To compromise, or stand pat?

[glkearns]

Over the past couple of weeks, my best (by far) client that i do on average 2 kitchens, and 3 bath remodels a month has been bustin my chops on my pricing. I feel that I am giving them a fair deal, with excellent service.

The last few jobs that i have bid have been bid, reduce scope/price, then a call begging to sharpen the pencil some more. No problem with that.

Two jobs in particular however, I have gotten phone calls, explaining to me that if I couldn't shave my pricing some more that they were going to have one of their carpenters(that can do plumbing) take care of the plumbing.

So I told them that i could no way compete with in house plumbing, and if i did I should just go hire on somewhere, they said that they still wanted me to do the plumbing, but felt that my pricing was taking them right out of the job. With the price of gas, copper always on the rise, my pricing has stayed pretty consistent over the course of the last 3 years.

So, get a call today, asking where revised bid xyz was and answered that i wasn't aware that there was a scope change, and the answer was that there was no scope change but needed to sharpen pencil. so I open the bid up and it is for a slab bath/laundry remodel, laundry converts to stacker, shower where toilet was, toilet where laundry was, and new lav in slightly new location. I look at my bid and it's a little higher than normal and decide that i can reduce it by 15% plus travel charges. give a phone verbal and they still think its too high. want it down an additional 15%

My choices at this point.
1. Stand pat and see how well their "in house plumber" does
2. try and compromise between their # and my reduced number( and put some qualifications in the contract about down time due to pizz poor planning, other things out of my control
3. Agree to their price and give them a blanket qualification that any hidden conditions will be extra.
What their price covers is 3d labor and material...Near as i can tell from the sketches is in an ideal world it would be just that, but there is no room for error in scheduling, design changes which this outfit does alot, taking into consideration the bad fitting causing a 1h each way for parts...

Im thinking to just compromise between my revised number and there "goal' number, but on the other hand, i really don't want this contractor testing the waters in this economy either.

Any thoughts?
Greg

[Service Guy]

1. Stand pat and see how well their "in house plumber" does

Don't negotiate. It sounds like, you are giving them the fairest price you can already.

[Devine Plumbing]

Tell them a price and be done with it. There are still a lot of people out there with money and they are not afraid to spend it.

[ToUtahNow]

Our biggest Property Management account came to me about 7-years into our relationship and told me he felt he paid us awful well for the work we were doing. Keep in mind this is a hands on multi-millionaire. I worry about losing his work for a glancing moment then told him I felt we did an awful good job for the price he was paying us. That was 20-years ago and he is still the shops largest property management account.

When in doubt read my signature line.

Mark

[Service Guy]

Our biggest Property Management account came to me about 7-years into our relationship and told me he felt he paid us awful well for the work we were doing. Keep in mind this is a hands on multi-millionaire. I worry about losing his work for a glancing moment then told him I felt we did an awful good job for the price he was paying us. That was 20-years ago and he is still the shops largest property management account.

When in doubt read my signature line.

Mark

:thumbup2: A wise businessman.

[JCsPlumbing]

Each man's situation is different. Can you stand to lose every bit of this work tomorrow? If so, let them go.

Alot of GC's or companies will try to beat you down no matter what. "$10,000.00. That's too high. $1,000.00. That's too high." They want you to subtract 15%? Are they subtracting 15% from their contract to the homeowner? Ask them.

When I've let people like this go on my terms I've been the happiest & most successful.

You might gain some time on your end to get new business or find ways to save more of what you make with your existing business.

Oh. And if they want to play hardball on the pricing, turn the carpenter in for doing the plumbing. Right thing to do anyway.

Either way, do what's best for you and your family. Good Luck.

J.C.

[glkearns]

Thanks for the fast replies. The only thing that concerns me is the risk of losing the long term client...Guess the right way to look at it, is they're losing my services.
greg

[PLUMBER RICK]

greg, do you really think the carpenter is going to do a job to your level?

is it getting inspected?

#1 stand firm and be ready to bail him out for a premium when the carpenter gets in over his head.

i should share the photos of the last generals work. where the carpenter was the plumber, electrician, drywaller and tile man.

can't share them yet as the contractor has 2 choices.

fix it

or tell it to the judge and contractors board.

rick.

[glkearns]

Each man's situation is different. Can you stand to lose every bit of this work tomorrow? If so, let them go.

Alot of GC's or companies will try to beat you down no matter what. "$10,000.00. That's too high. $1,000.00. That's too high." They want you to subtract 15%? Are they subtracting 15% from their contract to the homeowner? Ask them.

When I've let people like this go on my terms I've been the happiest & most successful.

You might gain some time on your end to get new business or find ways to save more of what you make with your existing business.

Oh. And if they want to play hardball on the pricing, turn the carpenter in for doing the plumbing. Right thing to do anyway.

Either way, do what's best for you and your family. Good Luck.

J.C.

OK for GC to do plumbing in house, ask toolaholic about the 3 trade rule. This contractor is about 60% of my business annually, so losing the client would pretty drastically change my business(and hurt financially in the short term), maybe now is the time to get into service and repair?

Greg

[Service Guy]

OK for GC to do plumbing in house, ask toolaholic about the 3 trade rule. This contractor is about 60% of my business annually, so losing the client would pretty drastically change my business(and hurt financially in the short term), maybe now is the time to get into service and repair?

Greg

I am not nearly as experienced in the construction business as some of you. However, one big reason why I chose service early on, and why I focus 100% on service....the money is better, far less negotiating.:thumbup2:

(of course it also fits my personality better, plumbing service has a whole different set of problems associated with it)

[glkearns]

greg, do you really think the carpenter is going to do a job to your level?

is it getting inspected?

#1 stand firm and be ready to bail him out for a premium when the carpenter gets in over his head.

i should share the photos of the last generals work. where the carpenter was the plumber, electrician, drywaller and tile man.

can't share them yet as the contractor has 2 choices.

fix it

or tell it to the judge and contractors board.

rick.
I laughed about that myself, the answer is clearly no it won't be done to my level, and I probably would be getting the call for the bail out. Not sure if its permitted or not.

Thanks again everone for the replies
Greg

[JCsPlumbing]

Understand. Gotta say I stick by my earlier post. You've got to crunch the numbers and know what you and your family can tolerate. Sometimes you have to do things that are unfair or you don't want too for the sake of your loved ones.

I hope you are able to get what you deserve for your work. From this person and all of your new business.:)

J.C.

[glkearns]

Thanks JC, definantly tough times out there. Is it the same for you service guys, or is it kind of steady as she goes for you guys?

Greg

[Service Guy]

Understand. Gotta say I stick by my earlier post. You've got to crunch the numbers and know what you and your family can tolerate. Sometimes you have to do things that are unfair or you don't want too for the sake of your loved ones.

I hope you are able to get what you deserve for your work. From this person and all of your new business.:)

J.C.

So much love in this forum....its really like a band of brothers. Brings a tear to my eye.:crying::hug::D

[ToUtahNow]

Thanks for the fast replies. The only thing that concerns me is the risk of losing the long term client...Guess the right way to look at it, is they're losing my services.
greg

One of many businesses I've had over the years was a security guard business. My partner sold a monster account which required 20 guards 24/7. When I reviewed the contract I realized the price he agreed on was $2 per hour below our cost. When I tried to explain it to him his answer had something to do with volume. My point is you need to run the numbers and see if they work for you. Unless you are already charging your GC more than the work is worth you will be giving him the profit off of your job.

Mark

[JCsPlumbing]

Thanks JC, definantly tough times out there. Is it the same for you service guys, or is it kind of steady as she goes for you guys?

Greg

I've always done both. So things have fortunately been steady.

J.C.

[glkearns]

One of many businesses I've had over the years was a security guard business. My partner sold a monster account which required 20 guards 24/7. When I reviewed the contract I realized the price he agreed on was $2 per hour below our cost. When I tried to explain it to him his answer had something to do with volume. My point is you need to run the numbers and see if they work for you. Unless you are already charging your GC more than the work is worth you will be giving him the profit off of your job.

Mark
Different words than my wife used, but exactly the same point. She thinks i need to put my foot down too(in a nice way)
Greg

[Devine Plumbing]

If one person is providing 60% of your income, it is time to get out there and do something. That is almost like having all of your eggs in one basket. If that contractor goes belly up, you are in the same position.

[Service Guy]

Good luck Glkearns. I wouldn't recommend switching to service and repair and this point. Its totally different business model. Its like starting over almost. I can't imagine trying to switch over to construction plumbing, it would take me at least a year to shift gears.

[Devine Plumbing]

So much love in this forum....its really like a band of brothers. Brings a tear to my eye.:crying::hug::D

Can I be part of the brotherhood? Please, please, please

[JCsPlumbing]

If your wifes behind you and the numbers support it. Stand firm. I've seen businesses that take the work for nothing thinking they're "gettin' rich". Get new trucks 6 months to a year into it.

Then out of business in 2 to 3 years.

Seen it more than once.

J.C.

[Service Guy]

If one person is providing 60% of your income, it is time to get out there and do something. That is almost like having all of your eggs in one basket. If that contractor goes belly up, you are in the same position.

Good point, this exact thing happened to a plumber I know.

[ToUtahNow]

Can I be part of the brotherhood? Please, please, please


With all due respect for a guy who should be skirting the shadows you sure put yourself out there.

Mark

[JCsPlumbing]

Good luck Glkearns. I wouldn't recommend switching to service and repair and this point. Its totally different business model. Its like starting over almost. I can't imagine trying to switch over to construction plumbing, it would take me at least a year to shift gears.

They are different animals. Both take awhile to get the hang of and then you never stop learning.

J.C.

[Service Guy]

Can I be part of the brotherhood? Please, please, please

Of course you can brother, but PLEASE work on getting your license, instead of snubbing your nose at it.

[Devine Plumbing]

Of course you can brother, but PLEASE work on getting your license, instead of snubbing your nose at it.

See, now you have me all wrong. I am in no way snubbing my nose, at anything for that matter.

[Service Guy]

See, now you have me all wrong. I am in no way snubbing my nose, at anything for that matter.


So you are rethinking the statement you made that red-flagged you? ->
You guys all sound like a bunch of whiny cry-babies. If he is doing plumbing, regardless of whether or not he has a license, he will either go out of business because of inferior work, or he will be a success because of his superior work. If that is all you have to worry about you need to do something to make yourself a little busier. Either way, none of you have any business sticking your nose into his. You guys all sound like a bunch of tattle-tale snitches. Let the Mexican make a little money.
__________________

[DuckButter]

Greg, if I recall correct..you had another GC kick you to the curb maybe six months ago.

This tells me one of two things..
You're prices are high..or you have a good nature and GC's take advantage of it with bluffs.


I DO know that taking 15% off your price twice over would have me questioning whether I could affrord to work at that rate.

I understand it's 60% of your business, but you really need to crunch numbers and see what that leaves you...might not be worth fighting for in the longrun.

Also, once you cut your price, it's permanent and he'll expect that from now on.

I am baffled at that stupid 3 trade rule...it's an insane hobbling of our trade in your state.

[glkearns]

They are different animals. Both take awhile to get the hang of and then you never stop learning.

J.C.


I've done both, just got deeper into remodeling, and really don't advertise at all, do maybe 2 service calls a week as time permits. i guess my statement before should have been switching my focus to service/repair. And filling the time with remodeling as it comes in at the right price.

Greg

[drtyhands]

Everyone in the wood construction is hurting...Bad.Only major wood I see going up in a 50 mile radius are LARGE condo projects.I know the plumbing contractor and even those he had to give away to keep the guys busy.Housing and remodel plumbers are having a hard time.This is the nature of the beast.

There will be companies in this hard period that WILL out bid you,a lot if them.They are trying to stay afloat as well.


If you are truely as low as you can go.Then stick.

[JCsPlumbing]

Then go get some service Greg! Stand firm on your price (if you know it's fair) and then let them go based on what all have said.

Even if you part ways, customers often come back when they try out the new person and see their mess!:eek::eek::eek:

J.C.

[ToUtahNow]

The remodels or new construction we did were mostly large homes (10-12 bath). On many of them the owner had a designer and I believe the record on roughing in a master bath was five times before the slab was finally poured. Each time it was a complete change of plans so none of the old (new) stuff could be salvaged. On those projects we were strictly T&M which actually ended up cheaper for the owner as there was no contingency built in.

Mark

[Devine Plumbing]

Yea, remodels kinda suck. I don't mind doing new construction, or service. But everyone on a remodel wants you to put a new coat of wax on a turd, but in the end it is still a turd, just a bit shinier. And then they look at you funny expecting something different.

[glkearns]

Greg, if I recall correct..you had another GC kick you to the curb maybe six months ago.

This tells me one of two things..
You're prices are high..or you have a good nature and GC's take advantage of it with bluffs.


I DO know that taking 15% off your price twice over would have me questioning whether I could affrord to work at that rate.

I understand it's 60% of your business, but you really need to crunch numbers and see what that leaves you...might not be worth fighting for in the longrun.

Also, once you cut your price, it's permanent and he'll expect that from now on.

I am baffled at that stupid 3 trade rule...it's an insane hobbling of our trade in your state.

yes, called that Gc's bluff and havn't heard from him since, I know one thing is for sure, i'm not getting rich off of any of them. Another thing my wife told me tonight when i was talking with her about it, was me being too nice of guy. Even with the last contractor that bailed, everything was ok, but now the economy is just not looking good as far as the remodeling goes...Basicly working at their "ideal number" after everthing is said and done i think Id make wage, and if I wanted to make wage I would close shop and go work for someone else. Guess I need to stand up for myself, and the value of my company, and if they want to do it in house, I'll be there for the bail out, and if none's necessary, I will be all the more available for someone else.

thank you all, my wife will be happy to know that the pros here agree with her. I need to charge for the service I provide and for the expreience i bring, if they don't want to pay my price, then someone else will.

greg

[JERRYMAC]

TRY ASKING YOUR MORGAGE BROKER TO DROP THEIR RATES 15--30%
OR ASK THE GROCERY STORE OR DOCTORS OFFICE
EXPLAIN THAT TO YOUR G/C
AND WHILE CA. HAS THE 3 TRADE RULE HE STILL NEEDS A C-36 OR SUB. TO A C-36 IN ORDER TO BE LEGAL I KNOW BECAUSE I HAVE BEEN ON BOTH SIDES OF THAT FENCE :rant-off:

[JCsPlumbing]

Yea, remodels kinda suck. I don't mind doing new construction, or service. But everyone on a remodel wants you to put a new coat of wax on a turd, but in the end it is still a turd, just a bit shinier. And then they look at you funny expecting something different.

Exacly what we expect from you.:lmao::lmao::lmao:

J.C.

[drtyhands]

The remodels or new construction we did were mostly large homes (10-12 bath). On many of them the owner had a designer and I believe the record on roughing in a master bath was five times before the slab was finally poured. Each time it was a complete change of plans so none of the old (new) stuff could be salvaged. On those projects we were strictly T&M which actually ended up cheaper for the owner as there was no contingency built in.

MarkI think it would be hard,if not imposible for his general to sell T+M to a homeowner in these times.

[glkearns]

I may offer T/M not to exceed my price, then I know I would be covered, It won't fly though, they want to have the costs nailed down. I have a phone meeting about it in the AM, and my position will be I can do it for my orig. price less the 15% but that I can't/won't do it for their price. i'll also let them know that I'll be there if something goes wrong on their install, for a fee of course!

Greg

[JCsPlumbing]

Too nice for me. But good luck.

J.C.

[ToUtahNow]

I think it would be hard,if not imposible for his general to sell T+M to a homeowner in these times.

No doubt, it takes a certain clientele to do a $12,000,000 remodel on T&M. What was worst is some of the designers were getting paid 50% of the final cost for their services.

Mark ;)

[Devine Plumbing]

Tell them to kiss your @$$. LOL

[glkearns]

Tell them to kiss your @$$. LOL

Not my style.

[Watersurgeon]

Greg:
I hope this post by me will help you, because I have "been there, Done that."

Incase you have not seen my previous posts.

Rule #1:
"You’re a salesman first, and tradesman second."

Rule #2:
"Something of nothings is...........Nothing"

One of my first big military bids was literally awarded too me because I was half way out the door.

I designed engineered a military project years ago. I knew that this particular project was at the top of the DOD list of things to do. The design we did was of a high purity water treatment system for a critical plant operation. We made the system redundant. I emailed the bid specs to the GC. They called me into a meeting a few days later. I got told that my portion of the bid was too high and that I needed to cut out the Redundancy system if I wanted to be part of the bid.

Coming from a military family and understanding how the they work, I told the GC I would not remove any part of my system proposal. I thanked them for the opportunity, shook hands with everyone in the meeting and proceeded to walk out the door. I had the handle turned, and the door opened about 1/4 when the key person for the GC told me to stop. They would except my bid at face value. The end result the GC was awarded the contract and the D.O.D was very happy with what they got.

You must know your profit margin first. The only time I am willing to compromise a profit point is if we are attacking a project we have never done before. I call this a learning curve experience. If we break even on something we have never done before then that is a good investment for any future jobs.

Only you know your profit break even point. Under no circumstances should you compromise that unless you know it will make you additional monies in the future.

I will say that throwing all your eggs in one basket is not a good idea. This GC gives you 60% of your business. No wonder the S.O. B. is grinding you. Why because he knows he can. Believe me if he was ten or twenty percent this topic would not be discussed.

I would highly suggest that you start marketing your company to other GC’s.

Remember this golden rule, " A good salesman could sell refrigerators to Eskimos"

[Devine Plumbing]

Not my style.

Not really mine either. However, I would feel insulted if someone asked me to drop my price by almost one-third. That is just a lose-lose situation. If you do they will feel that you have been robbing them on all of the work you did in the past. You will not feel good about the job, nor will they. Having the audacity to ask for that type of discount after you generously offered 15% is ridiculous. Unless of course your prices are way out of line with those in your area. Dropping your price by 30% means you just have to do 30% more work to make the same amount of money. Considering they are 60% of your work assumes approximately 24 hours a week are spent working for them. That computes to around 1200 hours a year. You will have to work an additional 360 hours to make the same annual income, plan on about 9 additional weeks of full-time work for that company per year to make the same amount of money. Ask any of them if they want to work pro-bono for over 2 months?

[HouseOfAtlas]

Greg:
I hope this post by me will help you, because I have "been there, Done that."

Incase you have not seen my previous posts.

Rule #1:
"You’re a salesman first, and tradesman second."

Rule #2:
"Something of nothings is...........Nothing"

One of my first big military bids was literally awarded too me because I was half way out the door.

I designed engineered a military project years ago. I knew that this particular project was at the top of the DOD list of things to do. The design we did was of a high purity water treatment system for a critical plant operation. We made the system redundant. I emailed the bid specs to the GC. They called me into a meeting a few days later. I got told that my portion of the bid was too high and that I needed to cut out the Redundancy system if I wanted to be part of the bid.

Coming from a military family and understanding how the they work, I told the GC I would not remove any part of my system proposal. I thanked them for the opportunity, shook hands with everyone in the meeting and proceeded to walk out the door. I had the handle turned, and the door opened about 1/4 when the key person for the GC told me to stop. They would except my bid at face value. The end result the GC was awarded the contract and the D.O.D was very happy with what they got.

You must know your profit margin first. The only time I am willing to compromise a profit point is if we are attacking a project we have never done before. I call this a learning curve experience. If we break even on something we have never done before then that is a good investment for any future jobs.

Only you know your profit break even point. Under no circumstances should you compromise that unless you know it will make you additional monies in the future.

I will say that throwing all your eggs in one basket is not a good idea. This GC gives you 60% of your business. No wonder the S.O. B. is grinding you. Why because he knows he can. Believe me if he was ten or twenty percent this topic would not be discussed.

I would highly suggest that you start marketing your company to other GC’s.

Remember this golden rule, " A good salesman could sell refrigerators to Eskimos"

I just had to say that this was a great post! If the GC KNOWS that he gives you most of his work, then he KNOWS he has the upper hand. In the future, he'll probably want you to cut costs again, and again, and again.

You can be a nice guy, but being nice doesn't pay the bills. People will take advantage of you if you are "too nice". It's just a fact of life. I know there are plenty of nice guys here on the forum, but they don't work for free.

Good luck to you :)

[ozplumb]

At the end of the day mate you have to keep it worth your while. I once had a builder ask me to bail him out on several houses years ago and I worked on a flat day rate and went backwards severely in doing so! Dont let these cock sure wankers tell you how much your worth. Will they remember you when they are putting more and more money away after profiting extra because of your cuts in your rates. Work a few more and pull the rug out from under them when you have other options to fall back on!!!!!!!:mad:

[Australian Plumber Josh]

I’m always nervous when builders start pressuring for lower prices. You have no way of knowing the builders financial position, and if they get into financial trouble you are almost at the bottom of the creditor totem pole.

I would rather stay home and make no money than work for free.

[Plumbus]

The following words are attributed to John Ruskin. Some say he never wrote them. I say, "I wish I'd written them".

It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money -- that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot -- it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.

The buyer's of services will always want them for less. That's how most people are wired. Earlier in my business career, I was susceptible to such pressure. No mas! Now, for example, whenever I happen to cross paths with my biggest customer by dollar volume, he brings up the price argument. Without hesitation, I answer with, " I guess you're just going to have to get another plumber". If his customers are questioning why his plumber costs so much, it's his problem, not mine. He's got to do what's best for him. My statement to him speaks volumes for what's best for me.

Lowering your price is a slippery slope. If you're not working, you'll go out of business. If you're working too cheap, you'll go out of business. It'll just take a little longer, and hurt a lot more.

As a signatory (union) contractor who specializes in residential construction, I know a little about being too expensive. If the quality is there, the work will come. I know there are plenty of people in the Napa area, as in all areas, willing to pay for plumbing excellence. You just have to find them, and then, keep them. If it means tightening your belt over the short term, I hope you can manage it. It's time to diversify. Start working on your business, not in your business. The process is never ending. It applies to me as well as you.
Good Luck,
Scott

[ToUtahNow]

I am a little concern you would have 15% to give back to the GC to begin with. If your bid is cost plus 10% profit and 10% overhead giving back 15% means you are working for free.

Mark

[HouseOfAtlas]

I am a little concern you would have 15% to give back to the GC to begin with. If your bid is cost plus 10% profit and 10% overhead giving back 15% means you are working for free.

Mark

Mark,

I never have done large bid jobs, but when you say "cost plus 10% profit", what is the meaning of profit to you? Do you pay yourself a certain wage and then add 10% onto that? Or how does that work?

Thanks for any clarification you can give me :)

By the way, sorry for hijacking this thread.

[ToUtahNow]

Mark,

I never have done large bid jobs, but when you say "cost plus 10% profit", what is the meaning of profit to you? Do you pay yourself a certain wage and then add 10% onto that? Or how does that work?

Thanks for any clarification you can give me :)

By the way, sorry for hijacking this thread.

It is not something you would do with service calls but you basically figure out ALL (material, trucks, insurance, labor, supervision, contengency, fuel, waste, cartage, design, permits, shop, etcetera) of your costs associated to do a job than you add an additional 10+10 on top of that.

Mark

[tinmack]

Walk away.

Tell them thanks, but no thanks, keep me in mind for future jobs.

But walk away.

I agree with ToUtahNow.....cost plus 10 percent is losing money. In my business, we call them par deals. You always lose on par deals because there's only 10 percent in them.

If they're trying to weasel a deal out of you BEFORE the job starts, they'll try and screw you during and after the end. They'll want you to throw some extras in, cover some unforeseen stuff, whatever.

In the end, you'll be just as far ahead walking away before even getting started. If I'm gonna make ZERO, I'd rather do it when I'm sleeping, rather than after putting in a week of 12 hour days.

There's too many individual homeowner jobs out there that have higher profit margins and less hassle. They'll pay more and be happier and throw you some more business. Cut to the bone jobs just get you more cut to the bone jobs. A year or two down the road, they'll dry up because they want the earlier, cheaper price.

I deal with individual homeowners mostly. The commercial jobs for me are a roll of the dice - some come in, most don't. The ones that do come in, I make out like a bandit.

In my experience, hagglers are never happy. You could give it to them for free and they'd STILL haggle.

Besides, existing stuff is always easier to deal with then new construction. Too many variables that can change from blueprints/costing phase to construction phase. Stuff that can cost you time and money.

If they wanna play, they gotta pay. And if you aren't making money at it, they're playing YOU......

Just my 2 bits..........

[DUNBAR]

This would be an easy one;


Tell them as of today that you will no longer be their plumber, that your commitment is to complete any existing projects with them and insist that they seek the employment of another plumbing company.


This is a golden opportunity to grow some balls and see outside the realm of a bottom feeder company that has you going in reverse....not forward motion with today's expense schedules and taking discount work is something they must expect from you to begin with, otherwise they wouldn't be hammering you to drop.

You know damn right well they don't have a plumber beside thee quoting against you. Stab back and shut down your relationship.

When you act like you need them more than you need them, you put yourself in a very bad position as a business owner. You're a damn plumber ffs! Drum some work which won't be a problem and get out there and find somebody that isn't starving you out because you are allowing them to do so.

Stick up for yourself because no one else will. I for one won't comfort and console you on this matter because I've been in that boat before and laid down. There's a time when ALL good things come to an end and this isn't a good thing anymore.

Look outside the situation and you'll see that there's a ton of opportunities waiting.


All my pricing has went up in the past month. Everyone is holding with me and I'll be damned if I take a paycut for anyone in this time of the game.


There's no love lost when you kill the source of a growingly bad work relationship......whether you're mesmerized by the constant draw of money or not. Sell fruitcakes on ebay to get by but stand up for your reputation and make a wave.

[HouseOfAtlas]

It is not something you would do with service calls but you basically figure out ALL (material, trucks, insurance, labor, supervision, contengency, fuel, waste, cartage, design, permits, shop, etcetera) of your costs associated to do a job than you add an additional 10+10 on top of that.

Mark

Thanks, Mark. I appreciate the explanation :)

[SlimTim]

What are you compromising with? Your family's standard of living? "Sorry son, those braces have to wait 'cause dad had to come down 15% on a big job."

Your profit margin is important of course but never come down enough to where it cuts into what you have determined your personal pay must be.
I personally seldom add less than 25% profit of the selling price (overhead plus direct labor plus direct costs divided by .75 NOT mulitiplied by .25).
That's profit for the business. My personal salary is non-negotiable and I make sure we live well.
You do damn important work and should be compensated accordingly.
Make sure you pay yourself what your dog thinks you're worth (ALOT)

In other words, know your breakeven point. Once you reach that, everything is coasting since all of your salary, insurances, downtimes, maintenance etc in figured into that. If you have to come off your profit a little, it's not a killer.

And in the GC's defense, if you have come down on your prices in the past he may think you have figured enough in to do that. You've trained him.

[Bogart]

Dude,
walk away, but do it in a polite manner. It's all business. A good friend of mine in HVAC got me into a school district as the plumber. The maintenance boss went to much bigger district and took me, but cut my buddies throat. He played it cool for two years, I called him and said that the time was ripe, he called the maintenance boss and is now doing the HVAC at the new district. The funny thing is, he is now at both districts and I got my throat cut at the old district! My HVAC buddy and the maintenanace boss act like nothing happened, and don't talk about it. So, stay professional, and remember, it's business. I plumb for anybody that pays. Except last night, I was on an emergency call at a national seafood chain. I hadn't had my supper yet, I got all greasy and nasty fixing a water leak, right next to the broiler, so it was hot as hell. Fix that, start popping a cleanout because a drain backs up occasionally. The shift manager comes up and in a snippy manner demanded to know what I was doing that for. I replaced the plug, put the cover back on and told her I wasn't doing nothing now. That felt great.

[Service Guy]

Re: Bogarts' post.

I have quite a bit of experience servicing restaurants, and it seems the big, corporate franchises are the worst to work for.

[Chauncey]

The GC is definitely not cutting his price to the HO. He has found that your easy to get over on. The GC just sounds like he is a greedy sob. Stand pat, if his guys do it with out proper permits turn them in. If you want to work for free my company would be glad to hire you.

[DuckButter]

Been biting nails over this thread.
Greg, I really hope things turned out ok, let us know...if things didn't go well I think we could all cough up some decent idea's for you to market/advertize as a service company.

[ToUtahNow]

Been biting nails over this thread.
Greg, I really hope things turned out ok, let us know...if things didn't go well I think we could all cough up some decent idea's for you to market/advertize as a service company.

It looks like some one forgot one of the first rules of plumbing.

Mark;)

[PLUMBER RICK]

that usually only applies to drain cleaners and service plumbers:eek:

new work is clean dirt:D

rick.

[Service Guy]

that usually only applies to drain cleaners and service plumbers:eek:

new work is clean dirt:D

rick.

Duckbutter does mostly service I think. I wouldn't want to bite his fingernails.:eek::lol:

[BHD]

you could compromise and tell him you went over your figures again and since he did not take there when it was first offered, some things have changed and it will now be 4% higher than the original bid, you gave him.

You know fuel, cost of materials, and over head and all, hey the price of primer is sky rocking as we speak. and if you do not jump on the job now and I can get a lock on the materials it may be more next time. this stuff made with oil is going out of sight.

[DuckButter]

It looks like some one forgot one of the first rules of plumbing.

Mark;)
Ever see that black ooze that sits in 60 yr old galvy drainage?
Goes great on whole wheat with a spoon of peanut butter...try it...mmmmm good.

[drtyhands]

Ever see that black ooze that sits in 60 yr old galvy drainage?
Goes great on whole wheat with a spoon of peanut butter...try it...mmmmm good.

I see you're getting your daily allowance of iron.Your mother must be proud.

[rombo]

I try to never move on my price. You do it once and people begin to expect it.

There is a restaurant I do work at, i made the mistake one time, cleared a drain charged him $150 he said it was to much so i agreed on $125. Now if i want to get $150 out of a job i have to tell him $180

[FINER9998]

GLKEARNS.....i am not a plumber. but as an owner of a couple of service based businesses, i would offer the following: 1)where do your prices stand in relation to your competitors? if you are significantly higher than most, you might want to consider how you want to position your business. high end, with the pack or "mr. cheapee bottom feeder go for the volume" market segment. 2) try to stay away from situations where any one customer becomes too large a part of your business. you definitely need to expand your customer base so you can afford to tell any one customer to find someone else.

as i said above, i am not a plumber. but the most successful plumbers and electricians i know put down their wrenches and wire cutters as soon as they could after they got their licenses and realized that their job was now sales, not pulling wire or fitting pipe. just my 2cents.

[DuckButter]

GLKEARNS.....i am not a plumber. but as an owner of a couple of service based businesses, i would offer the following: 1)where do your prices stand in relation to your competitors? if you are significantly higher than most, you might want to consider how you want to position your business. high end, with the pack or "mr. cheapee bottom feeder go for the volume" market segment. 2) try to stay away from situations where any one customer becomes too large a part of your business. you definitely need to expand your customer base so you can afford to tell any one customer to find someone else.

as i said above, i am not a plumber. but the most successful plumbers and electricians i know put down their wrenches and wire cutters as soon as they could after they got their licenses and realized that their job was now sales, not pulling wire or fitting pipe. just my 2cents.
I agree with all but going by the competitors rates.
For all he knows, the customer of his could be comparing him to a 22 year old kid still living at home who just got his license (being exaggerative there).
He has NO choice but to know his own cost of doing business, if he underbids by as little as a dollar an hour on labor, he's paying the customer to work, eventually he's out of business.
As for the other two points, excellent points...nobody should allow one customer to account for such a large fraction of their income, also as a business owner I know firsthand just how frustrating and confusing it is to juggle sales, estimates, records and bids on top of scheduling a weeks work.

[ToUtahNow]

When I first started out in HVAC I had a guy come to me an offer to give me an HVAC job on a 4-unit apartment building. He told me what the low bid of my competitor was and I found a licensed co-worker to do the job. I cut my competitors price by a couple of hundred and lost my butt by the end of the project. I later became friends of the lowest bidder and we talked about the job. That's when I learned he bid the job based on surplus material from another job. Just another reason to not bid off your competitors bid.

Mark

[FINER9998]

just to be clear on a comment i made previously, i in no way meant to imply that one should look at the lowest price of a competitor and as a matter of routine, seek to match or beat it. any market is made up of sellers of products and services and buyers of products and services. it is an extremely unwise business person who disregards knowing what his competitors charge for a similar service or product. without this knowledge, it is impossible to position a product or service within a market. price, as a business variable, is one of many variables that positions a product or service within a given market. the product or service could be targetted to a high end clientelle (one standard deviation or more to the right of a typical demand curve), it could be targetted to the majority of a given market (that nice, big fat middle portion of a demand curve) or it could be targetted to the bottom feeders(one standard deviation or more to the left of a typical demand curve).

it is obviously important to be knowledgeable regarding one's own cost structure as this information determines when a business begins earning a profit. but to adopt an attitiude that disregards competitors is to sacrifice potentially greater profitability by failing to exploit competitors weaknesses.

[atlas sewer]

i dont have the business experience as many of the other members do......but since i have plumbing experience and i have done new and service work..i know where your coming from greg........i think personally this gc is just trying to nickel and dime you the best way he can.....and yes if he chooses to have to get his in house carpenter to plumb it so be it but it occurs to me that if it is a job that requires a permit......whos pulling it for plumbing.......and if no one is then id expect a phone call to correct the other guys mistakes ....and yes greg charge for it...you might loose him ....but the other guys r right....there r plenty of guys out there that will pay and wont nickel and dime every bid you put in......as far as the service aspect id be more inclined to be doing more and more service calls until service was 60-80 % of your business....and i bet you dimes to donuts this gc isnt hurting for money ...since hes banging the other trades on the head to come in low and lower still im sure his wife is gonna like that great vacation there gonna go onb with the money saved from not paying his subs!!!!!!!!!

[DuckButter]

When I first started out in HVAC I had a guy come to me an offer to give me an HVAC job on a 4-unit apartment building. He told me what the low bid of my competitor was and I found a licensed co-worker to do the job. I cut my competitors price by a couple of hundred and lost my butt by the end of the project. I later became friends of the lowest bidder and we talked about the job. That's when I learned he bid the job based on surplus material from another job. Just another reason to not bid off your competitors bid.

Mark
EXACTLY my point...you never know what kind of overhead or stock costs your competition has.
If I'm in a region where one of my competitors is bidding KS faucet installs for $50, I advertize something else (and wait for him to go out of biz).
I might be bidding against a larger company the buys Delta faucets in large enough volume to get them at 50% of what I pay..if I try to match his price it comes off my labor and I'd make better money flipping burgers.
Greg may have some hard decsisons to make, the fact that Cali allows GC's to do 3 trades is heinous...this is a perfect example of why.
The company may likely take over the plumbing, then the local inspector takes on the role of plumbing instructor, it's wrong in my opinion.
As I see it, if they don't accept his price, he has NO choice but to diversify into either service or look into a niche that his shop can accomodate.
I dunno 'bout him, but I'd have ulcers by now.

[glkearns]

So, i stood my ground, basically calling their hand. turns out it was a bluff, and were just doing what everyone here has been saying, trying to beat me down to absorb some of MY profits...glad I stood my ground. Thanks everyone.

Greg

[drtyhands]

So, i stood my ground, basically calling their hand. turns out it was a bluff, and were just doing what everyone here has been saying, trying to beat me down to absorb some of MY profits...glad I stood my ground. Thanks everyone.

Greg
Glad you got the work.

[glkearns]

Glad you got the work.

Me too. Slow, does not even begin to tell the story of remodeling/additions up here.

Greg

[drtyhands]

Me too. Slow, does not even begin to tell the story of remodeling/additions up here.

Greg
I know,I'm sorry.I wish we did not have to go through this "cleansing period",but it will be so much nicer for you after the rats drown out.

[JCsPlumbing]

So, i stood my ground, basically calling their hand. turns out it was a bluff, and were just doing what everyone here has been saying, trying to beat me down to absorb some of MY profits...glad I stood my ground. Thanks everyone.

Greg

GREAT! Glad it worked out. Now try to spread your business percentages & pickup more service too.

J.C.

[DuckButter]

So, i stood my ground, basically calling their hand. turns out it was a bluff, and were just doing what everyone here has been saying, trying to beat me down to absorb some of MY profits...glad I stood my ground. Thanks everyone.

Greg
I feel like I just watched the Red Sox win the world series again...thats FANTASTIC news.

[Masterplumb]

I feel like I just watched the Red Sox win the world series again..

Ho-Hum:mad:

[DUNBAR]

I feel like I just watched the Red Sox win the world series again...thats FANTASTIC news.


Yes indeed.


But before the champagne bottle cork is popped, I'd be getting a backup line of work and quick if the income is needed.


Nothing lasts forever. :deadhorse:



Let's kill it again! :deadhorse:

[DuckButter]

Yes indeed.


But before the champagne bottle cork is popped, I'd be getting a backup line of work and quick if the income is needed.


Nothing lasts forever. :deadhorse:



Let's kill it again! :deadhorse:
Funny, I came back to this thread just to add that...he should learn from this and continue with any back up plans he may have come up with.
A stunt like that reveals alot about how dependant he is on the one contractor.

[atlas sewer]

greg im so glad it worked out for you............but give it a serious thought about diversifying as in getting more and more into service work......it will pay in the long run.......lots of luck....john c

[Vinko]

Tell them a price and be done with it. There are still a lot of people out there with money and they are not afraid to spend it.


I agree -- plus if you lower your price too much, you not only don't get a fair profit to which you're entitled, but you leave little room for contingencies...

Everybody wants a deal, but don't these guys realize that something's got to give when the price is lowered too much. I always want the other guy to make money. If he ain't, then I wonder how he's going to do the job he's been asked to do.

[DUNBAR]

On my product I'm toting now, I have a considerable interest in it now and I'm getting emails and phone calls, but they cringe when I tell them the price.

"Some" are telling me that I should lower the price to get that out there so people know.....


I say no, absolutely no because I'm not going to rent/lease out a $2000 piece of equipment for $100, no way.


I'd rather let it sit and collect dust before I come out giving good deals. That's would be my fast decline in my second biz. If I'm the only guy doing it, and there's no one else that has it.......price shop away because sooner or later you'll realize how valuable the product is, and what it provides.


"Too much" is what I'm hearing and I promise with gas prices as high as they are, I could lose my *** real quick when I figure in all the expenses surrounding the delivery, setup, come back and breakdown, get it all loaded back up and off to another.


It's a valuable lesson I'm learning real quick; don't bother with the little guy wanting a couple units......think big picture and do big events only, let the little guy find someone else to shop price on.

[Vinko]

It's a valuable lesson I'm learning real quick; don't bother with the little guy wanting a couple units......think big picture and do big events only, let the little guy find someone else to shop price on.


The flip side is this: sometimes its better to have 100 little guys as customers rather than 2 big guys. You lose one big guy, and there's 50% of your business. You lose a couple of little guys, less of a problem.

I am, in one sense, in the same boat as you. I've got some expensive products that I believe few can compete with. We've been in business 41 years, so by now people in the niche field sort of know about us, but still, it takes some education of the customer on the part of the sales man to explain why something that "looks" similar is not similar and deserves to be priced higher.

That said, and related to my first point, I've sold to a couple of big guys, and its good business, but it's not always all that its cracked up to be. They often pay on time, but the margin isn't as high and I've found that they chisel you on price as much or more than a little guy.