# Who pays for the little things?



## woodymayne (Jun 1, 2009)

Hello from Ontario (Toronto area)

I've been self employed doing handyman repairs/home improvements for about three years (seem to be attracting mostly bathroom Reno's right now). I did this as a side job for many, many years. I finally walked away from my day job, 35 years in printing. Just couldn't stomach turning old growth forest into tomorrows landfill (tens of millions of dollars spent on promotional material about whiter teeth and cleaner clothes, while a third of the world goes to bed hungry). Whoops, forgive the little rant there.

I took a huge pay cut, but I'm staying busy, buying new tools as I need them, and I seem to be keeping wolves away from the door. And *I really like what I do.* That's got to count for something.

I read Brian's post on "Pricing, Estimating and Success", Brian I thank you, your thoughts and the rest of the thread really straightened me out. 

I am having one persistent problem, that is how to word contracts and itemize items on the invoices. Sometimes I contract to supply labor only. I will provide materials as needed. I supply the client with copies of the invoices, add 15% to pay for my time, and they reimburse me. A lot of people like the transparency, they think it's an honest way to do business. On the other hand, too many people have complained that I shouldn't be charging for the little things.....screws, nails, framing materials on small jobs, fittings on small plumbing jobs, etc. I had a guy last week complain that I wasn't shopping around for deals......that he could get studs for $1.75 while I paid $1.99!

I've also tried the other approach, which is to contract for an all inclusive price. But it's too easy to miss little things while estimating, and wind up paying for them myself. And I've had a few people remark that because they don't know what I'm spending on materials, I could be screwing them over.

Is there a workable approach that will keep most of my clients happy most of the time? 

Having clients tell me they know a better way of doing something or a friend who can do it cheaper is probably something that gets under everyones skin once in a while, but that's another topic entirely. My skin has gotten just about thick enough that it doesn't bother me any more.


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## Mike's Plumbing (Jul 19, 2010)

Your problem is your still treating it like a side job, this is really amateur what your doing.

You bid a job and sell the package.....then you complete the job. Your digging yourself a hole then throwing the dirt in the hole while your standing in it.

Showing the HO's all your little invoices speaks volumes about your business. I would stop doing that and just bid the project and sell it to the right customers. 

Mike


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## Mike's Plumbing (Jul 19, 2010)

My last post sounded a little hash, i wasn't trying to be just so you know. I just don't know how else to say it. 

If customers are fretting over fittings and what you spend you have the wrong customers. Does that make sense?

Mike


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## Miss Brown (Mar 30, 2011)

They pay for the small stuff. Anything that gets used up, they pay for. Including dust masks! Including blades if the material you are cutting is going to eat them. Even if you already have a gallon of primer hanging around in your truck, they pay for it, unless the client is your mom. And if they want to source "cheaper studs" than they can spend a couple hours in traffic driving out to find them. Your time is more expensive than the savings of the studs. When they say, "I know someone cheaper." Say "That's great, use them!" And then they can pay you to fix it. 

I like "digging yourself a hole and throwing dirt in while you're standing in it." It's very true, but sometimes you get buried. Forget the small stuff, and you'll be 6 feet under your bills. Some jobs you can bid, some you can't. Maybe if you are a plumber you can bid them all, but if you're the plumber and everyone else, you either have to put your granny panties on (a bid to cover your ass) or you T and M for people who trust you. If they read it in a contract, they can't ***** about paying for screws later. Good luck!


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## Bweikel (Feb 20, 2011)

I agree with mike it sounds like your taking on penny pinchers. Work is great but if you can't make any money at it then why do it. 

I come across people like that all the time and while Iam still learning myself I try to read my potential clients and make sure that there not just out to pinch me to much and screw me out of house and home.some people are gonna try to get what they can and don't care.

If your doing cost plus jobs then maybe include in contract that material provided by contractor will be purchased from supplier of contractors choice( or something along those lines).Don t be afraid to lay out your terms you need to protect yourself.


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## Cole82 (Nov 22, 2008)

Miss Brown said:


> sometimes you get buried. Forget the small stuff, and you'll be 6 feet under your bills. Some jobs you can bid, some you can't. Maybe if you are a plumber you can bid them all, but if you're the plumber and everyone else, you either have to put your granny panties on (a bid to cover your ass) or you T and M for people who trust you.


 This is what I feel sets the real business away from the self employed. A business man and experienced contractor bids everything to cover there ass. A tradesman knows the work but forgets the smal details associated with the job. So they prefer cost plus and don't have to worry about it getting a bid right. You will never get very far ahead with cost plus. 

Cole


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## BC Carpenter (Dec 28, 2010)

I think you've got to figure out the way you want to run your business, IMO.

I think it's easier with a fixed price, work it all into your price with markup, and just present them with that price for labour and materials. To do this you have to know how to price/estimate the work you are doing, you may end up losing money on a few jobs, or at least not making a lot of profit.

I have repeat clients that I do small jobs for, and since I usually don't look at the work before showing up to do it, I do it for [email protected] a lot of the time. When I was first doing this I didn't bother billing for things like caulking and screws and the odd piece of drywall, I just figured "its four bucks who cares" this led to a 2500 worth of debt for the small stuff over six months to a year. Now I charge for absolutely everything. 

The kind of people who knitpick over small charges while not looking at the big picture: of a good job for a reasonable price, try not to work for these people, the cheapest people are also the most picky, in my experience.


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## fireguy (Oct 29, 2006)

My pricing depends on the job. On a large (to me) sprinkler job, I try to figure all of the material I need, including freight. Then I add some for small parts like Sammi's and redi-bolt. I add 3% for consumables like drill bits, saw z all blades, and tools lost in the attic insulation. Labor is more difficult, but do not forget the time to load material, set-up on the job, then clean-up and loading the van again, and unloading at the shop. For a small job, such as a chemical suppression system I add a dollar price for small parts like conduit clamps, S/S cable. Again, I figure loading, unloading, set-up and clean-up time. If the job is out of town, mileage, motel and meals are figured as an expense. 

Permit and inspection fees are always an extra charge. 
I was asked once last year to breakout my prices as to labor and material. I had done the work, passed the inspection and gotten paid. I never did justifiy my price.


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## Big Shoe (Jun 16, 2008)

I use the term ''fasteners'' and ''materials'' on my bills. This covers a broad range of things, most of which I keep in stock in my truck. I buy those items in bulk and charge accordingly to each job.

Don't short yourself on anything, it all adds up.


Thank God, rarely do I have a customer ask me to explain my charges.arty:


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## MikeGC (Dec 6, 2008)

Good advice above and you should follow it however you may not be comfortable yet changing your ways to the recommendations above.

When you get the same objections over and over its time to write a good answer so you can dispense with it and move on to something productive

Tell the customers that ...

"your time is more expensive than paying a few nickels more on occassion for a few items that are all available at the same store.

It is true a homeowner can spend their free time driving to three stores to save a few nickels on 2x4 but you are trying to save them money by being efficient with your time getting all materials at the same store. 

In the end it its a money saver for them to allow a few extras nickels here and there on materials so they can save some $20 bills on your billable time."

You might even consider making this part of your sales presentation to set expectations up front.


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## Bearded Wonder (Jan 21, 2011)

Most of my customers would look at me like had 3 heads if I gave them an invoice broken down to the nails, screws, blades etc. To me that is overhead, and part of the markup. Customers can understand this, if they don't you definitely have the wrong customers. What if you buy a box of screws but only use ten on that job? Are you then haggling over the amount per screw? To me that is a tremendous waste of time and effort on your part. It does come back to how you position yourself in the market, and the customers you attract. It also comes back to how you relate to your customers. Apparently you are not causing customers to have confidence in your abilities and/or trust that you will treat them fairly. Perhaps you are selling a service, but not selling yourself. That's as big a part of it as anything. I work to build a rapport with customers, convince them that I'm on their side to do quality work at a fair price for them. You must cause the customers to place confidence in your ability and integrity. Once that trust is established, with the right customers that is, you should have no nit picky price questions. You give a quote, "I will do a,b and c for x amount", and they will say no problem. They might want to discuss overall price (maybe) but I find usually this is a token effort to knock off a few bucks, and they wind up taking my quote if I stick to it. This is not pie in the sky hypothetical, it is the way most of my customers are and how I do business.


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## Bkessler (Oct 8, 2005)

Fixed price. I'll do project z for $x.


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## thom (Nov 3, 2006)

As has been stated above, price then sell the project. You're selling materials and labor. You're setting yourself up for an argument. The customer second guesses the materials prices, and whether you believe it or not, he's also second guessing the labor. He thinks he shouldn't pay for breaks, shopping time, phone time, talking to him time, etc. You end up doint 1/3 of your work for free. 

Sell the job at a fixed price and end the second guessing. The customer quits looking over your sholder for what you paid and how efficient you worked. In addition, you can charge a price that will pay you for the time you currently put in for free. The customer thinks talking to you is free. It is to him, now, it's expensive to you. Change your business and get paid for your time, unless you think it's worth nothing.


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## woodymayne (Jun 1, 2009)

Thanks to all for your honest replies. 

Mike, no offense taken. I need real constructive criticism, not a pat on the back and pretty pictures. I'm turning 60 this year, a little late to be starting a new career, but nowhere near being able to retire. I don't have the time (or the desire) to reinvent the wheel over and over every time I have a problem.

And Thom, thanks for pointing out all of the time I should be getting paid for, but have not looked at it this way before.

I've been lurking this forum for a while now, and am grateful to you all for sharing so freely your often hard learned knowledge. 

I'm working in a region that has been hit hard by all the layoffs in the auto industry (and associated industries). There are an awful lot of guys doing what I'm doing, which is really driving the prices down. Now I'm sure I'm nowhere as fast as most tradesmen, but my quality is as good as most, better than a lot of the work I've seen. In fact, that holds me up sometimes, being a perfectionist (I know, I have to learn when to say "good enough"). But I've never had a complaint or callback about quality of workmanship. That's part of what I hope separates me from the other hacks. Yes, some of you would call me a hack. But I have 2 mil liability insurance, guarantee my work (and Honor that guarantee), keep proper records and claim all my income, and don't misrepresent myself to the client. I even have a respectable looking work van (not new, but it looks new).

I've learned, mostly from threads on this forum, that I've been undercutting those who have worked hard for their various tickets, and I don't take on that work any more. I have my clients hire their own electricians and plumbers. And I'm working hard at now at giving quotes that don't drag down the rates for those well established in the trade. They've earned those rates, and I respect that. I worked hard in the printing trade to get to a level where the money was good. Now that is gone. Most of the work is being done by immigrants who will work for much less (I don't hate them for this......most of them came from turbulent countries where it's really tough to make a living, and everyone has to feed their families), or the work is printed in third world countries and shipped back here.

To get back on topic, this forum is "contracting 101 for me". I thank you all again. I'll be back with lots more questions and comments (a lot of them will be a little stupid or naive.


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## Supahflid (Mar 22, 2011)

I agree with other posters about giving a lump sum price; your customer should take it or leave it. That means you will really have to do a good estimate that reflects all of the raw cost and includes an appropriate overhead and profit mark-up. My business is knocking on twenty-five years old, and we still consult with our accountant every year about what is an appropriate overhead. Don't be afraid to ask and pay for good advice.

If you must itemize your costs to your clients, perhaps you could include a "sundry job expense" line item or you could even call it "consumables". It seems reasonable to me that someone paying for your services would understand a "nails, dust masks, gloves, screws, etc." type line item. You'll just have to figure out what that number should be.


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## Metro M & L (Jun 3, 2009)

Like some other have said on here add a 'shop fee' that is a percentage of hourly labor billed. Say 7%.


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## 480sparky (Feb 1, 2009)

My hourly rate has 'the little things' built into it. Stuff like wire nuts, staples, screws, nails.....

I'd go bankrupt trying to keep track of little crap like that for billing purposes.


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## tedanderson (May 19, 2010)

woodymayne said:


> A lot of people like the transparency, they think it's an honest way to do business. And I've had a few people remark that because they don't know what I'm spending on materials, I could be screwing them over.


That's when I politely say, "Mr. Customer, do you think that I would screw you over? Have I said or done anything up to this point that makes you question my integrity? I'm sure that you realize that I came over here with my tools and equipment trusting you with the expectation that you would pay me after I've rendered my services. If I had an ulterior motive, I certainly wouldn't invest my time and efforts into this project just so I can swindle you out of a couple of dollars." The way I see it is that if you feel the need to defend your honesty now, you will be arguing with the client in an attempt to prove yourself accurate right up until they sign the check.

The long and short of it is that you are NOT obligated to be transparent with your customer and it does not make you a bad businessman if you aren't. The customer isn't obligated to tell you why he needs the work done or how much money he has in the bank so why should you tell him what you are spending on your business? It's a PRIVATE business doing business with a PRIVATE party. Not a government agency.


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## Supahflid (Mar 22, 2011)

480sparky said:


> My hourly rate has 'the little things' built into it. Stuff like wire nuts, staples, screws, nails.....
> 
> I'd go bankrupt trying to keep track of little crap like that for billing purposes.



C'mon man, you don't track every #10 screw you use? That's just crazy talk!!!!!:whistling


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## carpsteve (Mar 19, 2011)

You are setting yourself up for the "I can buy cheaper" type cutomers. By default you are attracting these clients because they see you not as a contractor but a guy that will work cheap and typically those looking for cheap are cheap. To add to the problem the cheap are typically going to give referrals to more like them. Like Mike said I don't mean to be harsh but your problems may be how you present your business. That said there are many people on this forum willing to help and share. Stick with it if you are happy doing this work and thing will get better over time.


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