# Estimate Gone Wrong



## rselectric1 (Sep 20, 2009)

CarpenterSFO said:


> You would be working for free, or you wouldn't make a profit?


Exactly.

If your quote says it expires in 30 days, then you are off the hook. But if it comes down to just "wages" vs a profit, and it's a good customer, I'd add in the amount that the material went up and offset that against the potential profit. You *did* admit you missed something and at least they didn't sign up within the 30 days so you got lucky there. Just my $000,000,000.02

Keep us posted.


----------



## WBailey1041 (Jan 31, 2014)

Tell them it was cheap cause you had leftover materials from a cancelled job and were willing to let them go cheap cause they were unreturable. You used the materials up since them and they have to pay to play. What's with all the hard liners ?


----------



## tcollins (May 21, 2014)

If your quotes say that they are only good for 30 days then by all means requote the job just explain to them that prices for materials have increased, etc, etc.

If your quote does not say that it is only good for 30 days then you have to weigh the pros and cons:

On one hand, if you requote them with the higher rate there may be a very good possibility that they will go with somebody else and they may look at you as untrustworthy. Therefore you are not making any money from that job and you may have just caused somebody to give you a bad reference.

On the other hand, if you stick with the previous quote and take a hit you are still not making any money on the project but you have just guaranteed yourself a good reference for future business.

So you have to decide which is more important to you and your business for this one project, money or a good reputation.

Tracy


----------



## RMC9 (Feb 24, 2014)

I do not count my wages in the labor cost of the calculation. I am the only person taking a salary so the profit all goes to the company and then my salary is paid bi-weekly, work or no work. This is because the business is multi-faceted with multiple revenue streams. Labor for my help gets estimated on every job, any time I am personally there helping doesn't get factored in. The profit for the company is the bottom line, I don't make it a business practice to only pay my help and cover my expenses. 

I informed of the revised quote today and the higher cost and they asked to quote the materials themselves, which I normally don't let clients do but I did in this instance. My vendor treats me well though so I have little concerns there.


----------



## EthanB (Sep 28, 2011)

If you can fit it into your schedule without having to go into OT, and other OT related expenses, then I'd try to land the job, even if it cuts into your profit a bit. I wouldn't expect to make up the whole 16% but I would probably add half that to the job and maybe pick up a little more if there are substantial additions. I'd be honest that I couldn't do the job at that price any more and that costs had risen since the original estimate. They may take it, they may not but you should always try to do right by a referral.

I don't agree with making up a story about why the prices have gone up. Just say they have, be as honest as you need to be and move on.

I also don't agree with the attitude that you stand by your out-of-date estimate and lose money on principal. You should treat potential customers as you would like to be treated but you don't OWE them anything past what's on the paper. You DO owe your kids a college education, you DO owe your family financial security, you DO owe your employees a stable place of employment. That customer isn't going to be at your bedside when you're 90.


----------



## RMC9 (Feb 24, 2014)

EthanB said:


> If you can fit it into your schedule without having to go into OT, and other OT related expenses, then I'd try to land the job, even if it cuts into your profit a bit. I wouldn't expect to make up the whole 16% but I would probably add half that to the job and maybe pick up a little more if there are substantial additions. I'd be honest that I couldn't do the job at that price any more and that costs had risen since the original estimate. They may take it, they may not but you should always try to do right by a referral.
> 
> I don't agree with making up a story about why the prices have gone up. Just say they have, be as honest as you need to be and move on.
> 
> I also don't agree with the attitude that you stand by your out-of-date estimate and lose money on principal. You should treat potential customers as you would like to be treated but you don't OWE them anything past what's on the paper. You DO owe your kids a college education, you DO owe your family financial security, you DO owe your employees a stable place of employment. That customer isn't going to be at your bedside when you're 90.


:thumbup:


----------



## Seven-Delta-FortyOne (Mar 5, 2011)

RMC9 said:


> they asked to quote the materials themselves, which I normally don't let clients do but I did in this instance.


Ouch. That hurts. Sounds like they don't really trust you. But it might be the price to pay to keep a (potentially) good customer.





RMC9 said:


> any time I am personally there helping doesn't get factored in.


I'm not a business expert, but it sounds like you might be losing money on jobs if you do this. If there was a job where you needed 3 guys, only had 2, and so you wore bags for 3 weeks, well, you just worked for free for 3 weeks. At least I think so. I might be looking at it wrong.







Delta


----------



## WBailey1041 (Jan 31, 2014)

Seven-Delta-FortyOne said:


> Ouch. That hurts. Sounds like they don't really trust you. But it might be the price to pay to keep a (potentially) good customer. I'm not a business expert, but it sounds like you might be losing money on jobs if you do this. If there was a job where you needed 3 guys, only had 2, and so you wore bags for 3 weeks, well, you just worked for free for 3 weeks. At least I think so. I might be looking at it wrong. Delta


I think you missed the part where he gets a check from the company every 2 weeks regardless if he works or not.


----------



## rselectric1 (Sep 20, 2009)

WBailey1041 said:


> I think you missed the part where he gets a check from the company every 2 weeks regardless if he works or not.


I apparently missed it as well, where it it?


----------



## WBailey1041 (Jan 31, 2014)

rselectric1 said:


> I apparently missed it as well, where it it?





RMC9 said:


> I do not count my wages in the labor cost of the calculation. I am the only person taking a salary so the profit all goes to the company and then my salary is paid bi-weekly, work or no work. /QUOTE]


----------



## rselectric1 (Sep 20, 2009)

WBailey1041 said:


> RMC9 said:
> 
> 
> > I do not count my wages in the labor cost of the calculation. I am the only person taking a salary so the profit all goes to the company and then my salary is paid bi-weekly, work or no work. /QUOTE]
> ...


----------



## Calidecks (Nov 19, 2011)

I once measured a job and was suppose to double the sq. footage. I measured have the deck. It was a 10,000 dollar job I accidentally bid for 5000. I was making up the contact when I found the mistake, I called them and told them exactly what happened, I also said I understand if they no longer want me to build their deck. If they do I can offer a substantial discount, but just can't do it for 5g. They emailed me and told me they still want me to do the job. 

My point here is, as embarrassing as it was, honesty prevailed in the end. Of course in my situation all they had to do is measure thier deck to verify my mistake.


----------



## CarpenterSFO (Dec 12, 2012)

EthanB said:


> If you can fit it into your schedule without having to go into OT, and other OT related expenses, then I'd try to land the job, even if it cuts into your profit a bit. I wouldn't expect to make up the whole 16% but I would probably add half that to the job and maybe pick up a little more if there are substantial additions. I'd be honest that I couldn't do the job at that price any more and that costs had risen since the original estimate. They may take it, they may not but you should always try to do right by a referral.
> 
> I don't agree with making up a story about why the prices have gone up. Just say they have, be as honest as you need to be and move on.
> 
> I also don't agree with the attitude that you stand by your out-of-date estimate and lose money on principal. You should treat potential customers as you would like to be treated but you don't OWE them anything past what's on the paper. You DO owe your kids a college education, you DO owe your family financial security, you DO owe your employees a stable place of employment. That customer isn't going to be at your bedside when you're 90.


Well said, Ethan. 

I'd say that RMC9 has no obligation to give the (prospective) customer any sort of break or consideration.

Referrals are gold, they trusted him, middle class, home equity loan, etc., etc., etc., I hear all that, but that's the story with every prospective job, and the time to accept the quote at that price was 3 months ago. If they didn't have the money or the inclination to do it then, that's too bad, but it's not the O.P.'s problem, that's why quotes expire.

The O.P. can make a business decision to try to make it work for the customer (that's a red flag isn't it) but there's no ethical or moral dimension to the question at all. I'd go to them and say, "My costs have gone up, and my prices have gone up. I'll understand if you don't want me to do it any more, but here is my current price."

- Bob

Edit: It's not just what I would do, but what I have done. Most of my proposals now expire in 7 days. If I've spent a month getting the project figured out, and the customer has known my price for weeks, it's time to make a decision. And I have raised the price, sometimes significantly, if the customer has come back after the original proposal expired. A couple of prospects have tried to make a moral issue out of it, but I won't play that game.


----------



## dave_dj1 (Mar 16, 2010)

Well he said they added some stuff, that right there is enough reason to add to the total. I would suggest another meeting, go over the additions and without telling I would look very close at the rest of the job, perhaps some things are or will be easier than you are remembering. Who knows, after a few months we tend to forget things. 
Of course you could always tell them you will have to decline as your schedule is full at this time. Maybe they will wait until fall for you to proceed.
good luck,
dave


----------



## CarpenterSFO (Dec 12, 2012)

It hasn't happened in a good while, but most times that someone came back to me months later and was disappointed that I wouldn't honor an expired proposal and tried to turn it into a tale of trust and greed, it turned out that they didn't like my original number, they shopped my proposal around, found that my number was significantly less than the number from my competitors, and knew that I had made a mistake quoting the job that low.

I respect my customers, and I am honored by the trust they have for me, to allow me to go into their homes and work around their property and family. But they are all very astute, very clever, and very careful about their investments, including their homes. They understand prices and expiration dates, decisions and consequences, and it disrespects them and my relationship with them, to treat them like children.

Edit:
This sort of situation is one reason that small commercial work is more straightforward. Here's the price; it expires on such and such a date; if you come back to me after that it's a new deal. You'd never have this conversation with a restaurant owner or business manager for a medical office.


----------



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

Beerman said:


> This happened to me this week. Did a 1600 square foot basement frame in in February and quoted the trim at the same time. Client called me last week wanting to get the trim rolling and when I requoted it came to over twice the cost I originally quoted. They added in some extras, I did a great job framing and they wanted me to do the trim. I called them up, explained the situation as well as the fact that they added some extras and they understood and want to pay the additional cost. It's ALL in how you deal with the client. Be humble, own up and explain in truth what happened and that you can no longer work for the previous quote for x reasons. If your client can no longer afford you it is their right to not hire you. On the same hand You also can't afford them, thank them for the opportunity get over it and move on. They have family to feed and you do too. Hope it works out for ya


This guys pro.


----------



## RMC9 (Feb 24, 2014)

Going forward with the job with the increased bid and my vendor on materials. After they went out quoted the materials and found my vendor was still the cheapest around (by far) and saw what I would make after materials they understood better. I think the $1000 in hangers, screws and lags about blew their mind. 

Now hopefully the job goes smoothly and we don't have any other hangups.


----------



## Pearce Services (Nov 21, 2005)

You Owe them One....

They said within the 30 days of your proposal they would sign a contract subject to an equity loan. That could be construed as a conditional acceptance.

You know that the process to get financing takes time, you should have told them at that point the likeliness of a price increase due to supplier cost if they could not sign within 30 days.

Good for you to get this handled, now make sure you do something extra nice for them at the end of the process.


----------



## huggytree (Nov 3, 2013)

ethically you should honor your old estimate with material increases......

i would and have in the past

you screwed up....you DO have an out....choosing to use that out or not shows your businesses level of ethics....id just do it and learn not to screw up anymore

i still under bid about 1x a year....im always irritated w/ myself working for a loss or cost ..it happens.....how many times do you OVER estimate jobs? it always comes out even for me at the end.


----------



## huggytree (Nov 3, 2013)

RMC9 said:


> \
> 
> I informed of the revised quote today and the higher cost and they asked to quote the materials themselves, which I normally don't let clients do but I did in this instance. My vendor treats me well though so I have little concerns there.


i would not break down materials separately here...your setting yourself up

every time ive done this the customer just comes back with more arguments

give them as little info as you can....give them the revised quote and let them decide....if they say no then your off the hook


----------

