Time & Materials Hacks - Paint Talk

plainpainter · 06-30-2009, 03:52 PM

I am going to run this up the flag pole - just to see how many guys want to throw egg in my face.

I think guys that separate dollar figures for labor and materials on their estimates for homeowners are the scum of this industry. There is absolutely no other reason for a homeowner to see your material costs - other than a thinly disguised attempt at trying to sell based on 'price'.

I bet the thought is that the 'materials' price is excusable, out of the control of the contractor to control. And thus forgivable.

One tactic is to present 'smaller' estimates upfront with additional 'backend' costs - in an effort to win more estimates. Another is to simply pad the materials column with a higher price to make labor look less - all scum tactics.

DeanV · 06-30-2009, 04:27 PM

I usually do not separate them out, but the painter I used to paint for would, he felt that people often did not realize how much materials added up to on a job and felt it looked better to itemize them.

plainpainter · 06-30-2009, 04:50 PM

So he basically felt he had to justify his price - then he's appealing to a price conscience crowd.

I was helping my Dad out for a while driving him to physical therapy - as he couldn't even drive himself there. And I was listening to another patient talk about getting multiple estimate from several painting contractors - and she was so perturbed about the vast difference in pricing - you almost got a feeling that this woman felt like she was personally being insulted - big sign of a lack of intelligence. Anyways even if you separate out materials - 3 contractors are going to quote 3 vastly different materials costs - and you will still end up with miffed homeowners that think they're being swindled. Afterall paint only costs $12/gallon - it's a proven fact from the design remodeling cable shows - right?

jacob33 · 06-30-2009, 05:14 PM

Quote:

Originally Posted by plainpainter

Afterall paint only costs $12/gallon - it's a proven fact from the design remodeling cable shows - right?

I hear if you mix it with water you should be able to get the price down to about 8 or 9 dollars a gallon. That being said they also paint a whole new house in a week on tv and look good while doing it. I see no reason why painting a house should cost much at all.

Actually if you talk to most builders painting is the most expensive part of a new house at least here it is. More than framing electrical flooring paint is expensive to do right. What this has to do with time and material I do not know but I do not like the customers to know what my material or labor costs are I just give them a bid price. If they complain and some do I tell them I use top quality paint and the whole insurance costs and usually I win them over. I do not want them to know what I make. But I do want them to feel reassured that they are paying for quality.

aaron61 · 06-30-2009, 05:23 PM

Why would it matter...
We often have to educate customers on the cost of materials. Do you honestly think everyone knows how much materials it is going to take to paint there home. It certainly has helped us sell more than 1 paint job. If you think you are not selling on price you are fooling yourself. Think about how you purchase items and services, is price not a factor for you, does your mechanic show you how much your parts are?
We are not artists. I am trying to sell trust and quality at a reasonable price. If they need a material price I don't care

plainpainter · 06-30-2009, 05:44 PM

Indeed mechanics do show how much parts are....but I had to have my A/C compressor changed and one garage listed parts at $800. My friend introduced me to his mechanic - and I got the whole job done including parts for $450. So what does that say about the $800 parts quote from the other garage? And everything put into my truck was brand new. And perhaps even I shopped on price for this one - but the service of my friends mechanic was superior to the other garages I have dealt with. So he could be the same price and it would still be a value to take my truck to him.

Let's rephrase this a little bit. You bid an interior repaint for a family. One job is strictly Ben Moore Super Spec paint....and the other quote is 'Fine paints of Europe' oil gloss on the trim and their 100% acrylics on the walls. Is the only difference in price the difference in materials costs? Or do you feel like you have given a greater 'service' using the higher end paints - and thus should enjoy more profits to go along with the higher cost materials?

Not to mention if homeowners started to research this - they would see that the impact of using the highest cost paints to the cheapest is a difference of less than 5% of the total job cost. A friend of my does the 'materials' slip after the job is completed and submits it to the homeowner for payment- and I can't tell you how many times she just pads the heck out of that slip - because she felt like she deserved more money on the job - she gets away with it.

aaron61 · 06-30-2009, 06:04 PM

I do not believe showing what I propose the materials cost will be is T&M because my price is my price no matter what!
My profits are not based on any other contractors numbers. My overhead is different than yours. A 1 man show will have a different price than mine. Maybe higher maybe lower.
Your mechanic comparison is a great analogy of how most painters I know shop more on price than any group of people I know and yet they complain when their potential customers do the same.
Again it's a combination of many different things coming together in order for us to get a job from a homeowner. The initial meeting sets up trust and education that you have to hope will out weigh their seduction of a lower price by another contractor.
With commercial, it's all about price.

DeanV · 06-30-2009, 06:08 PM

I would have thought plainpainter would seekout the highest prices!

vermontpainter · 06-30-2009, 06:15 PM

I think alot of guys just expect this to be really easy. You get employees, they paint as well and as fast as you, they care as much about your profitability as their own paycheck, customers are fighting each other to get on your schedule, you can sit there and raise prices at will and never have to roll up your sleeves.

It doesnt work that way. You have to take the time to assemble a good team. You have to train them and hold them accountable. Sometimes you have to fire them. You have to spend money to market and work hard to sell jobs. You have to communicate effectively to the customer, without cynicism, the experience that you can promise them in return for the price you seek. Brian has been saying it for years, and sometimes the word differentiation is overused, but if two companies look the same to the consumer then the only deciding factor will be price. There will be times when the customer really really would prefer to use you, but you are just too far beyond their budget. This doesnt make them bad people and it doesnt make you a bad contractor.

Personally, I dont worry about how other contractors are presenting their estimates. There are much more important things to be focusing on right now.

bikerboy · 06-30-2009, 06:31 PM

Although less used now than in the past, you could find many older panters who have used T&M on custom jobs. Specific builders (never had a home owner) have asked me to do jobs T&M or recently, just time. They are usually not big jobs, and we don't pad the hours. (which builds the trust that allows clients to ask you to do it that way)

Do you believe T&M is for hacks because you don't do it?
Or because the situation has yet to arrive?
Would you turn it down?
Do you trust yourself?
Or do you think everybody is like your friend?

fresh coat · 06-30-2009, 06:42 PM

"Scum of the industry". WOW -that's pretty serious stuff. We do not seperate materials in our proposals. But, I don't see what the big deal is if someone else does. On a few occassions, I've had clients ask me for the difference in price if they purchased the paint and it ends up being around 10%. We pride ourselves on never adjusting the the initial quote (as long as the scope of work doesn't change).

I can see how including the materials seperately could be advantageous. I believe the more the customer knows about our involved costs, the better educated they become. Inflating material cost to cover labor is pure ignorance. Be true to the client and they will reciprocate.

plainpainter · 06-30-2009, 06:54 PM

Quote:

Originally Posted by bikerboy

Do you believe T&M is for hacks because you don't do it?
Or because the situation has yet to arrive?
Would you turn it down?
Do you trust yourself?
Or do you think everybody is like your friend?

I don't mean 'T&M' per se - I mean guys that separate labor from materials on their estimates.

plainpainter · 06-30-2009, 07:03 PM

Quote:

Originally Posted by fresh coat

I can see how including the materials seperately could be advantageous. I believe the more the customer knows about our involved costs, the better educated they become. Inflating material cost to cover labor is pure ignorance. Be true to the client and they will reciprocate.

More ignorance - I can tell you right now lots of customers don't care about our costs - lots of customers don't want to be educated in the ways of the costs of liability insurance, of workers' comp, matching payroll fica and medicare taxes, overhead of having trucks, equipment, storage. They care about only the bottom line - they want the best possible job for the cheapest amount of money - that's it! And if you think putting your materials cost on your estimates is way to 'educate' a homeowner - you are sorely wrong.

Now I have customers that want my quality and pay for it - but these are referrals, repeats, and folks just generally tired of low quality work.

But who knows maybe I should itemize all my costs - why stop at material costs? Why not list every single direct costs - employment payroll burden, matching fica and medicare and of course all my indirect costs for running my business - like gas consumption, vehicle repairs, advertizing costs, phone bill, health insurance, liability insurance, equipment amortization, gross profit margin, owner salary, sales commision, etc. That would be a real funny estimate to deliver!

bikerboy · 06-30-2009, 07:10 PM

Quote:

Originally Posted by plainpainter

I don't mean 'T&M' per se - I mean guys that separate labor from materials on their estimates.

In Maryland you are walking a fine line. If you seperate the materials, it is then considered resale. You then have to collect taxes and such. Don't know of anybody prosecuted for it, but.......The state's lawyer is bigger than my lawyer.

fresh coat · 06-30-2009, 07:19 PM

Quote:

Originally Posted by plainpainter

More ignorance - I can tell you right now lots of customers don't care about our costs - lots of customers don't want to be educated in the ways of the costs of liability insurance, of workers' comp, matching payroll fica and medicare taxes, overhead of having trucks, equipment, storage. They care about only the bottom line - they want the best possible job for the cheapest amount of money - that's it! And if you think putting your materials cost on your estimates is way to 'educate' a homeowner - you are sorely wrong.

Now I have customers that want my quality and pay for it - but these are referrals, repeats, and folks just generally tired of low quality work.

But who knows maybe I should itemize all my costs - why stop at material costs? Why not list every single direct costs - employment payroll burden, matching fica and medicare and of course all my indirect costs for running my business - like gas consumption, vehicle repairs, advertizing costs, phone bill, health insurance, liability insurance, equipment amortization, gross profit margin, owner salary, sales commision, etc. That would be a real funny estimate to deliver!

That's not what I mean. Just saying, I don't see the big deal in including the material costs as an additional line item. As long as it is true. Like I said, we don't do it but I can't understand why this is a big deal.

aaron61 · 06-30-2009, 07:28 PM

Quote:

Originally Posted by plainpainter

More ignorance - I can tell you right now lots of customers don't care about our costs - lots of customers don't want to be educated in the ways of the costs of liability insurance, of workers' comp, matching payroll fica and medicare taxes, overhead of having trucks, equipment, storage. They care about only the bottom line - they want the best possible job for the cheapest amount of money - that's it! And if you think putting your materials cost on your estimates is way to 'educate' a homeowner - you are sorely wrong.

Now I have customers that want my quality and pay for it - but these are referrals, repeats, and folks just generally tired of low quality work.

But who knows maybe I should itemize all my costs - why stop at material costs? Why not list every single direct costs - employment payroll burden, matching fica and medicare and of course all my indirect costs for running my business - like gas consumption, vehicle repairs, advertizing costs, phone bill, health insurance, liability insurance, equipment amortization, gross profit margin, owner salary, sales commision, etc. That would be a real funny estimate to deliver!

That's just ridiculous! That should be included in your labor burden.
Seriously, again most people don't have any idea how much paint is needed. If they're thinking 10 gallons and it's really 40 do you really think it would hurt to let them know that.
I don't usually put it on the proposal but if I get the feeling they are clueless I will say something like "You know we are going to probably use around 5 gallons of sealer and about 40 gallons of paint" Their usual reaction is ,"really, I had no idea"

fresh coat · 06-30-2009, 07:48 PM

Quote:

Originally Posted by bikerboy

In Maryland you are walking a fine line. If you seperate the materials, it is then considered resale. You then have to collect taxes and such. Don't know of anybody prosecuted for it, but.......The state's lawyer is bigger than my lawyer.

Really? That is some good info. Like I said, we don't do it but I had no idea there were implications like you mentioned above. Thanks.

MAK-Deco · 06-30-2009, 08:49 PM

Quote:

Originally Posted by fresh coat

Really? That is some good info. Like I said, we don't do it but I had no idea there were implications like you mentioned above. Thanks.

I believe some states you are required to itemized because of sale tax issues. or like Biker said if you do you may be required to be a reseller.

vermontpainter · 06-30-2009, 09:15 PM

Customers and employees both, like, suck

NEPS.US · 06-30-2009, 09:24 PM

Holy Mackerel!