# How can you compete?



## Tom M (Jan 3, 2007)

The computer with all this information sharing, the do-it yourself boom. Come on its getting more expensive to build anything. Even small jobs that take a day or two to complete cost over a grand plus material.
What happened? 
When I opened the local paper I see:
Cape cod roofs replacement/tear off 12sq/ 2400.00 complete. 
$7500.00 for a full bathroom gut and change out new fixtures,tile the works. $3995.00 Up to 20 combined square of siding replacment
Buy 12 windows get 1 free.
I say dam I used to roof for that much 13 years ago, I dont think I could ever side for that cost or afford to give away windows. I have been bidding on a few baths and each cost roughly 5 K just for plumbing and fixtures.
What next?


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## Celtic (May 23, 2007)

What are the ads NOT telling you?

Take the 12 sq. roof for $2400 for example (BTW, is that Carlson Brothers ad?)....does it include a dumpster, permits for both the job and the dumpster?

What about sheathing replacement?


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## A W Smith (Oct 14, 2007)

*First impressions are lasting.*

Tom now you have to be a salesman. You have to sell yourself. You have to be outgoing and receptive to the clients needs. But be careful, Don't be boastful or come across as a know it all. You may be perceived as a Bs artist. If a client starts to tell you about what a butcher some other contractors are try and change the subject. Explain to them that you do not make a habit of criticizing others work that you let your own work stand by itself. explain to your prospect clearly the features and details of what you are selling. Go the extra mile and explain to the prospect how you would go about avoiding pitfalls by explaining some of the details you would perform. many guys you are competing with will just drive up make a list, hardly interact with the client and just drop an estimate in the mail. Thank the prospect for considering you. Be a good listener. If you know someone in their neighborhood ask them if they know them. be friendly. be interested in them, If they are friendly and offer you a cup of coffee or soft drink thank them and mention to them that they are considerate and you would love to have a client like them. If they offer alcohol decline, This may make an impression on them as it could be a test to see if your a drinker. Try to make the prospect comfortable. Do not talk over their heads by being overly complex. If they have questions you cannot answer tell them that you will research for them and get immediately back to them.


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## wizendwizard (Nov 11, 2007)

It really comes down to 1 thing. You are not competeing against those ad's in the paper or on the net. You have to show the customer everything they get up front and honest. Don't hide behind a price that is misleading. These ad's are just that. The customer is going to have those salesmen come out and then they get the full story: Oh its extra for the container, Extra for permits, Extra for a different material, Extra for so much more sq ft. 

You mentioned a full bathroom gut and remodel with new fixtures and tile and the works. Do you think that $7500 is going to be cheapest possible fixtures and tile, midrange? Highend? These places that offer the discount is a tool for dishonesty. 

Look at lowes and the $199 whole house carpet install. Read the fine print.
Offer only good on "special order" carpet. What is Lowes' markup on that material and we all know they use the cheapest labor. Who is making money. Lowes only. Customer actually pays higher price for the carpet, but lowes was able to get their foot in the door by saying, "whole house carpet for $199"

Don't let it get ya down just sell yourself and keep plugging away. True customers that care about their homes know a real contractor when he makes his sales pitch.

Best of luck and don't give in to the b/s!


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## Tom M (Jan 3, 2007)

Celtic said:


> What are the ads NOT telling you?
> 
> (BTW, is that Carlson Brothers ad?)..


Could be :whistling You must know the area. You must also know this ad has not changed in years.

The sickening thing to me is the tremdous amount of riff-riff associated with the trades I came up doing. Roofing, siding, windows, bla, bla, bla. I always knew I didnt want to deal with this. It was go big or use them as stepping stone to larger projects. I figuire I would continue to provide these services as I evolved into "construction" as opposed to cut-throat home improvements. I dont know all the trades as well as I would like. There is much to know and I am still learning as much as possible. Especially bidding things in which I have no lengthy track record. Along the way I need to still compete and feel like I cant. Its a lost feeling sometimes.


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## Tom M (Jan 3, 2007)

I recently decided to advertise to only my data base with brochures. As I was going through that list I realized I have done so much repeat business with my customers the list is not that long. Regardless I sent out over 100 brochures and got not one call. All my customers love me and my work. I feel either I have gotten to expensive or there is little left to do for these people. Selling myself or the work has never been an issue till this past year. There are so many houses being knocked down and McMansions being built that it just seems people have little intrest investing too much into a small foot print.


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## MIbeachbuilder (Feb 6, 2008)

Living in SW MI I listen to Chicago talk radio all the time and I hear advertising about a company that does a complete kitchen remodel for 10k including "cherry cabinets and granite countertops". I have wondered myself how that works because a homeowner can easily spend 10k just for cabinets not including anything else.

If there were ads like that running in my area for a complete roof install for that cheap i would call them to get an estimate and see what the hidden things were....there is almost always a catch...


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## Celtic (May 23, 2007)

MIbeachbuilder said:


> Living in SW MI I listen to Chicago talk radio all the time and I hear advertising about a company ....



Service Magic seems to the flavor of the month on the radio here.

Service Magic also seems to be a popular flavor on this forum....:whistling


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## MIbeachbuilder (Feb 6, 2008)

tom m said:


> There are so many houses being knocked down and McMansions being built that it just seems people have little intrest investing too much into a small foot print.


Less is more i say!


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## Tom M (Jan 3, 2007)

There is surely a catch to some degree but its the volume generated for these sales is what enables these people. I dont pay that much cheaper for materials than a homeowner going to home depot. The pitch for these peoples is the ability to churn out a repetitive service volumn based on discounted supply cost.


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## Celtic (May 23, 2007)

tom m said:


> There are so many houses being knocked down and McMansions being built that it just seems people have little intrest investing too much into a small foot print.


Not me!
Favorite colors?

Cinder/Cement block?

BUT....once I am done with this shack, it gets sold and we see if I get the McMansion ~ that my ONLY plan on work revolves around painting, crown mold, upgrading the lighting (int/ext ~ landscape). These tasks will probably be done quite poorly by yours truly.


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## MIbeachbuilder (Feb 6, 2008)

Celtic...service magic the website for referring contractors?


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## ChrWright (Jul 17, 2007)

All excellent advice. 

There is no such thing as something for nothing.

There is no such thing as something for nothing.

There is no such thing as something for nothing.

You've heard the story of the competing barbers haven't you? Competing across the street from each other--with dueling cost reductions in an effort to steal business from the other.

Finally, when one puts up a sign cutting his prices to $2 per haircut--The other wisely changes his to read "We fix $2 haircuts".

The first mistake is thinking you're competing against those ads in the first place. The second is not recognizing the value of what you give to your clients. Professional work has to be done at a professional rate. If it's cheaper, there's a reason--and that reason usually means taking a big risk if you're the consumer.


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## Celtic (May 23, 2007)

MIbeachbuilder said:


> Celtic...service magic the website for referring contractors?


That'd be the one


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## MIbeachbuilder (Feb 6, 2008)

Celtic said:


> BUT....once I am done with this shack, it gets sold and we see if I get the McMansion ~


If your going to sell it, think about keeping it neutral. Linen, beige and grays appeal to more buyers. do you have a photo of your house? what kind of siding is on it now?


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## Celtic (May 23, 2007)

ChrWright said:


> You've heard the story of the competing barbers haven't you? Competing across the street from each other--with dueling cost reductions in an effort to steal business from the other.
> 
> Finally, when one puts up a sign cutting his prices to $2 per haircut--The other wisely changes his to read "We fix $2 haircuts".


As long as we are talking hairdo's...

The town has 2 barbers.
Both barbers charge about the same.
One barber has messy hair, the other has perfect hair.
Which barber do you chose (messy or neat) and WHY?


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## MIbeachbuilder (Feb 6, 2008)

do you get a lot of referrals from them? i have talked to them a couple of times but im not sure....


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## Celtic (May 23, 2007)

MIbeachbuilder said:


> do you have a photo of your house? what kind of siding is on it now?



...it's too embarrassing to show :laughing:

Seriously...it's a hovel.


But that's another thread ~ let's let Tom have his 15 minutes :thumbsup:


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## Celtic (May 23, 2007)

MIbeachbuilder said:


> do you get a lot of referrals from them? i have talked to them a couple of times but im not sure....



Do a search for "Service Magic" on this forum BEFORE you decide anything.


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## ChrWright (Jul 17, 2007)

The messy one, of course... 

With only two barbers in town, the messy one obviously cut the other's hair-and vice versa. :jester:


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## Tom M (Jan 3, 2007)

Celtic said:


> As long as we are talking hairdo's...
> 
> One barber has messy hair, the other has perfect hair.
> Which barber do you chose (messy or neat) and WHY?


I would have to say neat one. He may be a sweetheart but you'll look your best. The messy one might be a stoner.

Just got a call from a customer asking me for some work we talked about months ago. Of course she asks me how busy I am, she then goes on to mention how a close contractor friend of her is dead as far as work goes. "He's a quality contractor but she thinks he charging himself out of work."
This is what I'm talking about. She also said she loved my brochure and it reminded her to call me, so I now I can say I got one lead from it.


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## A W Smith (Oct 14, 2007)

tom m said:


> I would have to say neat one. He may be a sweetheart but you'll look your best. The messy one might be a stoner.
> 
> Just got a call from a customer asking me for some work we talked about months ago. Of course she asks me how busy I am, she then goes on to mention how a close contractor friend of her is dead as far as work goes. "*He's a quality contractor but she thinks he charging himself out of work*."
> This is what I'm talking about. She also said she loved my brochure and it reminded her to call me, so I now I can say I got one lead from it.


Now read my post above and SELL THE JOB not by price but by salesmanship. You might also explain to her that 90 percent of home improvement contractors fail within five years because they try to compete by price alone. And that you intend to service repeat customers for the rest of your life.


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## wizendwizard (Nov 11, 2007)

Celtic said:


> As long as we are talking hairdo's...
> 
> The town has 2 barbers.
> Both barbers charge about the same.
> ...


Either one!
We all know the barber with the neat hair gets HIS BOYFRIEND to cut his hair.


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## Celtic (May 23, 2007)

Smith...I just found out where South River is.


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## A W Smith (Oct 14, 2007)

Celtic said:


> Smith...I just found out where South River is.


 
No thats Sayreville, I knew the instant I saw Jernee Mill Road on tha map you had there.


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## Tom M (Jan 3, 2007)

A W Smith said:


> Now read my post above and SELL THE JOB not by price but by salesmanship. You might also explain to her that 90 percent of home improvement contractors fail within five years because they try to compete by price alone. And that you intend to service repeat customers for the rest of your life.


She might care she might not, she might only care about the cost. I sell her cause I compliment what shes trying to do and not push her. I talk with her and at her. SALES, she feels comfortable I am on the same page and that allows people spend easier.


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## Celtic (May 23, 2007)

A W Smith said:


> No thats Sayreville, I knew the instant I saw Jernee Mill Road on tha map you had there.



I thought you were way down by Cape may or something :jester:


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## Tom M (Jan 3, 2007)

Im just ranting today. Thanks for listening.


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## A W Smith (Oct 14, 2007)

Celtic said:


> I thought you were way down by Cape may or something :jester:


no Im right across the river from Sayreville. I tell people if you were to strangle NJ by the neck I am right where your thumb would be.


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## Celtic (May 23, 2007)

Lmao


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## kevjob (Aug 14, 2006)

A W Smith said:


> no Im right across the river from Sayreville. I tell people if you were to strangle NJ by the neck I am right where your thumb would be.


right or left thumb? :laughing:


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## BattleRidge (Feb 9, 2008)

2400 for 12 squares? 40 a square for Malarkeys, then 20 a square for everything else.5 for dump fees, that leaves 135 dollars a square. 2 guys should be able to do this in a day. Thats 1620 dollars of gross labor profit. 40 bucks an hour each total cost. so like 20 an hour to your employees. Thats 640 but we will round up to 800 to cover other expenses. That means you make around 800 bucks in a day for talking on the phone. Or if you actually do your work more like a grand. Thats not too bad.


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## Double-A (Jul 3, 2006)

Celtic said:


> ...it's too embarrassing to show :laughing:
> 
> Seriously...it's a hovel.
> 
> ...


Its covered in pie tins, no doubt.:jester:


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## Royal-T (Feb 6, 2008)

*Sometimes less is more!*

I just took a contract for siding at half what I would normally charge . The only reason I took it is because this guy can give me 3-4 houses a month at 30 square on average. If you guys remember I posted a thread asking if I was on crack with my bids and just about everyone said I was comparable to their rate.:thumbup: Sometimes you have to underbid to keep busy and even though I am not happy about cutting my own throat to get work, if I am not working and sitting at home I'm making no money at all. It sucks but you can only sit at home for so long! Sorry guys but thats the cruel reality and when the market for home improvement picks up again I can tell this guy to kiss my . This little smilie best describes how I feel about it  :furious: !


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## Tom M (Jan 3, 2007)

BattleRidge said:


> 2400 for 12 squares? 40 a square for Malarkeys, then 20 a square for everything else.5 for dump fees,


Wow its more like 12sq at $50-55/sq $600. add iceshield/ paper, nails, pipe collars $200. add 7% tax now your at about $900 bucks for material and about $400 for dumpster so now your at $1300-1400 job cost. Your paying 3 people out of that. These roofs are 10-12 pitch so say with some hairy landscape set-up and a late start you dont finish 1 day. God forbid there is wood damage, you cant charge enough to make up a crew rate for the entire day. Better off staying home. $5 dump fees damn.


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## SelfContract (Dec 6, 2007)

Let's all cut our throats TOGETHER!! :thumbsup::thumbup:.. and die TOGETHER...


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## OneCall (Feb 4, 2008)

I have always been successful selling ME, and the company. We are in a position now where people either pay through the nose or they have to wait with everyone else. Granted we are in Austin Texas and seems to be a lot of work. I have done ZERO advertising.


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## dayspring (Mar 4, 2006)

A W Smith said:


> Tom now you have to be a salesman. You have to sell yourself. You have to be outgoing and receptive to the clients needs. But be careful, Don't be boastful or come across as a know it all. You may be perceived as a Bs artist. If a client starts to tell you about what a butcher some other contractors are try and change the subject. Explain to them that you do not make a habit of criticizing others work that you let your own work stand by itself. explain to your prospect clearly the features and details of what you are selling. Go the extra mile and explain to the prospect how you would go about avoiding pitfalls by explaining some of the details you would perform. many guys you are competing with will just drive up make a list, hardly interact with the client and just drop an estimate in the mail. Thank the prospect for considering you. Be a good listener. If you know someone in their neighborhood ask them if they know them. be friendly. be interested in them, If they are friendly and offer you a cup of coffee or soft drink thank them and mention to them that they are considerate and you would love to have a client like them. If they offer alcohol decline, This may make an impression on them as it could be a test to see if your a drinker. Try to make the prospect comfortable. Do not talk over their heads by being overly complex. If they have questions you cannot answer tell them that you will research for them and get immediately back to them.


 

AW, Extremely good advice, For All Of Us! While many of us know these things, it;s good to be reminded.


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## BattleRidge (Feb 9, 2008)

tom m said:


> Wow its more like 12sq at $50-55/sq $600. add iceshield/ paper, nails, pipe collars $200. add 7% tax now your at about $900 bucks for material and about $400 for dumpster so now your at $1300-1400 job cost. Your paying 3 people out of that. These roofs are 10-12 pitch so say with some hairy landscape set-up and a late start you dont finish 1 day. God forbid there is wood damage, you cant charge enough to make up a crew rate for the entire day. Better off staying home. $5 dump fees damn.


five bucks a square for dump. I live in Montana and own a dump trailer, so I don'[t use a dumpster. I can do 12 squares easy in a load and thats about 50 buck to dump, depending on the shingle but I was relating to the single story rancher someone else referred to. I have a receipt right in front of me for 43.85 per square of Malarkeys. Glacier guard may be a little more then I said but pretty close. Whats the tax? And I wasn't assuming the worst so I didn't add in that its on the side of a mountain with gnarly landscaping or something. I was just saying in general. I usually have 2 guys on a job unless its over 30 sq.

I also have a clause in my contract that If I have to do repairs other then the general labor I will charge 40 and hour per person extra. I don't fix crazy **** for free. So it may be a little cheap. But thats about what I would bid. I do LOTS of trailers at 2700,00 for 14 squares and come out of it with good money. But I do the work myself and I put 2 rooves in the trailer. I don['t want to argue, I was just saying that I can do it for that and be fine;


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## O.C.Inc. (Jan 21, 2008)

Quality
Price
Speed

Tell the HO they can have any two. 
Pat


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## DavidC (Feb 16, 2008)

ChrWright said:


> The first mistake is thinking you're competing against those ads in the first place. The second is not recognizing the value of what you give to your clients. Professional work has to be done at a professional rate. If it's cheaper, there's a reason--and that reason usually means taking a big risk if you're the consumer.


Exactly. 

In reality you're not competing with those ads because they are promising to deliver something else. Or they are getting some poor sucker under contract so they can start with the change orders and extras.

I wouldn't worry about them. Worry about the people that you can sit in front of. Let your references, photos and character speak for you. 

Good Luck
Dave


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