know how he dose it. I give him a lot of respect.
Beth and Rod 2 owner/operators
5 crews,year round work,sell's chems.,sells web sites,gives time to help the industry.
I need the information on how to go from me/mike to beth and rod? Funny thing is YOU might make more spendable cash then them.
 
I'm not sure I can muster a response to all of that, but I'll touch on a few things.

Poor Mike?? LOL.

For the record, I don't use my truck for anything but business, just as you Ron. I do have a second car. And a third, actually. (if you count the wife's)

My trailer rig is paid off.

Health Insurance sure is one of the biggest problems, no doubt.

Why wash a house for $99 when you could just as easily get $150 ?? I think your afraid to do some selling, and instead let your price do the talking............

Skill is more important in wood, but house washing still represents over 20% of my business. I like them both, but wood generates more repeat business.

The key to moving from where you are to where Beth and Rod are is good employees................hard to find, of course. I have one right now, and if I can keep him, I expect 2003 to really start off with a bang. I worked the first half of 2002 by myself, and it shouldnt be hard to beat that this year. I have a second truck ready to go, it just needs state inspection and insurance.(its my old van that I used before I bought my Super Duty).

That's enough for now, I guess. I can't wait for spring!
 
Bob,

Keep in mind, when you make $65 an hour working, thats not really the case. By the time you add travel time, estimating, time spent getting supplies, bookeeping, and all of the other little things we do, your $65 and hour is probably somewhere around $40 per hour.

Thats why we aim higher ($90 - $100) so in the end, you're still ahead of the game.
 
Just my two cents worth, but the LAST thing we need in ANY area of our lives is more government regulation. If a homeowner is willing to pay me $200.00 to do a housewash, and is happy with both the work AND the price, why should any government agency have word one to say about it? As a property manager for years, I can attest to the fact that it is very common to get bids with widely varying prices for just about any type of contract work. Often we didn't go with the lowballer if the price was too low. It wasn't uncommon to get a bid that was much higher than the others. They never got our business. Why have government regulations in place to do what common sense already does?
 
Can't believe you are going out to wash $200,000 + houses for $99.00! These customers are the same people who drive past you in their Lincoln Town Cars/BMWs watch TV on the $1500 wide screen in their remodeled basements while their kids play the latest video games wearing designer clothes. Don't you think you are worth more than $99.00.

Do you think it's a self esteem thing? Pressure washing - why anyone can do that! Even a trained chimp! That's why you tolerate such a low return on your billable hours. A $99.00 washjob, what more could they expect from you-not much! If they are not happy-they are only out $99.00! Just because you can't afford a $250.00 exterior home cleaning doesn't mean they can't!

You are fond on arguing that Walmart, Coke, Goodyear, etc. are successes even though they low ball the hell out of business. There is a difference between selling an item, they handle stuff, things, commodities. We sell TIME, not houses nor decks. That's what we have to sell,: service=time and expertise.

Which service is better? Fed Ex, UPS or Post Office? 1-3 day delivery: Post office $3.00; 3 day - UPS $8.00 or FedEx $10.00.
FedEx is #1 because they told us they are #1, not better, not cheapest, NUMBER ONE. "When it absolutely has to be there...."

Market yourself as a professional and customers will treat you accordingly- clean and neat looking- vehicles and personal. You are there to offer a service that no one else can-your expertise and your time and it's worth a hell of lot more than $99.00 but you have got to convince yourself first.
 
the $99 thing

is being taken out of context.
It was to show the diffences between a lowballer who wants to do up-grades and add-ons.
I have changed this to $150 and include the gutters.[outside]
Also the SPECIAL[special used for getting a customer base and selling additional services] has restrictions.
I NOW UNDERSTAND WHY ONLY DELCO HAS A PRICE LIST!!!!!!!!!
IT JUST CAUSES TOO MENY PROBLEMS.
IM SORRY I EVEN TRIED.
If you spend 1 hr with travel and selling a customer on a house wash and another 2 hrs traveling and washing the house. You have 3 hrs time invested and/or maybe they did'nt give you the job after the hour you spent talking to them.
I just wanted a way to save travel time,selling time,and poss. not getting the job by offering a SPECIAL.
One trip and i know im going to make money.
WHAT IS WRONG WITH THIS?
I cant pass on some of the savings to the customer?
When you take your car to the car wash do you know what extra services your going to take before you get there?[wax,undercarrage wash,special pkg. deal]
At the check out line at the store, do you ever buy stuff that is right in your face[candy,mags,batteries,smokes,ect...]?
Hell yes you do, it's called impulse buying.
You might also be one of the people that buy dog food and shampoo at the food store. You know it's about 1/2 the cost at a diffrent store but YOUR THERE.
I was looking to cash in at the same mentality.
I work 7 to 5 everyday to bring home $500[spendable] and ive been working for this co. for 11 years.
Dont try to tell me i cant do a lot better washing houses at $99 or $150 and have the chance at EXTRAS.
i AM NOT SAYING TO BASE YOUR BUISNESS ON $99 HOUSES.
I am saying you need to get a customer base FAST.
You can learn everything about how to remove dirt on these BBS but very few post's on HOW TO GET A CUSTOMER BASE.
MY way is to show off my work. As i get busy i will increase price.
At the same time im learning and fine tuneing so im getting better/faster.
I JUST WANT TO WORK!!!!!!!!!!!
TRUE,IM NO SALESMAN, SO ILL MAKE IT UP IN VOLUME.
THIS IS FOR HOUSE WASHING ONLY.
My opinion on contracts is completly diffrent.
Also "who the hell am I ?" a wannabe buisness owner with a fancy squirt gun.:D
 
I just skimmed through this thread, but I can tell you, it all depends on where your comeing from, ie first/second year business trying to pay bills and advertize so that you can grow, or five plus year business already with a comfortable customer base, I'm taking the part time lowballers out of this equation on purpose, because they will always be around and have little repeat business.

I'm just enetering my 3rd year of business and still offer discounts, particuarly when its slow, I just discounted a $291 house to $218 and added the front and back patio, will I regret that in 2 or 3 years, I don't know, but I do plan on being around to find out!!

Gav
 
I couldn’t read everything; this 99.00 house wash is a marketing tool. I’m sure that 99.00 house wash can lead to many other things a customer may need.

I have seen cheaper prices than that. I have a friend here in Phoenix that washes driveways in Dec for 39.95 any four care drive. His average ticket when he is finished is around 600.00 for a half day. He sometimes spikes at 1800 plus. Before he leave the customer cleaned the house the pool deck the garage and anything else. He even details the cars if they want. It’s a service that I don’t like because I don’t deal with home owners. He’s found a markets and that what he does. Believe me this is real and he makes more than I do on average. He a one man band and has hardly any headaches.

39.95 house washes and he averages 150.00per hour. He uses a cold washer and has hardly any over head. He drives a jeep and a small trailer.

If I wanted to stay smaller I would seriously think about running more promo and come on ads. I think in the residential market you need to have a catch.

Running specials don’t mean you’re cheap. Often company’s that run these ads are more expensive across the board.
 
You're joking right! $39.95 and he leaves with $1800 plus! That's some kind of a stretch! Sounds like something PWNA should start doing. But seriously, it sounds like an introductory offer and when he goes to give the estimate the customers ask about this and that or he brings it to their attention that he does etc. He then writes up a proposal or is it simply the bait and he does the old switch?


In order to raise the level of professionalism in this business, which I thought was one of your goals, don't you think one should first act like a professional, shoot straight and explain what separates your company from the rest of the people out there. Deal with the customers expectations, write it down and point out this is our price plus tax. Offer any guarantees and have them initial the agreement. Is that too difficult?
 
I'm curious who spends an hour talking to a customer about a house wash! The longest I could possibly imagine that taking would be fifteen minutes, and I would say most take under ten............in my experience. But I tend to be short and to the point.......
 
mike

if you can just look around and say OK "i will wash the house clean the gutters and front steps,with the walk included for $250" then walkaway satisfied you did your best job. Then im glad it works for you.
At the $99 price you get the whole show.
I give you pictures with THE EXTRAS.
"HELLO,I am Ron from Pro-Wash. Im here to clean your home. I would like to show you some pictures of my work so you know what to exspect from my service today."
First picture is more or less a close-up of mold on vynal,then it removed. Same with a close-up of the outsides of dirty gutters.
On the top of those pages is a header with the word SPECIAL.
On the bottom of the second page it say's "additional services available at time of house cleaning" then on the rest of the pages will be
the extenda wand and a gutter cleaning attachment[in use],a surface cleaner in action,a before and after picture of deck re-finnishing,
a roof [before and after], then a fence job.
In addition there will be printed material from satisfied customers,my suppliers printed material,
A picture of my wife and I standing by my rig[maybe a pic of the rig i started with and the rig i have today] "you cant progress in buissness unless your doing something right"
Then some pics of the fleetwashing because you never know whom your talking too.
I will be on the high end of the priceing on decks unless decks really take off. Decks are as much a painters/woodworkers job as a cleaning job.
In most cleaning jobs it's either clean or it's not. You did it without damage or you damaged it.
Wood is diffent and open to interpitation by the customer.
Color,amount of sanding,setting the fasteners,color retention,moving crap,tapeing,covering plants,overspray,4 kinds of strippers,3 kinds of sealers,2 kinds of brightners,everything you touch is bad for you, from PT wood pulp and sawdust to strippers,to breathing the sealer.then all the additional tools you need,ect.....of all the things you can lowball i think people that do deck's correctly are crazy to lowball. There is just too much involved to do it right not to charge for it.
on top of that you spend the most amount of time with a customer for 1 job then any other[unless your talking commerical].
Back to the point-you are correct you are looking at 1/2 hour tops to sell a reg house wash. Extras take extra time.
Mike on average do you "swing by" to give est. on house washing or do"rainny day est." "slow day est" or do you have "1 day set aside"
i'll guess for you you do est. AFTER rain because the decks are too wet to seal but then again you wash other things.
Where do you budget your time for est. and has it changed because of repete customers?
 
In the spring and summer, most of my estimates are done on weekends, time set aside specifically for them. I can elaborate later...............no time right now.
 
Gav (Outlaw)

So whats the verdict -- do you regret?
 
Pricing from the new guy....

I have ran wo successful business here in NC, but pesky little wars that Uncle Sam had me attend forced thier closure..... but anyhow.....

When it comes to pricing, overhead has to figured in. I can get away with lower pricing because I am military active duty for now.... I don't have to pay for health insurance. Granted I paid a good bit of money to build and supply my rig, but I have very little overhead that alot you guys do. Yes, we are licensed, bonded and insured, we even has a waste water discharge permit, but we also are a home based business and we do alot of business to business sales.
But you also have to look at the relative income base of your area.... location, location, location. In one area here I can charge $100 per house.... but then go 20 miles away to Pinehurst, NC.... Golf Country.... and I get $175 to $250 per house. Business' in Hoke County like a gas station, I can get $250..... but in Pinehurst I can get $400 for basically the same job. So the location is definately relative.

Art
A & H Pressure Washing
and Steam Cleaning
Raeford, NC
 
Thank you Art, for understanding that demographics make a huge difference :) We're just down the road (far enough to be good working colleagues) What do you do the most of?

Celeste
 
I don't believe in a universal pricing structure because what someone would charge in New York or California probably would not work in North Carolina.The same could be true for counties or cities, but with that being said, I have no problem giving a price over the phone or advertising a certain price for a housewash in my market area.

I know my area and what the average price for a housewash is in my market. I know what I need to make to cover my overhead and make a profit. I know how long it takes me to wash a certain size house. Nearly everything in my market is vinyl siding, houses average between 1500-3000 SF and rarely am I cleaning anything other than mildew and dirt. With all this in mind, I basically know my price before I get there. I do tell the customer on the phone that there are certain things that could change the price such as hard to access areas, certain stains, etc. and I will see when I get there but they can just about count on this price not changing more than $25 or so give or take. They are OK with that. Most of the time I get the job not based on my price (I'm generally not always the lowest), but because they are just glad to hear someone give them a price without having to take the time off work, meet a contractor to write an estimate, sit there and look at all their pictures and listen to them sell themselves. Their time is just as important to them as mine is to me.

It would be crazy for me to drive 30-45 minutes to a home, write an estimate, try to sell the job, have the homeowner tell me they will contact me when they the decide what they will do and then drive another 45 minutes back home. If I do get the job, that's another drive back out. Yes, I could go with the expectation of washing the house at the time of the estimate but my schedule doesn't allow me to work that way. To cover my overhead for time writing estimates I would have to jack up my price. The hour and a half drive would add another $150 to the price making a $150 or $200 housewash now $350.

The people I talk to and me personnally, don't want to hear a contractor tell me on the phone that he can't give me a price because there are too many variables involved and he needs to come out. What that tells me is that I am going to have to take time out of my day, that I don't have, to listen to him give me a sales pitch why he is best for the job, higher priced and basically waste my time to tell me the same thing the other 3 people I called told me. Remember I am talking about housewashing. Not decks, commercial flatwork or other types of work that take measuring and accessing the situation. Admit is guys, there is not a lot that can change the price of a housewash. Every once in a while you may run into one that gives you trouble, thats with any profession, but more than that you get an easy in and out job to make up for it.

Every spring I run a housewash special. I advertise it on my website and sometimes flyers. I have repeat customers who take advantage of it. They know about it and schedule their work early. My phone rings all day in the summer with homeowners not asking for estimates but telling me right of front to schedule them for a housewash. 80% of my housewash customers I rarely meet. They schedule the job, I go and do it, they don't have to be there or leave work, I put an invioce in the mailbox, call them the next day to make sure everything was OK and they either put a check in the mail or go to the website and pay with a credit card. With driving time to the job, set up and time spent washing the house I get an average profit of $75-$95 an hour. Sometimes it is over $100. I could not get that by going an writing estimates.

There are those that say that if you get most of your jobs, say like 4 out of every 5 calls you get then your price is most likely too low. That's bull****. It could be because you are giving the customers what they are looking for. Again, like I said, this works in my area, it might not work in yours. That's the key, you have to find what works in your market. In some markets people want you to come out and talk with them, write a detailed estimate, show references and sell them. They are conditioned to believe that is part of the price, which it should be. They believe they are not getting what they are paying for if you don't sell them. That's not the case in my area. On occasion I get one and I go sell them and when I leave they are getting the same service for $350 that they could have gotten for $175 if they just would have said put me on your books for Tuesday.
 
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