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Bidding Real Cheap

8K views 65 replies 25 participants last post by  aaron61 
#1 ·
Just so happened in the last week I got two calls out of the BBB directory. Go out to do a walk around on the exteriors and both just want a "ballpark" figure then and there. So I "range" them within $300 of the low and high figures but tell them I need to sit down to put figures together, (and present the bid properly). I go to the office and put the numbers together and thought what the heck; I'm just going to shoot them the lowest figure I can and see what they say. Believe it or not I was $1500.00 too high on one and $1825.00 too high on the other...or so they said. I told them they probably need to hire those guys, but are they going to do all the prep steps, use the quality products we do, insurance, etc., etc. ? These people didnt care about those things. Hope they get what they paid for.

One thing I will not do is give our work away.
 
#3 ·
... Hope they get what they paid for....
So do I, so do I. It's one of the oldest adages around, but so true. Undercutters like that make people like you, me, and everyone else that strives for professionalism look all the more better.

I looked in the "Valu-pak" coupons today to see what kind of competition is around. There's a lowballing co. that will "powerwash your house for free if you get your entire exterior repainted"...:blink: Is it me or is that just peculiar? I'm beginning to see all types of weird $hit in all types of businesses with this screwed up economy.
 
#4 ·
Oh no take it from NEPS VP ... you guys just need to sale you selves better.. I have been telling you guys this all year long. Sucks Wolf. I too have been up against this same thing. And yeah.. some even want you to "fund their paint jobs" and will get you the rest when THEY get paid :rolleyes:
 
#6 ·
Oh no take it from NEPS VP ... you guys just need to sale you selves better.. I have been telling you guys this all year long. Sucks Wolf. I too have been up against this same thing. And yeah.. some even want you to "fund their paint jobs" and will get you the rest when THEY get paid :rolleyes:
My residential closing rate is down. There are some people right now who just wont pay a reasonable, professional price because they are convinced they can get a bargain right now. Hard to imagine painters out there throwing down low prices but there probably are.
 
#5 ·
This economy does suck. And being summer, the students are running madly around looking for some work. There will always be some HO's who appreciate quality and what it costs, and there will always be HO's that think painting is cretinous and any drone can do it.

And then you have the salesmen who can "sell" a good job for cheap. These are the ones that scare me. They got the whole spiel, they promise insurance, quality work, legal workers, full prep, full prime, caulk, etc etc and they bid 2000 less than one of us. But they lie. They do a "good enough" job with substandard materials and unqualified technicians.

How do you beat the "salesmen" ?
 
#8 ·
the funny thing is these cheap ass homeowners have no idea what there getting into like do these people not realize after decades and decades of being alive ... that you get what you pay for

guess they dont give a hoot what there home looks like good reflection of who they are as well
 
#9 ·
My dad is a lowballer.

He bid on a job back in March painting a living room, bathroom, bedroom, office, stairwell, hallway and the downstairs family room for the whopping price of $1200. The lady then played games and lied about getting caught hiring an unlicensed plumber and getting some work done without a permit. I told him she sounds like she wants you to drop your price. Sure enough he did. Dropped to $900. Months later she calls and wants him to do the work, then back to her games again.

Think she's just looking for a lower price again.
 
#15 ·
My dad is a lowballer.

He bid on a job back in March painting a living room, bathroom, bedroom, office, stairwell, hallway and the downstairs family room for the whopping price of $1200. The lady then played games and lied about getting caught hiring an unlicensed plumber and getting some work done without a permit. I told him she sounds like she wants you to drop your price. Sure enough he did. Dropped to $900. Months later she calls and wants him to do the work, then back to her games again.

Think she's just looking for a lower price again.
If your father is painting illegaly HE IS The Problem!
 
#10 ·
no offense to your dad but... why bother if she cant meet in the middle somewhere tell her to paint it herself then

you cant trust these kinds for business there just looking out for themselves and they dont give a **** about quality they want a clean up job cause there house probly looks like a crack shack
 
#13 ·
The answer to how to beat salesmen, how to beat lowballers, how to beat homeowners that think what you are doing they can do themselves.. increase your leads. The last thing I would do is lower prices. That's going to make your trade even less valuable.
 
#16 ·
I've suspended exterior painting entirely - I have no ambition anymore to even quote it. The pricing out there is so ridiculously cheap - I just come across as a big A-hole when I want decent money. Guys want $16-$17 minimum even in this economy. Payroll 'buden' is $22.50. Even if you include materials into your man-hour rates and let burden go to 40% of gross receipts - that's a $56.25 man-hour. Average home I run into needs 250 man-hours of labor, and that's if you can keep a 'tight' ship with guys not F'ing you behind your back - so now the average repaint is....$14,000 for an 8 day job with 4 guys.

You could get that in 2000 - nine years later you can't even get half that.
 
#19 ·
Guys want $16-$17 minimum even in this economy. Payroll 'buden' is $22.50. Even if you include materials into your man-hour rates and let burden go to 40% of gross receipts - that's a $56.25 man-hour.
Dan

Everytime you do this number negativity it makes me think that my bookkeeper, who is extremely competent and my accountant who is extremely competent, must be out in left field.

Can you explain how you arrive at these figures that you put out here?

Have you ever actually run a crew of 4 guys for a year to see how it plays out in real life as opposed to in your head?
 
#33 ·
I find exteriors to be good, repaints fall in the same range. New construction is lagging right now, I think it because I need to fine tune the process and work on crew development a bit. What I cannot land is a stand alone deck. Decks in conjunction with a home, no problem. Someone who only wants a deck done, not so much this year.
 
#34 · (Edited)
I would be curious to know how many here had any type of real "management" experience on a professional level. We talk alot about getting leads but I wonder where most are losing it. The management aspect starts with every little thing about your business and all are related to each other. I learned two things on someone elses payroll before I started up shop. One for a Fortune 500 company and one for a small painting company. Management (inventory, payroll, HR, production) and painting. To be successful in this trade you have to be proficient in both. Not just think you are, but are able to perform in both. If not your customers and your employees will see right through you and you will be in a cycle that will be almost impossible to climb out of. Being a good painter will get you a decent hourly job but being a good business manager will get you a business that can run like a machine and allow you to go hire that good painter.
 
#37 ·
I would be curious to know how many here had any type of real "management" experience on a professional level. We talk alot about gettng leads but I wonder where most are losing it. The management aspect starts with every little thing about your business and all are related to each other. I learned two things on someone elses payroll before I started up shop. One for a Fortune 500 company and one for a small painting company. Management (inventory, payroll, HR, production) and painting. To be successful in this trade you have to be proficient in both. Not just think you are, but are able to perform in both. If not your customers and your employees will see right through you and you will be in a cycle that will be almost impossible to climb out of. Being a good painter will get you a decent hourly job but being a good business manager will get you a business that can run like a machine and allow you to go hire that good painter.
Excellent point Neps! I find I use the skills I learned (in corporate/retail management for 13 years) almost daily in our business. I truly admire you guys that do both sides of the business well by yourself!:notworthy:
 
#39 ·
It can be done very well with just 3-5 guys. I have never seen an average of 3 workable days per week because every house has its component of rainy day work that we, well, save for rainy days. Also, its my responsibility to make sure we have more than one job in the works at a time so that if an exterior is a total washout, everyone has a productive place to go.
 
#53 ·
If you want your business to grow you MUST delegate responsibilities. IMHO. Most people want to improve themselves, so knowing that there is opportunity to move forward in the company is a great motivator for keeping up standards on the job. I believe that most "painters" that have their own business have serious power & control issues("they just can't do it like me") that in turn hold them back from growing their business, making more money and actually having less stress. This will free up your time to concentrate on other aspects of your business and your life.
 
#54 ·
Very good points about training, delegating, letting go ego, employee empowerment, and so on

I stayed solo because it has never been in my nature to step back and let others do what I know I could do better. Sure, it's an ego thing, a control thing, I admit it. But there of those of us who do not have the mentality to step back and manage properly. It takes some guts to admit that, especially here. But it is also being true to myself.

There is nothing wrong with being small. There really is nothing wrong with not wanting to grow. There is something wrong with WANTING to grow and TRYING to be big when you don't have the skills.

Plainpainter said something about 3-4 employee. From all the contractors I've talked to, if you have less than 6, you still gotta be in the field and then there is the bookkeeping, estimates, and other support time. From what I understand (no experience here, so please confirm or refute) 3 - 4 employess is the most difficult to maximize profit and minimize stress.

Another point made here was picking and training good people. Do you find turn-overs to be rampant? You pay your top guys what? 15 - 20 / hour ? And you need to make money off them so you are billing them out at 40/hour or so. But if they are good, talented, smart, good managers themselves, doesn't the old bulb turn on over their heads and they realize they could be making 45 - 50 / hour out on their own?

I am not knocking the large outfits. My hats off to you big boys, but I'm glad I never went down that road. I know I would fail. I like PAINTING. I am not a business man. I am a painter, and a good one. I've keep busy these many decades, own a vacation home, and have money in the bank. One thing I won't be able to do is sell a company when it's time to move up to the country house for good.
 
#55 ·
Very good points about training, delegating, letting go ego, employee empowerment, and so on

I stayed solo because it has never been in my nature to step back and let others do what I know I could do better. Sure, it's an ego thing, a control thing, I admit it. But there of those of us who do not have the mentality to step back and manage properly. It takes some guts to admit that, especially here. But it is also being true to myself.

There is nothing wrong with being small. There really is nothing wrong with not wanting to grow. There is something wrong with WANTING to grow and TRYING to be big when you don't have the skills.

Plainpainter said something about 3-4 employee. From all the contractors I've talked to, if you have less than 6, you still gotta be in the field and then there is the bookkeeping, estimates, and other support time. From what I understand (no experience here, so please confirm or refute) 3 - 4 employess is the most difficult to maximize profit and minimize stress.

Another point made here was picking and training good people. Do you find turn-overs to be rampant? You pay your top guys what? 15 - 20 / hour ? And you need to make money off them so you are billing them out at 40/hour or so. But if they are good, talented, smart, good managers themselves, doesn't the old bulb turn on over their heads and they realize they could be making 45 - 50 / hour out on their own?

I am not knocking the large outfits. My hats off to you big boys, but I'm glad I never went down that road. I know I would fail. I like PAINTING. I am not a business man. I am a painter, and a good one. I've keep busy these many decades, own a vacation home, and have money in the bank. One thing I won't be able to do is sell a company when it's time to move up to the country house for good.

The main thing is that you have to know who and what your companies goals are. Being a solo or a 3 man shop is fantastic if that is what you want it to be. Not growing is not a bad thing. I think we all agree that running a legitimate, sustainable business at whatever size we choose is the goal.

Finding good guys is difficult. It could take years to develop hiring systems to employ the right people. But once a solid foundation is built I think it gets easier. If you have a solid core of well trained professionals when you hire and bring more people on not only to they see how to work and act from their employer but they also learn from their co-workers. Build from within and let your own people set the path for new hires.

(For my company) I think the easiest to manage is a single crew of 3-4 guys. It is very easy to keep them busy, control quality and production. I do not think you need to be in the field with under 6 guys but I always am with all of my crews everyday for several reasons.

Not everyone is meant to be in business. I have very talented technicians but that doesnt mean they know how to market their talents, find work, collect payments or run the book keeping. A check 52 weeks a year for a salarly they know they can count on is worth more to them than 20 weeks at a higher rate. Stability.
 
#57 ·
Howie, great post. Before I got into this type of business ownership a good friend (who was a painter) said to me, "To make money in a trade you have to either go big or stay small.. everything in between is painful." No truer words were spoken. The past few years for me have been trying and at times, frustrating and stressful. There are many aspects of running a larger company that if not executed well, can kill profits. Ultimately it pays off, but when your doctor puts you on blood pressure meds and suggests Xanax to slow you down, you start thinking.. damn, is this worthwhile?

The flip side for an owner operated company is the fragility of it. Accidents happen. This is why I chose to grow PressurePros into an employee run company. I need to know that those that count on me will not have to change their lifestyle if I go down for the count.

Howie, a couple things I liked about your post were that you acknowledged your weakness and capitalized on your strength. That's not to say you couldn't learn employee management or hire someone to take care of it. The second thing I am assuming by your discussion of a vacation home is that you are confident enough to price what you are worth. No matter where your business is in size, profit margin is king.
 
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