# Underbid: homeadvisor



## Johnsonbuilds (Feb 24, 2013)

I have used home advisor for 12 years although at times frustrating, its worth it for our company. 
This march i have bid 15 jobs. Most of which the customer has been appauled and shocked at the price. I typically get 1:3 or better of my bids. Last year my feedback was that i was the lowest bidder, at times by 20%. So this year as opposed to my typical 20% to cover overhead and profit, i have been marking up 25%. Now on 10,000 that is a matter of $500 dollars compared to last year. Not thr difference that should be getting me crickets when i submit the quote. Any feedback? Is it this year? 
I have noticed some online estimators that provide price ranges that i couldnt even get materials for their listed total cost. Homewyse for example. I know homeadvisor started publishing average prices as well.


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## BamBamm5144 (Jul 12, 2008)

Are you marking up 25% or actually 33% to get 25%?


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## Defenestrate (Aug 13, 2015)

Johnsonbuilds said:


> I have used home advisor for 12 years although at times frustrating, its worth it for our company.
> This march i have bid 15 jobs. Most of which the customer has been appauled and shocked at the price. I typically get 1:3 or better of my bids. Last year my feedback was that i was the lowest bidder, at times by 20%. So this year as opposed to my typical 20% to cover overhead and profit, i have been marking up 25%. Now on 10,000 that is a matter of $500 dollars compared to last year. Not thr difference that should be getting me crickets when i submit the quote. Any feedback? Is it this year?
> I have noticed some online estimators that provide price ranges that i couldnt even get materials for their listed total cost. Homewyse for example. I know homeadvisor started publishing average prices as well.


Honest question: I'm really not trying to poke at you. What's in your overhead that costs less than 20/25% (however you figure it) that still leaves some actual profit?

The things I'm thinking of -- and this isn't the full list -- that cost a chit-load of overhead... license fees, insurance (liability, vehicle, tools), workmans comp (if you carry it), vehicle (depreciation, gas, maintenance), office expenses, tools (new and maintenance), bookkeeping, tax prep... 

Or are you running a very lean operation, which actually leaves you decent profit?


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## Johnsonbuilds (Feb 24, 2013)

It costs me roughly 200 a day to be in business. Work comp is part of labor which i mark up 20%. So yeah my net profit is actually less than 20%. And no im not getting work and im not making money this is after 14 years of business bidding the same using the same software as i always have and 12 years have been great for growth and profit. We moved from LA to Chicago three years ago. The first yesr we moved i did pretty well. Last two years have been very tough.


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

Sounds like the problem isnt the bid, its the marketing. Try a different lead source.


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## Johnsonbuilds (Feb 24, 2013)

Metro M & L said:


> Sounds like the problem isnt the bid, its the marketing. Try a different lead source.




Do you have a recommendation


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## SectorSecurity (Nov 26, 2013)

Ask yourself why people go to HA? Its because they are looking for cheap or they are window shopping for stuff they know they can't afford.

Now that's not the case with all customers on HA, but I imagine most are more worried about price then they are quality of work.


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## abmremodel (Oct 12, 2012)

Johnsonbuilds said:


> It costs me roughly 200 a day to be in business. Work comp is part of labor which i mark up 20%. So yeah my net profit is actually less than 20%. And no im not getting work and im not making money this is after 14 years of business bidding the same using the same software as i always have and 12 years have been great for growth and profit. We moved from LA to Chicago three years ago. The first yesr we moved i did pretty well. Last two years have been very tough.


Can't say that Chicago market has been good to me.  especially with H.A:no::no::no:


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## Johnsonbuilds (Feb 24, 2013)

Do you speak english


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## abmremodel (Oct 12, 2012)

No megusta English  genius 


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## trussme (Jan 18, 2013)

Move. The whole business climate is in the dumper where your at.


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## abmremodel (Oct 12, 2012)

trussme said:


> Move. The whole business climate is in the dumper where your at.




So true!


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## cwatbay (Mar 16, 2010)

I started off in an area ( a whole county) where I lived. The business climate was sketchy, people did not want to spend decent money for projects, a lot of hacks and handymen. 

So, after 4 years of starving and working other jobs to make things even, I marketed myself in a different area that was an hour away. Well, that worked. I started making some money and moved to that area. 

If it isn't working where you are, and, it doesn't appear to get better, then move to where it is better ( or at least move your business ). A lot of tradesmen that work full time around here have to travel one to two hours to get to where the work is.


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## Johnsonbuilds (Feb 24, 2013)

cwatbay said:


> I started off in an area ( a whole county) where I lived. The business climate was sketchy, people did not want to spend decent money for projects, a lot of hacks and handymen.
> 
> 
> 
> ...




Well when i was in LA it took a while to figure out where to market, and it wasnt necessarily where you saw the big houses and ocean views all the time. 
Im sure I am going to have to travel more and that is good advice thank you. 
I also think i am getting a quality issue with regards to my calls.
Its hard to get the customer we need to stay in business. 
In la i had a handfull of them developed over many years of establishing a reputation


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## Johnsonbuilds (Feb 24, 2013)

Well ive stuck to my guns on pricing and have gotten two of the five jobs i wanted so far so im pretty happy i didnt fill my schedule with losers


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## ShepherdEHC (Apr 10, 2016)

Chicago from LA is a big shift in peoples income. And i think i read about alot of hacks and handy men. these guys are under bidding and cutting you. Best thing i would say is focus on a county and continue your bidding. Do alot of local marketing from county to county but the key here is ONE AT A TIME !!!. I tested this method out last year and it actually works.

You will need to know the average income of your customers ( atleast to me i think its important ) if your average income is low then the chances of making money are slim, unless you try the financing route. I've heard this can change your whole company into something more profitable than you've ever expected.


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## Johnsonbuilds (Feb 24, 2013)

ShepherdEHC said:


> Chicago from LA is a big shift in peoples income. And i think i read about alot of hacks and handy men. these guys are under bidding and cutting you. Best thing i would say is focus on a county and continue your bidding. Do alot of local marketing from county to county but the key here is ONE AT A TIME !!!. I tested this method out last year and it actually works.
> 
> You will need to know the average income of your customers ( atleast to me i think its important ) if your average income is low then the chances of making money are slim, unless you try the financing route. I've heard this can change your whole company into something more profitable than you've ever expected.



Excellent advice thank you sir! 
I noticed in California you had to be licensed to get good work. Tire kickers hired unlicensed and got screwed all the time. Downside was losing a job to an unlicensed guy upside was they dont get the good larger jobs.
Chicago, any ******* can call himself a contractor, so tons of people get ****ed. Which had made selling ourselves as great honest contracting easy, problem is any ******* can bid against you


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## jbaugh (May 23, 2016)

I would try a different lead source. I work with a guy that is into marketing online. He's awesome managing adwords and social media and working to get a lead website ranked in google organically and on google maps. I've been working for him for 3 weeks and he's gotten me about 25 leads with 16 of them signing a contract. I'm really concerned that I won't have the capacity to handle all of the extra work that I've been getting, but this is what I've dreamed about.


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## TNTRenovate (Aug 19, 2010)

I live in the Chicagoland area, Naperville. Business is a boomin'.

I am booked till September and looking further out. I am charging more than I ever have. My mark up is around 40%.

Best lesson is to market to the clients you want, which are the ones that will pay you what you want to make. I started charging based on that thinking and have never looked back. People who have money know other people who have money and live in neighborhoods with people who have money.

What you have learned is that you are pricing yourself out of people who won't or can't pay you what you want. Now take those prices else where. Get a good website, 5 star Yelp reviews and start using your business cards.


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## GO Remodeling (Apr 5, 2005)

People who have money know other people who have money and live in neighborhoods with people who have money.
.[/QUOTE]

My "birds of a feather" theory. My other theory is that there is one person in a group that is an outlier. That person is known to be the one that won't let you make any money on their job.


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## heavy_d (Dec 4, 2012)

And once in a while you will find a golden nugget client who will refer you continuously and make you lots of money!


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## real clean now (Jun 25, 2016)

I found a bunch of my trash customers all had things in common and all my good customers had things in common. it wasn't typical things like ones a lawyer and ones a grocery bagger. It was more things like this one pays with AMEX And this one wants bill pay or this one has a green egg and this one buys BBQ. One only bought $12 6 packs of beer vs one only drank natty Ice. Once you find a couple of the things that the majority of your good customers have try marketing in areas where they sell those items. Your services will be associated with those types of choices that that type of consumer is buying.


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