[vermontpainter]

NEPS,

But the real issue is: in general there is no "market price" for the work we do. There may be something approaching that in certain segments, but certainly not in the residential repaint segment. New construction seems to have a narrow range-- which one might call a market price-- but even this isn't a rigid number. I may be wrong, but I think Scott to attest to this.
Brian Phillips

Alot of our experience as a company is in ultra custom new construction. I dont know that I would describe it as a narrow range, but it definitely is a niche market and every one of them is unique. Sometimes in my job costing after a project, just for poops and giggles I will figure out the s.f. cost (which is irrelevant to any estimating). It is astonishing and varies greatly from one to the next. Far beyond what most would think could be sold. When guys post about s.f. rates of $1-2 it makes me sick to my stomach to think of trying to run a business that way.

As to market value and pricing, I have only seen cases where it would apply in large cookie cutter developments where every house is exactly the same. In those cases, there is a range usually dictated by the developer and they are presented to painters as volume opportunities. Inexperienced guys will look at it and say: "there's 300 houses and I can make $600k in the next 18 months..." Never figuring out that it will cost them $800k and put them out of business. Developers are smart that way. A good paint company has to be smarter.

If NEPS is suggesting that in a tight market we should be re-evaluating our overhead costs and profit goals, then I would agree with that. If we are running 40% profit in a "fat" market, it may be tough in some areas to fly that right now. It does seem to be important to anticipate and adapt to whats going on. That doesnt always mean lowering our goals, it could also mean expanding our services and markets.

 

[vermontpainter]

That all.

It can be very simple. A basic example is, in my case, I learned alot about pressure washing here on painttalk over the winter and came out in the spring and really ramped up our offerings in that department. That brought revenues that I wasnt going after previously. I want to build on that. In the past I would have declined calls for deck washing and refinishing, now I see the potential of that service. String together a few little things like that and you can compensate for a sluggish commercial or new construction market right now. Do a bang up job on the deck and next month you may be back doing the whole interior. Etc. etc...This may be old hat to alot of guys here, but it was news to me and this sort of thinking has impacted my business this year.

 

[vermontpainter]

However, if you supply something that is not a commodity (such as Scott) then you can command a higher price. But that's really a different issue.

Thats what has been interesting as we have dabbled more in scrape and prime exteriors or pressure washing - markets we had mostly ingnored in the past. Finding price points and figuring out how to deliver superior service and value in new to us areas is really interesting. I do find that its possible to win jobs with high prices in other areas. The more I explore, I realize that presentation and how we sell is key.

If you are saying that we should monitor our overhead and cut the fat, then I agree. But we shouldn't need our customers or competitors to be telling us that.

Knee jerk reactions and desperation moves only prolong the agony. It has to be methodical and driven by our goals. Gmack and I are in the same exact market and we were just discussing today how things are more competetive and closing is more difficult. We both vow to not be put in a position of buying jobs. Thats the choice.