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Old 01-26-2012, 02:40 AM   #1
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Default Lowering the Final Bill - Ever Do It?

Usually my bids are pretty good and when the jobs over and done with I can look back and see that my number was right on. The price I gave them and the customer agreed to was fair to both them and myself. However, every now and then everything goes so smoothly on a job that it zips right along and when it's finished I can see that I made quite a bit more than I aim for as my typical profit margin. Sometimes... SOMETIMES, when this happens - and the customer was a really good one to work for and made the job an enjoyable experience - I'll reduce my bill a bit to make it a little nicer for them. Just curious if many others out there ever find themselves doing this from time to time.

Pros and cons?

Dan
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Old 01-26-2012, 03:00 AM   #2
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I never do, I just tell myself what comes around goes around. Meaning I take a beating now and then, then I do quite well. It all evens out, or at least I hope lol

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Old 01-26-2012, 03:18 AM   #3
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I never do, I just tell myself what comes around goes around. Meaning I take a beating now and then, then I do quite well. It all evens out, or at least I hope lol

Pat
I agree with that "law of averages" concept Pat and most of the time that's what I do myself. But every now and then the situation just settles out in a way that it seems the right thing to do. Probably not a very smart business decision though.
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Old 01-26-2012, 03:31 AM   #4
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I agree with that "law of averages" concept Pat and most of the time that's what I do myself. But every now and then the situation just settles out in a way that it seems the right thing to do. Probably not a very smart business decision though.
I dunno, sometimes the technical version of a smart business decision is not always right. There are times like what you are suggesting that could be a better business decision in the long run.

I would also bet that half the time people do that, The customer says a quick thanks and leaves it at that, where here you are debating over such a decision for a few days if not longer. As you're driving home you completely regret what you just did.

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Old 01-26-2012, 03:42 AM   #5
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What Pat said.
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Old 01-26-2012, 07:34 AM   #6
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I would never do that,nor would I ask for more money if my bid was way off.That's just part of this business. IMHO
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Old 01-26-2012, 07:45 AM   #7
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I have and will continue to pad my materials list and cover my self for that wall that might need a 3rd coat or something.

That being the case, I am willing to tell the customer we didn't need as much and reduce the bill by $37 or whatever.

Never have I dropped it by $100s of dollars. Can you help it if you are so good at what you do that you that you make excellent money on an efficiently run project?

If it had taken you extra time to complete, would you have been happy with the original price?

If the customer expects to pay $2000.00 and you bill them for that, everyone is happy. One guy may take 4 days while a crew does it in a day and a half. It's still a job for an agreed upon price.
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Old 01-26-2012, 08:22 AM   #8
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Originally Posted by aaron61 View Post
I would never do that,nor would I ask for more money if my bid was way off.That's just part of this business. IMHO
yep,thats the way i look at it....ramsden has a post going now,some jobs you make a little less some you make a little more, it all works out in the end. our profession is very gray on most large jobs, many many things can come up on big jobs so i try to have a little cushion as we all should, if i fiqure a job at $10 k i hope to make between $2500 & $4000. with that being said i have made more on some jobs and i have made less on some
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Old 01-26-2012, 08:53 AM   #9
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Buy them a gift instead. Membership, fruit basket, coupon for another tradesmen or business you have worked out a deal with.. something.

You know you were probably the high bid in this situation, or they didn't bother to get another bid. I like those types of clients.
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Old 01-26-2012, 09:07 AM   #10
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In the case that motivated me to post this thread, I didn't bill the customer my surcharge for doing one accent wall. I just did it. Wasn't a big amount of money in the context of the entire job but it was still money I didn't end up bringing home. You all make good points against it.
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Old 01-26-2012, 09:27 AM   #11
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I'm also with Pat on this one, but can relate to Dan on the mental masturbation we go through when under budged by allot. This is a risk and reward business. Don't stick your nose up at the rewards.
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Old 01-26-2012, 09:37 AM   #12
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I used too. After hanging out on PT and hearing this question and answer before I don't anymore.

This is exactly one of many little tidbits that I've learned here that has made my business better and unapologetic about the numbers.



ps....good on ya Dan....I would love a 'smoooth' job about now.
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Old 01-26-2012, 10:47 AM   #13
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Can't say I never have, but I usually don't.

When I'm considering it, I try and remember jobs that didn't go like I'd planned, took way long than I'd thought, that no one ever paid me extra for.

(You're just a nice guy, RH..you can't help that)
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Old 01-26-2012, 10:50 AM   #14
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After 33 years in the business, I have found that very few customers remember your good deed of reducing their bill. I used to do it rather regularly thinking the client would remember me as a decent human being who worked hard & recognized an overestimate.

I don't do it much anymore, although I do have a heart & sometimes reduce it for a struggling single mom or an elderly client on a fixed income.
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Old 01-26-2012, 11:15 AM   #15
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When job are done under budget our painters get the bonus.
Job costing job to job is a good habit,
but at the end the margins matter more over a month or a year.
If there are any bad jobs or jobs you had to buy, these jobs are the ones that will help.
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Old 01-26-2012, 11:18 AM   #16
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As they say, everything depends on everything else.

Depends on the customer, depends on the PITA factor, depends on how many hours I beat the estimate by.


For some customers I'm at a stage where I work by the clock, but I still give them a ballpark estimate. Those estimates are purposefully a little high, so on those the invoice will often be less than the "guesstimate"

On some stripping jobs, I murder the estimate by a substantial amount, so if the install goes well, I'll reduce the invoice.

The law of averages is a good thing to keep in mind, but so is customer relations and building karma. I'm not in business to be unfair to myself or my customers.



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Old 01-26-2012, 11:23 AM   #17
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I don't understand you knowingly walk away with money sitting on the table?
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Old 01-26-2012, 11:28 AM   #18
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Quote:
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I don't understand you knowingly walk away with money sitting on the table?
There are times when doing that will lead to more money on the table.

Pat
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Old 01-26-2012, 11:36 AM   #19
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Originally Posted by ewingpainting.net View Post
I don't understand you knowingly walk away with money sitting on the table?

My life is not based on money alone. I'm sure it's an odd concept to many, but I learned long ago it wasn't something that was going to dictate my every thought.



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Old 01-26-2012, 11:55 AM   #20
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There are times when doing that will lead to more money on the table.

Pat
Leaving money on the table will lead to more money on the table? How? I can see it will give the client a feel good moment, but who to say they wouldn't have used you again because you are a professional, who delivers a quality product in a productive manner. I would rather build on that than lower cost.
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