Gutting a business for pipes...how much to charge?

Originally Posted by bigburtchino

Scrappah - I do agree with you about property owners acting as their own contractor. Almost the stupidest thing a property owner can do. Hire a construction expert, release contractor of all liabilities, discourage the expert from utilizing his years of working knowledge. I would ask the property owner why did you call me if you already know how to build it? I would move on to the property owner that needs me to help him do it right!

I dunno .... I'm dealing with a lot of idiots lately. The customers that are good are better than ever. The ones that have been moderately difficult in the past have become almost intolerable. At first glance i would have to ask myself if i'm doing something wrong but it seems to be more widespread. Been networking with the other trades and they've been running into the same problems as well. One very successful roofing contractor with excellent customer skills that i know of closed his doors last fall. When i asked him why he said " These people are crazy ! I can't take it anymore. They will put me in an early grave. "



I've got a past customer that was pretty decent. All around good to deal with but a bit promiscuous. For some unknown reason she has to shift to shift from one contractor to the next. She called me in again last month. Her last carpenter bailed halfway through the job. Mulled it over for a week or two and decided that enough of the red flags were up & took a pass on the job. It's overall good work but the warning signs are there. It was probably a good call. About three weeks later she had somebody working there that she had imported from 500 miles away. Apparently she had burned through all of her local options ?

Anyway, i've got a ton of war stories but there's one point that i really would want to emphasize:

Learn how to size your perspective clients up before ever setting foot on a job. Know what to expect from them before hand. Know yourself. Work within your range. Know what you can deal with and what you won't be able to tolerate from a customer.

It only takes one bad job to put you under. There's no shame in taking a pass on a job where you're out of your depth. It's terrible to say, but if you have to ask advise on how to bid a job then you probably don't know what you're doing.

Bear in mind ..... you have a moral & legal responsibility to follow through once you place a bid on a job. No excuses allowed.

Originally Posted by BurlyGuys

OUCH! Well, you're probably right about the not knowing what I am doing part, except that I know how to do a room, and I know how to do a house. this is simply a matter of degree. and I bid the job so high I probably won't get it anyway.

I'm sorry .... i really wasn't meaning to single you out. It was meant more as a general warning to anyone that's thinking about doing bid work.

As a general rule of thumb: You should have at least twice the amount of your bid as liquid cash asset. If you do a bid for 20 k. you need a 40 grand capital reserve fund so that you don't run into cash flow problems.

The construction biz is definitely high risk. Sometimes the owners acting as their own contractors go into bankruptcy halfway through the job and you get burned.

Could you sustain the loss ?

Originally Posted by BurlyGuys

The way I have it bid would be in payments at certain points of the job, with a 25% deposit to start. Don't think I could get hurt too badly.

I hope it all goes well. It probably will.

I've had a rough time doing bid work since the recession hit. It used to be that 90 % of my customer inquiries for a quote price on a job panned out. Post recession, it flipped the opposite way and 90% of my quotes didn't result in a job.

That makes it difficult because i'll have as much as a day in the office generating paperwork when i could be out on a jobsite somewhere making money.

Not quite sure what's going on there. I know in some cases they're just window shopping. In other cases i suspect they pedaled my quote and went with the guy that said he would do it for a couple of hundred bucks less. It's kind of a race to the bottom where some guys will do it on a break even basis just to keep their men working.

My feeling at this point is that it's like the old advertisement in Travel & Leisure magazine. There was this picture of a really nice high end motor home. The caption below read: If you have to ask you can't afford it.

I've had more luck simply selling skilled carpentry work by the hour. It's not huge profit potential like the quote work, but you pick up a grand here and a couple of grand there. It's nearly clear profit with minimal risk. If you bill out every seven to ten days the cash flow is good as long as the work is there.

The thing i've found is that you tend to get "mission creep" on the jobs where the owner feels most in control of how the money is being spent. When they can see that they are "paying for what they get & getting what they pay for" they seem to relax a bit and aren't quite so concerned about doing everything on the cheap. It becomes a win/win. They feel they're getting the best value for their money. Your jobs tend to "upsell" themselves without any effort because it's coming from the customer's own initiative.

With bid work it seems to be more of a tug of war where one side wins and the other side loses.

Anyway ... Just random stuff for whatever it's worth. The laws vary from place to place so if it's over a given amount there's no other option than to write up a legal contract with a set price for the work. Providing a written estimate & billing T & M every week won't play.