# The customer wants a breakdown



## bwalley

rbsremodeling said:


> I made light of your post Winchester. But that might actually be a good tactic to use when some one asks for a break down. I could get a lot of mileage out of that scenario.:thumbsup:
> 
> You got me scratching my 48 hour beard on that idea. hmmmmm:shifty:


A client called me because she backed into her garage with her van and was turning in a claim to her homeowners insurance, I gave her a bid that was pretty reasonable and it was lump sum, the insurance company wouldn't accept it, they needed line items.

So I talked to a friend of mine who is an adjustor for USAA, and asked her how to write it up because it was a small job and the lineal foot prices didn't work out, she said on samll jobs they will apply minimum charges and told me what they would pay.

So I rewrote the bid and the adjuster asked why the job tripled in price, I told him because since it was a small job and there were different crafts involved, I used the insurance industry standard minimums and the bid is what it is, he didn't like it but they paid the claim.

I was probably too low to begin with, so in this case it was a good idea to do line item bidding.

Morale of the story is, if you nickel and dime the insurance company you can be very profitable, but I hate having to play their games so I rarely deal with insurance work.


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## RidgeWalker

Mike Finley said:


> Huge misconception that not giving a break down means the only alternative is you will convey non-trustworthiness and no confidence and suspicion.
> 
> That logic could be applied to anything.
> 
> Customer - I want to drive your truck everyday that you are here working, you won't need it so I want to drive it around.
> 
> Contractor - Well sure, of course. (I dont' want to make it seem like I don't trust him, he might lose his confidence in me and I might not get this job)
> 
> Customer - I also want a copy of your income taxes from last year.
> 
> Contractor - of course.


Please explain what else not providing a client a breakdown who askes for one produces in the relationship? I'd like to know your perspective about it.


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## JTMcC

RidgeWalker said:


> Something else has struck me about providing a breakdown if a client request's one. Transparency. In todays world when a single blog or forum post can bring huge company to their knees prospects are realizing that they want companies who are transparent, or in other words don't feel they have to hide information from their clinets. The second a prospect askes for a client breakdown you know if you refuse you just created a certian level of suspicion and distrust. They are asking themselves, what's he got to hide.
> 
> Many of us interpurate their motive as negative, and that they'll use the information against us or another peer. That's a risk of course, but if you are the only 1 out of 3 or 4 contractors they spoke with that gave them a breakdown how does that make you appear to them?
> 
> Transparent, trustworthy, and confident.
> 
> Wouldn't those be attributes we'd want to instil in our propsects who are trying to make an informed decision about hiring a contractor?
> 
> There's something else many of us need to take heed to. Every singe thing you post on forums is forever recorded on the internet and how we respond here can be seen by any one with just a few keystrokes and a mouse click. Many of us have linked to our web sites and our profiles actually give our locations. I personally think back at how I responded on post's and regret that it is forever recorded.
> 
> Yes this is probably better of as another thread but some of the responses here concern me in that we don't fully realize the implications and ramifications our postings can have on our industry as a whole and on our business individually.
> 
> I responded to a reply on this thread with with a "most excellent" remark. I retract that because I realize it could make outsiders precieve me in a manner which isn't consistant with how I conduct business.
> 
> So,
> If the client askes for a breakdown choose yourself what you want to do, I know what I'd do. Transparancy!
> 
> PS: At the time I posted this the forum had 35 unrigistered viewers, who do you think they are?


 

It has absolutely nothing to do with "hiding" anything from my customer. 

We are selling, as much as anything, the knowledge (gained over years of paying dilligent attention) of how to do our work in the most efficient manner, the ability to repair work done by others, and the ability to do difficult work for a prime contractor without harming (and hopefully even helping) his beloved schedule.
I don't know what line of the "break down" we would put those charges on:huh:

JTMcC.


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## RidgeWalker

JTMcC said:


> It has absolutely nothing to do with "hiding" anything from my customer.
> 
> We are selling, as much as anything, the knowledge (gained over years of paying dilligent attention) of how to do our work in the most efficient manner, the ability to repair work done by others, and the ability to do difficult work for a prime contractor without harming (and hopefully even helping) his beloved schedule.
> I don't know what line of the "break down" we would put those charges on:huh:
> 
> JTMcC.


 
I know we are not "hiding" anything it can just apear that way from the clients perspective.


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## Mike Finley

RidgeWalker said:


> Please explain what else not providing a client a breakdown who askes for one produces in the relationship? I'd like to know your perspective about it.


All I'm saying is you're kind of acting like if a customer voices the words - do you give a line item break down or can I get a line item break down... and you don't say YES SIR! the only outcome is distrust and all the other words you used that I'm too tired to go back and look up.

I can walk up to somebody and slap him hard across the back of the head... does that mean I'm in for a beating no matter what? Or do the words that come out of my mouth directly after have any effect?

Two instances - the next words out of my mouth could be : take that mouther F'er piece of sh*t...

... or the next words out of my mouth could be - there was a black widow on your neck, see it right there on the floor now, I killed it.

Just because a customer asks for a break down doesn't mean I can't influence the outcome by my response.

I could say YES SIR!
I could say F no *******
I could say "Huh, you're the first customers who has ever asked me that, now what exactly do you want?... Uh huh... hmmm, now why exactly would you want that? Oh, I see, well you know what, actually if that's the only reason then you probably don't need one because we do this, this and this... Oh, you don't need one now? Okay, now lets talk about your down payment..." 

I've been in sales a long time and did them for a long time and the one thing I learned is never give up anything without first making sure you need to. Lesson #2 is always follow a customers question with a question.

Millions of cumulative dollars have been lost over salespeople thinking they know why a customer is asking a question. Millions of cumulative dollars have been gained by sales people who realize they don't know why the customer is asking for what they are until they ask them why?


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## DavidC

Can anyone explain to me why only contractors have to provide a breakdown of costs to the consumer? What is so different about our industry?

Hardly a day goes by that we don't purchase goods or services. Where are the breakdowns for all of this?

Most of the time the question is asked only because the prospect does not know what else to ask. It is normally a veiled request for what am I getting for my money?. The answer is a wonderful project built by us to these outstanding specifications in a timely manner. And we even clean up after ourselves. 

Our proposals outline what we will do, the materials specified, the standard of workmanship we will follow, allowances for certain HO chosen materials and a list of owner responsibilities. Our contract covers the payment schedule and time frame for the work. That is primarily the info most clients are really seeking, if only they knew how to ask.

Educate them on what we will do for them, not what the contracts does for us.

Good Luck
Dave


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## bwalley

DavidC said:


> Can anyone explain to me why only contractors have to provide a breakdown of costs to the consumer? What is so different about our industry?
> 
> Hardly a day goes by that we don't purchase goods or services. Where are the breakdowns for all of this?
> 
> Most of the time the question is asked only because the prospect does not know what else to ask. It is normally a veiled request for what am I getting for my money?. The answer is a wonderful project built by us to these outstanding specifications in a timely manner. And we even clean up after ourselves.
> 
> Our proposals outline what we will do, the materials specified, the standard of workmanship we will follow, allowances for certain HO chosen materials and a list of owner responsibilities. Our contract covers the payment schedule and time frame for the work. That is primarily the info most clients are really seeking, if only they knew how to ask.
> 
> Educate them on what we will do for them, not what the contracts does for us.
> 
> Good Luck
> Dave


I think people get the idea that a contractor owes them a breakdown because they have possibly seen insurance estimates, or because they want to make sure the 2x4 that they can buy for $2.54 at HD isn't being sold to them for $3.00.

They are also confused thinking hiring a contractor is like buying a sweater at Burdines or at Macy's, it is the same sweater but the one at Burdines my be cheaper.

Where hiring a Contractor to do a job is not the same, it is a relationship that is being entered into to get a job completed, the more elaborate or expensive the job is, the longer the relationship will be, that is why if I have an issue during the bidding stage of a job and realize the client is going to be overly difficult or a PITA, I won't take their job.


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## RidgeWalker

Mike Finley said:


> All I'm saying is you're kind of acting like if a customer voices the words - do you give a line item break down or can I get a line item break down... and you don't say YES SIR! the only outcome is distrust and all the other words you used that I'm too tired to go back and look up.
> 
> I can walk up to somebody and slap him hard across the back of the head... does that mean I'm in for a beating no matter what? Or do the words that come out of my mouth directly after have any effect?
> 
> Two instances - the next words out of my mouth could be : take that mouther F'er piece of sh*t...
> 
> ... or the next words out of my mouth could be - there was a black widow on your neck, see it right there on the floor now, I killed it.
> 
> Just because a customer asks for a break down doesn't mean I can't influence the outcome by my response.
> 
> I could say YES SIR!
> I could say F no *******
> I could say "Huh, you're the first customers who has ever asked me that, now what exactly do you want?... Uh huh... hmmm, now why exactly would you want that? Oh, I see, well you know what, actually if that's the only reason then you probably don't need one because we do this, this and this... Oh, you don't need one now? Okay, now lets talk about your down payment..."
> 
> I've been in sales a long time and did them for a long time and the one thing I learned is never give up anything without first making sure you need to. Lesson #2 is always follow a customers question with a question.
> 
> Millions of cumulative dollars have been lost over salespeople thinking they know why a customer is asking a question. Millions of cumulative dollars have been gained by sales people who realize they don't know why the customer is asking for what they are until they ask them why?


I guess we have differant views Mike and that's ok. Everything I do is based many years of experiance as a salesman. Things I say and the way I respond to clients questions or requests work for me, they might not work for others. My responces here are based on my experiance of home owners, and with this topic it's usually not a good idea to refuse to give a client a "breakdown".

I guess we should also be defining the word breakdown as well, it seems that to some here it means we must expose our profit margins by showing material cost, labor, and profit. While others feel its a line item list of the scope of work, and others it could mean a line item breakdown of the charges that are being added to derive at the final cost.

Like I said earlier in the thread, my experiance's have shown me that most home oweners are asking for a breakdown to know exactly what scope of work I'm purposing to do and what materials I'm using to complete the job.

I've also experianced the home owner who brings up the, I can get another contractor to do it at a lower cost then you objection. My experiance has shown me that I didn't close the sale properly in the first place because of that the client felt the need to shop around while waiting for thier insurance paperwork to come in. Then sometimes those very clients ask the next question, what's your breakdown.


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## TBFGhost

bwalley said:


> Morale of the story is, if you nickel and dime the insurance company you can be very profitable, but I hate having to play their games so I rarely deal with insurance work.


:thumbsup::thumbsup::thumbsup:

I used to be a head tech at a body shop. We did ALOT of insurance work as you could imagine. We hardly kept any extra supplies in house. Things that I would need, such as nuts, bolts, clips, rivits, etc etc. When I first started there, I hated that b/c I never had what I needed....I came from another body shop which had huge inhouse bins of extra hardware.

Then I figured out the gig....we had a computer installed back near my bay, and on each computer there were parts disgrams. As I tore a car down I would stop and count the amount of clips I broke, or the extra nuts and bolts I needed. I would located them on the computer and write down the part numbers. I would tack that onto the estimate. Most of the time adding an extra 1 or 2 of the items to be safe. When I was done with the tear down, I spent 5 min to 2 hours depending on how well the job was written or how much extra damage I found, with the office people. 

This was two fold. The car got everything OEM right down to nuts and bolts and we got to charge the insurance company for EVERYTHING we used, which is fair if you ask me. We became VERY profitable...our shop, out of the other 5 that where owned by the same company soon rose to the top. I might have still been working there to this day had it not been for the owners starting to do illegal things with the money....now only one shop remains open, the brothers don't talk, one took the other to court and one got arrested. 

You want to talk about nickel and dime. Oddy enough, that has carried over with me to contracting...sometimes people see the material list and . But everything is there that should be and it is accurate, and I can justify it.

The bodyshop gave me a small heads up when coming into contracting. About charging for everything, I saw and knew the mark-up on material which ranged from 25-45%. I also saw that we marked up labor 100%. I would go around, ask the guys how long it would take to do something, we all got very good at estimating our parts. I was teardown, then it went to frame work, then body work, then prep, paint, back to me to get put back together, then to detail. I would get time estimates from every "dept." and double that time. I first thought I would ripping people off and didn't agree, but then I started to learn how companies worked and made money. Having an up front seat, and being one of the people who edited the work orders/estimates to ensure job profit taught me alot.

At one time we had a great crew working there, I just learned the door shut last week. We made some really bad wrecks come as near perfect as you can ask. We took pride in our work, did it right, but the customers paid for it. The ones who wanted hack jobs cheap we sent away.... It was VERY hard to tell we had ever been there...


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## Mike Finley

No disrespect, but I haven't a clue what the hell you're trying to say:



RidgeWalker said:


> I guess we have differant views Mike and that's ok. Everything I do is based many years of experiance as a salesman. Things I say and the way I respond to clients questions or requests work for me, they might not work for others. My responces here are based on my experiance of home owners, and with this topic it's usually not a good idea to refuse to give a client a "breakdown".


How can you say they work for you if the only result is you are turning around bending over and saying how's that? the angle right for you? 

A salesman impresses me when he controls the situation in a positive way that leads the sale down the path defined by the company the salesman works for. I'm not impressed by a salesman who's only skills are say Yes, Sir! That's an order taker to me not a salesperson.

Now, if your business model works for you because you have developed a method to compensate for your lack of being able to avoid giving break downs, that's fine. No problems, more power to you. There are lots of ways to skin the cat in home improvements.

BUT - don't think because you have to give break downs that it's a given that without doing it we are all alienating our customers. That's not the case at all. I've closed plenty of contracts where customers have requested break downs. All it takes is about 30 seconds to get over that request and move on with everybody feeling rosy and happy.

These are the most imporatant things to know in any business:

*#1 You are going to get the type of customers you advertise for. *

*#2 Advertise for the customers you want.* 

Break downs and line items are a rare request for me because I follow #1 and #2. I might get asked for a break down about once every couple of months or so. Out of those who ask I'd say 75% or more of them are asking for reasons other than those that we think are the bad reasons customers ask for that. When you break those percentages down the whole issue of line item and break down request doesn't even get in my top 100 things I would look at as an issue in my construction company. I may have it wrong but it seems like it's an everyday occurance for you. 

If a customer needs it for a construction loan or an insurance claim in order to qualify for the money, that's one thing. It's quite another if a large percentage of just plain ole residential customers are requesting this of you. 

If that's the case I can absolutely guarantee you are bringing that on upon yourself with the way you are positioning yourself in your market place. People do not walk into a McDonald's and be shocked and upset that there is no Whopper on the menu or that there are no Taco Grande's on the menu.


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## RidgeWalker

Mike,
Your response reminds of the person who's just about to tell a lie and the lie follows, "To be honest with you....". I mean no disrespect, but what I'm about to say is going to disprespect you.

To me your post assumes that I'm a completely weak salesmen because I choose to provide a breakdown should a client request one. If that is the case that's fine, however it is far removed from the truth but I feel no need to prove anything to you about my abilities. I'm definetly not hear to bow to any ones feet to impress or gain respect.

If I am right, your judging me based on a small portion of the overall relationship we have as contractors with our clients. That's ok too, it's your perogitive to do so.

The statement you make about the 2 most important things to know in any business is either your opinion of the opinion of some one else that you believe it. I agree they are important but not the 2 most important. However I don't feel the need to disagree and debate that statement because you have your beliefs and I have mine. Trying to convince another business owner that he re-evaluate his position on a topic can be like pulling teeth in many cases. I don't bother with it.

The OP asked for advice on what do to about the clients request. He didn't ask us to pound each other for having differant views about his question.

I posted my opinion based on my experiance and that's it, I feel no need to knock how other people respond. You stated that I have a Huge misconception, by who's standard is it a misconception? Your's? If that's the case an I suppose to change everything I believe because your the established industry authority figure? I think not, and I no doubt believe that you are smart and successful in your business but I won't engender myself to you based on your responce to my views.


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## A W Smith

let me preface by saying that I have only read the fist page of this thread at this time.

They want a breakdown? heres what you do, 

break out the phases of the job by trade or work division

material and labor together (don't break them out)


demo
grade preparation and excavation
foundation
slab
framing
block out and or truss setting
sheathing
set man doors and windows
garage door
roofing
siding
grade and seed
now this is very important. include a hidden set up and clean up charge for each one of these phases, the total itemized breakdown should go way above your contract bid

Right about then your potential client should have their nervous breakdown that they wanted.

the final line should be the discount for an all inclusive complete job which should be your original bid total. This will shut the client up, it will dissuade him from shopping the phases out as it will remove his "discount'. Explain to him that keeping the entire job under your control removes unknown variables and thats where the discount comes in. lets say he wants a door supplier of his own or goes the box store route. go back to the non discounted total for the entire job because he has just exposed you to an unknown element of risk and contingency.


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## Mike Finley

RidgeWalker said:


> Mike,
> Your response reminds of the person who's just about to tell a lie and the lie follows, "To be honest with you....". I mean no disrespect, but what I'm about to say is going to disprespect you.
> 
> To me your post assumes that I'm a completely weak salesmen because I choose to provide a breakdown should a client request one. If that is the case that's fine, however it is far removed from the truth but I feel no need to prove anything to you about my abilities. I'm definetly not hear to bow to any ones feet to impress or gain respect.
> 
> If I am right, your judging me based on a small portion of the overall relationship we have as contractors with our clients. That's ok too, it's your perogitive to do so.
> 
> The statement you make about the 2 most important things to know in any business is either your opinion of the opinion of some one else that you believe it. I agree they are important but not the 2 most important. However I don't feel the need to disagree and debate that statement because you have your beliefs and I have mine. Trying to convince another business owner that he re-evaluate his position on a topic can be like pulling teeth in many cases. I don't bother with it.
> 
> The OP asked for advice on what do to about the clients request. He didn't ask us to pound each other for having different views about his question.
> 
> I posted my opinion based on my experience and that's it, I feel no need to knock how other people respond. You stated that I have a Huge misconception, by who's standard is it a misconception? Your's? If that's the case an I suppose to change everything I believe because your the established industry authority figure? I think not, and I no doubt believe that you are smart and successful in your business but I won't engender myself to you based on your response to my views.


Nope, don't take it there. This is simple. You said and I quote:



RidgeWalker said:


> Transparency. In todays world when a single blog or forum post can bring huge company to their knees prospects are realizing that they want companies who are transparent, or in other words don't feel they have to hide information from their clients.


Maybe your clients do. My clients could careless. Transparency is the last on the list.

Ridge you can argue it all you want. I'm telling you my experience you are telling me yours. I'm not saying in your business that what you are saying is wrong, I saying that as a blanket statement that's not right. My experiences disprove it on a daily basis.




RidgeWalker said:


> The second a prospect askes for a client breakdown you know if you refuse you just created a certain level of suspicion and distrust. They are asking themselves, what's he got to hide.


Again, maybe in your business that is true and you are relating your experiences based on what you do for a living. In my business that is not the case and therefore it's not the case in others either. 

Again, this subject is absolutely no different then the mark up materials subject. The argument is always smoke and mirrors by those that say don't do it. The bottom line is that issue and this one have NOTHING to do with anything but SALES AND MARKETING. Those that don't mark up always end up admitting that the bottom line reason for it has nothing to do with ethics or all the other smoke screens they put up, they always finally admit it has everything to do with making it easier to make the sale.

This subject is no different. Weak salespeople fall back upon weak tried and true tactics - I don't mark up materials, I will give them to you at cost if you choose me. or You want a break down, here it is... those are no different you actually said it yourself right here, you intimate that it is nothing more than a sales tactic-



RidgeWalker said:


> That's a risk of course, but if you are the only 1 out of 3 or 4 contractors they spoke with that gave them a breakdown how does that make you appear to them?
> 
> Transparent, trustworthy, and confident.


Again, show me anybody who uses those two tactics against somebody who doesn't and you're showing me the first person is a weak salesman the second isn't. I don't know how anybody would even begin to say that isn't so. It's no different then a person who sells by dropping the price. No different. The Mantra that connects all those types is this - the instant the customer puts up anything even resembling an objection the salesperson drops his pants. That's an inexperienced salesperson who hasn't developed the skills to work around these very simple issues.

As for this:


RidgeWalker said:


> There's something else many of us need to take heed to. Every singe thing you post on forums is forever recorded on the internet and how we respond here can be seen by any one with just a few keystrokes and a mouse click. Many of us have linked to our web sites and our profiles actually give our locations. I personally think back at how I responded on post's and regret that it is forever recorded.
> 
> Yes this is probably better of as another thread but some of the responses here concern me in that we don't fully realize the implications and ramifications our postings can have on our industry as a whole and on our business individually.
> 
> So,
> If the client asks for a breakdown choose yourself what you want to do, I know what I'd do. Transparency!
> 
> PS: At the time I posted this the forum had 35 unrigistered viewers, who do you think they are?


My real name is on every post I make, my company website is on every post I make. I'm not hurting for business or profits, and I'm absolutely 100% NOT transparent.

Don't take it personally, this isn't about you personally, only your blanket statements that without transparency there is no outcome other than you are viewed as untrustworthy or suspicious.

Again and this is the last time I can say it - maybe this transparency thing is a huge problem for you in your business and what you do, it isn't in mine and many others so the only issue there is, really about transparency is if you don't have the skills to over come it, or if you are attracting customers who are hammering you on this issue, either develop better sales skills or develop better marketing to get better customers. Some of us can do this and some of us can't. Nothing more than that.


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## RidgeWalker

Mike Finley said:


> Nope, don't take it there. This is simple. You said and I quote:
> 
> 
> 
> Maybe your clients do. My clients could careless. Transparency is the last on the list.
> 
> Ridge you can argue it all you want. I'm telling you my experience you are telling me yours. I'm not saying in your business that what you are saying is wrong, I saying that as a blanket statement that's not right. My experiences disprove it on a daily basis.
> 
> 
> 
> 
> Again, maybe in your business that is true and you are relating your experiences based on what you do for a living. In my business that is not the case and therefore it's not the case in others either.
> 
> Again, this subject is absolutely no different then the mark up materials subject. The argument is always smoke and mirrors by those that say don't do it. The bottom line is that issue and this one have NOTHING to do with anything but SALES AND MARKETING. Those that don't mark up always end up admitting that the bottom line reason for it has nothing to do with ethics or all the other smoke screens they put up, they always finally admit it has everything to do with making it easier to make the sale.
> 
> This subject is no different. Weak salespeople fall back upon weak tried and true tactics - I don't mark up materials, I will give them to you at cost if you choose me. or You want a break down, here it is... those are no different you actually said it yourself right here, you intimate that it is nothing more than a sales tactic-
> 
> 
> 
> Again, show me anybody who uses those two tactics against somebody who doesn't and you're showing me the first person is a weak salesman the second isn't. I don't know how anybody would even begin to say that isn't so. It's no different then a person who sells by dropping the price. No different. The Mantra that connects all those types is this - the instant the customer puts up anything even resembling an objection the salesperson drops his pants. That's an inexperienced salesperson who hasn't developed the skills to work around these very simple issues.
> 
> As for this:
> 
> 
> My real name is on every post I make, my company website is on every post I make. I'm not hurting for business or profits, and I'm absolutely 100% NOT transparent.
> 
> Don't take it personally, this isn't about you personally, only your blanket statements that without transparency there is no outcome other than you are viewed as untrustworthy or suspicious.
> 
> Again and this is the last time I can say it - maybe this transparency thing is a huge problem for you in your business and what you do, it isn't in mine and many others so the only issue there is, really about transparency is if you don't have the skills to over come it, or if you are attracting customers who are hammering you on this issue, either develop better sales skills or develop better marketing to get better customers. Some of us can do this and some of us can't. Nothing more than that.


Guess what Mike, you get the last word. Good day.


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## Mike Finley

:laughing:

I'm not sure what that gets me, maybe a free cup of coffee somewhere?

Sorry, you shouldn't ask for somebodies perspective if you're not ready for the answer they might give you.



RidgeWalker said:


> (Mike) Please explain what else not providing a client a breakdown who askes for one produces in the relationship? I'd like to know your perspective about it.


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## Brock

I'm taking the last word on this thread. It is officially closed....Good Day


...


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## duckdown

bwalley said:


> how much transparency should we give the client?
> 
> Should they know exactly what we pay for everything and how much we pay for labor and then let them decide how much we should be able to make?


You are assuming that everyone asking for a breakdown is attempting to stick it to you. Maybe they have gotten burnt before with contractors who use suboptimal materials. Enumerating the materials is one way for a consumer to be protected.

For example, I could use old cheap caulk I had lying around in the truck that went through several freeze/thaw cycles or I could use some fresh stuff. The homeowner wouldn't know that I took a shortcut until after the warranty period. If they know exactly what materials they are receiving, they will be much happier.


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## Tscarborough

Enumerating the materials is called "plans and specifications". No quantities need be given, just the products to be used.


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## Mellison

duckdown said:


> You are assuming that everyone asking for a breakdown is attempting to stick it to you. Maybe they have gotten burnt before with contractors who use suboptimal materials. Enumerating the materials is one way for a consumer to be protected.
> 
> For example, I could use old cheap caulk I had lying around in the truck that went through several freeze/thaw cycles or I could use some fresh stuff. The homeowner wouldn't know that I took a shortcut until after the warranty period. If they know exactly what materials they are receiving, they will be much happier.


 
Apples and oranges Duck,
What you are describing is a case of ethics. Knowingly providing a substandard product is unethical.


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## silvertree

I hear good arguments for itemized or lump sum bids. I also agree sectioned bids are good. I don't believe anyone can convince me one is better, because like most things these bids are as good as you make them to be.
No winner here in my opinion. 
I like lump sum, with a detailed scope and a materials list with the allowance.
If your customers are picking the bid apart, communication got weak somewhere during the sales process.


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## J F

Cost breakdowns = *our proprietary business info*. Even though we charge for estimates, there is no cost breakdown except for options the client may be considering....the couple of times I've done any sort of total cost breakdown were just total headaches, always having to re-justify our prices...not worth the hassle...very few clients (or "contractors" it seems sometimes) have any understanding of the true costs of running a legit business.

I'm not saying there aren't people out there that can make this work (total open book contracting), but I'm sure as hell not one of them.

When you go buy your next new truck ask the sales guy how much each tire is, or the cost of the carpeting, or better yet, what their _real_ profit on the vehicle is....be prepared to see this...:blink::blink::blink:

In our contracts our payment schedule is broken down like below, and yup, we're _always_ ahead on payments...if a client wanted to go cuckoo on us, we've already been paid for all work performed, _before_ it's begun, _including_ profit.

And the last payment is a very small percentage of job, due upon _substantial_ completion, NOT "completion".

** Contract Deposit Payment:* (20%) $ 47,232.00

** Second Payment:* At finish of demo work and framing stage, 
 prior tostart of plumbing rough-in, HVAC rough-in, electrical 
 service upgrade, electrical rough-in and cabinetry 
 measurement/order $ 53,826.00

* *Third Payment:* Prior tostart of sheet rock, trim carpentry
 and tile order $ 36,375.00

* *Fourth Payment:* Prior to start of painting, tile installation, 
 and carpet order $ 36,375.00

* *Fifth Payment:* Prior to start of cabinetry delivery /installation,
 countertop measurement/order $ 36,375.00

* *Sixth Payment:* Prior to start of counter top installation, 
 hardware installation, plumbing/HVAC/electrical/low voltage
 trim outs, carpet installation and painting touch-up $ 24,625.00


* *Final Payment:* Due upon Substantial Completionof all
 work under this Agreement: $ 1,355.00


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## NWBuilder

Profit is what the company make to reinvest etc... it is not what is left over for you to buy groceries!


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## NormW

great thread :thumbsup:

Tagging it, so I can come back to read all of it...


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## Wood Worx

I come across this often. I am not afraid to show a breakdown. It will show each trades cost, materials, what ever else and then my GC cost. The customers I have done this for appreciate knowing what the costs are. I dont typically mark up my subs because my profit and overhead will be sufficient. As far as materials go, retail price is what I charge the customer. I can make a little extra on that with the discount I get. Give him the breakdown and see what he thinks. Just make sure you spell out all the descriptions of work to be done. Clearly show your GC price. If your good and have some great references, he should be happy to work with you.


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## Leo G

If you have perfect subs, don't need to be told what to do, never screw up, always show on time, clean up after they are done - then the minimum you should add is 10%. You are losing money by not tacking a small surcharge on their fee. You have to do work to get them there and then follow up. You should get paid for that.


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## KennMacMoragh

Can someone list out more specifically what problems they've had by giving the customer a breakdown? I am usually fairly specific with my bids and give them a breakdown, I haven't had any problem with it :001_unsure:


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## Winchester

KennMacMoragh said:


> Can someone list out more specifically what problems they've had by giving the customer a breakdown? I am usually fairly specific with my bids and give them a breakdown, I haven't had any problem with it :001_unsure:


Some customers:



start wanting to negotiate on different items.
want you to justify each line
start asking you if you can just do "this part" and they'll get someone else to do "that part"
think they have the right to know everything going on in your business and how it runs


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## SelfContract

*Mental breakdown* !?? :laughing:


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## 480sparky

KennMacMoragh said:


> Can someone list out more specifically what problems they've had by giving the customer a breakdown? I am usually fairly specific with my bids and give them a breakdown, I haven't had any problem with it :001_unsure:


Just what Winchester said.

As soon as the customer gets a breakdown, they start picking it apart with the sole reason of saving money. And in the customer's mind, saving money means you lowering your price.

"How much for just that!?!?! Geez that seems like a lot!"

and

"You're really marking that stuff up thirty percent! Man, what a rip-off! If I were in business, I'd never do that to my customers!"

"Wow! My cousin Fred can do that for half that."

"I don't really see why you need to do this, so we can take it out of the price."



Next time you go to the grocery store, ask for a breakdown on the cost fo a loaf of bread. Let us know how that goes.


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## KennMacMoragh

480sparky said:


> Just what Winchester said.
> "Wow! My cousin Fred can do that for half that."


I guess I have had experiences similar to this. I did a bid on fixing up some apartments for lady and gave her a bid which I thought was really low, probably about half of what most large remodelers would charge. I gave her a detailed estimate, she picked it apart and said it was too much, so she had her son in law do it for free. But why would she even want me to give her a bid? How am I supposed to compete with her son in law who does it for free?

But take the garage for example, maybe the homeowner wants a breakdown of each item such as frame, concrete, siding, roof, garage doors and openers. Maybe they have some time and want to put on the roof themselves. I wouldn't have a problem with them having me do most of it while they do some of the easy stuff themselves, as long as they were reasonable and could work things out.

But I do see what you mean, some people are just stupid and think they know more than we do about how to price out our work, and they'll pick it apart however they can.


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## Zinsco

I can't remember a home owner ever asking me for a cost breakdown, but almost every general contractor on the planet does. They either want complete and accurate parts and labor breakdown or they want you to fax them your "price list", ie: what I charge for each switch, dimmer switch, decora switch, occupancy switch, vacancy switch, receptacle, GFI receptacle, TV outlet, Phone outlet, smoke detector, fart fan, ceiling fan, dishwasher, disposal...

This really F'ing irks me, I just say "my estimating software arrives at a grand total, I don't know what the cost would be for each item".
.
.
.


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## Zinsco

SelfContract said:


> *Mental breakdown* !?? :laughing:


Nervous break down! I love it! I'm gonna say "I only do nervous breakdowns, sorry".


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## WilsonRMDL

I think it depends on the customer. When a customer basically tells me at the initial consultation for the project that the job is mine, or mentions things like after your done with this job I want this and this done, etc. I will give them a break down of costs when I bring over a contracto to be signed. 

If the customer seems like a pain and wants to know how much, how long, and if I get a discount at HD or Lowes, their price is a grand total, and it get's marked up because I already plan on them trying to negotiate, and being a pain the entire job.


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## Ashcon

I think that if you want to be completely honest with your client and give a break down than go for it. If a customer wants a break down to see what my margins are I would do it on one condition.
Ho- Ashcon we need to see a break down so I can see where my money is going:shifty:
Ashcon- No problem Mr. Ho I just need to see your checking account to see where my money will be coming from!:laughing:
If they don't want to show me the money for the project is in order than I don't need to share any more details for the project, because it probably is not going to happen.
An excavator and I were talking about chasing people for money and he said it best..."If I go into sears or walmart and I want to take something out of their store In need to pay for it before I leave. These companies are wealthy beyond belief but me a pion I gotta give everyone I do business with credit":notworthy
Why are we second class citizens just because we choose to get dirty for a living? Sorry for the rant these are my thoughts not yours!


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## kcremodeling

You posted this in the wrong spot here but I am really glad you did. I just read a great post by JF, right in the midst of putting together an estimate to finish a basement.

The example of asking a car salesman to give you a price on the carpet really made sense to me. I have been breaking down my estimates by line item for years now and I now realize that it is not necessary. :thumbup:


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## kcremodeling

Now the previous post is gone...


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## ohiohomedoctor

kcremodeling said:


> You posted this in the wrong spot here but I am really glad you did. I just read a great post by JF, right in the midst of putting together an estimate to finish a basement.
> 
> The example of asking a car salesman to give you a price on the carpet really made sense to me. I have been breaking down my estimates by line item for years now and I now realize that it is not necessary. :thumbup:


I break most of my basements down by line item and labor and material so the ho can see how we got to the number we did. I wish I didnt, but I have been told several times that we won the project because we were the only ones who did. I like jfs explanation but my goal number 1 is to sell the job. One day Ill be the pimp jf is, maybe, probably not. :thumbsup:


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## kcremodeling

ohiohomedoctor said:


> I break most of my basements down by line item and labor and material so the ho can see how we got to the number we did. I wish I didnt, but I have been told several times that we won the project because we were the only ones who did. I like jfs explanation but my goal number 1 is to sell the job. One day Ill be the pimp jf is, maybe, probably not. :thumbsup:



I'm not going to do it anymore. I have bean beat up too many times by my own contract... If that makes any sense. :laughing:


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## kevjob

I give allowances for fixtures, carpet etc... That is the only breakdown they need to see. They dont ever see labor or what I pay for sheetrock or tile backer. The people who want breakdowns in my experience are looking for ways to eliminate your markup and profit. 

I will never give a line item to anyone other than my accountant.


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## larryb

They can't have one! 

Fortune cookie says; "Giving breakdown may cause breakdown"

"Breakdown" prospects are looking for ways to save money (which is fine) as long as they are willing to take a chance that the breakdown agreeable contractor who will likely have to start cutting profits will do the same work as a pro contractor who knows how to price their work so they can stay profitable and stay in business for the long term.

NO breakdowns, get outta here, nada, uh-uh, nope


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## AJAX

For me it depends on the job or the person. I have an architect that I do jobs for which I break it down, to an extent. 

If it's a big project and Owner knows JoeBlow that can do "that part" of it cheaper. That's fine, "did you read my contract"?

Contractor shall not be liable for any delays due to owner/designer supplied materials or other contractors not being on site at the time indicated by other contractors. Owner agrees to pay a $125.00/hr fee per man hour for any delays in scope of work. $0.80/mile for contractor having to deliver owner supplied materials. Contractor does not accept warranty liability for owner-supplied materials.

8. MATERIALS FURNISHED DIRECTLY BY OWNER AND WORK PERFORMED BY OWNER’S SEPARATE CONTRACTORS: Until such time as Contractor has completed 100% of the project work, any materials provided directly by the Owner on the project and any work performed by Owner’s separate contractors on the Project must be supervised by the Contractor. 

Owner agrees to furnish Contractor with copies of all contracts with separate contractors whose work relates to, enhances, or is in conflict with, the project outlined in this agreement. Failure or refusal of Owner to furnish Contractor with the documents referred to herein within 10 days of the date that the Owner signs these documents will be considered a material breach of contract by Owner. Furthermore, for insurance and liability purposes, Contractor has the absolute right to pre-qualify and approve or reject Owner’s separate contractors in the following respects: proper work experience, proper licensing, proper and adequate insurance (both worker’s compensation in statutory form, as required by law, and Comprehensive General Liability insurance in “occurrence form”), ability to meet Contractor’s scheduling requirements, and any other standard subcontractor qualification criteria Contractor routinely employs. Prior to commencing any work on the site and prior to the Owner signing any contract with the separate contractor, Owner’s separate contractors must name Contractor and Owner as “additional insured” on separate contractor’s Comprehensive General Liability insurance policy and provide an insurance binder to Contractor showing Contractor and Owner have both been named as “additional insured” under that policy. 

Contractor may prevent Owner’s contractors who have not been pre-qualified/approved by Contractor and submitted an insurance binder as described herein, from working on the site. If Owner wants to avoid providing this information, Owner must then bring in his separate Subcontractors only before or after Contractor has performed all of his work on the project. 
If Owner fails to comply with all the terms of this section of the Agreement without penalty of any kind whatsoever to Contractor, Contractor may, at Contractor’s sole discretion: 1) stop all work on the project until Owner has complied with the terms of this section of the Agreement, eject any non-qualified and unapproved separate contractor from the site, and keep the job idle; or 2) after giving Owner 10 days advance written notice of this breach of contract, if not cured by the Owner within 7 days of receipt of Contractor’s written notice, terminate this Agreement for Owner default as described herein, perform no further work of any kind on the Project in the future (including punch list/warranty work), and bill the Owner for all work completed to date. These amounts will then be due and payable by Owner upon receipt of the Contractor’s invoice and Contractor shall remove all equipment and stored material from the site, cancel all contracts with subcontractors, and have no further liability or responsibility of any kind whatsoever to the Owner.

Nothin is easy...:no:


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## jimmys

Mine just says "Owner or third party may not provide materials, labor, or subcontractors for this project without permission of Contractor."
Regarding line items, that's the way I spec out a job. I rarely have anyone try to beat me up on the lines, and it limits what I am required to provide. If there's no spec, how do you know (and how does the HO know) what the job is. (Most of our work has a designer, not archy).
Jim


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## gemal

If the customer insists on a breakdown, and if you feel that it might close the deal, I submit the following as the final line item and add a number or a percentage. This usually indicates to a client that not all the costs are reflected in labor and materials. So as long as were being transparent they might as well let them know what other costs are involved with the proposal. Feel free to copy and paste and edit to your taste




Overhead and expenses included but not limited to general liability insurance, depreciation, staff and office, taxes, materials and supplies, transportation and deliveries, marketing and legal expenses, accounting, purchasing, expediting, estimating and planning, permit processing, inspections and testing, cost management and project management.


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## Leo G

If the scope of the work changes the price changes. If you have 3 jobs built into one project (Drywall, painting, flooring for example) and they decide that your drywall price it higher than some other guy but the rest are good, they don't get to keep those ala cart prices. Now it might not be worth it for you if you only do two aspects of the project. Price of those 2 now goes up.


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## Calidecks

Give them breakdown of their cost not yours. 


Mike.
_______________


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## 480sparky

gemal said:


> If the customer insists on a breakdown, and if you feel that it might close the deal, I submit the following as the final line item and add a number or a percentage. This usually indicates to a client that not all the costs are reflected in labor and materials. So as long as were being transparent they might as well let them know what other costs are involved with the proposal. Feel free to copy and paste and edit to your taste
> 
> 
> 
> 
> Overhead and expenses included but not limited to general liability insurance, depreciation, staff and office, taxes, materials and supplies, transportation and deliveries, marketing and legal expenses, accounting, purchasing, expediting, estimating and planning, permit processing, inspections and testing, cost management and project management.



Rookies. :whistling


Step back, son. Here's how the real pros do it.

*Business Cost List*

*Building*
Building 
Warehouse Space
Trash Removal
Lawn Care
Snow removal
Upkeep & Repairs

*Office Expenses*
Computers
Stationary
Copy machine
Fax machine
Forms
Printing
Software
Office Equipment
Computer maintenance
Files
Postage
Office Supplies

*IT*
Internet service
Email accounts
Web site
-Initial creation
-Updating
-Maintenance
GPS services

*Benefits*
Vacation Pay
Holiday Pay
Uniforms
Uniform Maintenance
Unemployment
Bonuses
Incentives
Retirement Plan
Christmas Party

*Taxes*
Property Taxes
Tangible Taxes
Pay Roll Taxes
Income Taxes
Sales Tax

*Training*
Management Training
Office Training
In-House Training
Tech Training
Mfg. Training
Training Equipment
Safety Training
Update classes
License testing
OSHA compliance
RRP compliance

*Insurance*
Building Insurance
Liability Insurance
Employee Insurance
Life Insurance
Business Insurance
Workers Comp.

*Utilities*
Gas
Electricity
Telephone / Fax lines
Internet Service
Toll Calls
Telephones
Pagers/Cell Phones
Radio Maintenance

*Vehicles*
Vehicle Maintenance
Ladder Racks
Interior bins
Fuel
Truck Signs / lettering / vinyl
Tires

*Financial*
Accounting
Loans
Tax Preparation
Interest
30+ Day Receivables
Bank Charges

*Travel*
Hotel
Meals
Airline / vehicle

*Unique to the electrical trade*
Permits
Licenses
Bonds
Inspections
Trade Association
Subscriptions
Memberships
Dues
Retainers
Safety PPE
-Lock-out/Tag-out kits
-Fall prevention harness
-Arc-flash clothing
-Hard hats
-Safety glasses
-Hearing protection

*Tools*
Company Tools
Safety Equipment
Ladders
2-way Radios
Test Equipment
Replacement Parts
Parts Storage
Damages
Tool Replacement
Job site storage

*Misc.*
Trips to Supply House
Theft
Uncollected Money
Collection fees
Unbillable Hours
Commissions
Call Backs / Warranty work
Shortages
Bad Checks
Delivery
Credit Card Sales
Drug Testing

*Legal *
Legal advice
Law Suits
Incorporation / LLC fees

*Advertising*
Marketing
Business cards
Signs
Radio / TV
Newspaper
Flyers / brochures
Material Purchases
Inventory

*Labor*
Wages
Salaries
Dispatcher
Answering Service


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## Mordekyle

Leo G said:


> If the scope of the work changes the price changes. If you have 3 jobs built into one project (Drywall, painting, flooring for example) and they decide that your drywall price it higher than some other guy but the rest are good, they don't get to keep those ala cart prices. Now it might not be worth it for you if you only do two aspects of the project. Price of those 2 now goes up.




I do a la carte style estimates and pricing on my jobs which consist mostly of repairs. A lot of handyman type stuff as well.

After having a customer choose the items with the least margin for me and reject the profitable ones, I decided that each line item has to be profitable in itself.

Now I don’t mind if somebody only picks some of the items, as they are all profitable.


Sent from my iPhone using Tapatalk


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## VinylHanger

Yep. And if they decide not to have me paint, or demo, etc, I only pull 75 percent of that section off. Each job stacks on each other and makes it profitable. 

If I have to do all the drywall, tape, patch and texture, but they want to paint the walls, they arent going to save much if any.

Ornifntheybwant to do the demo after we are started, it isn't a huge discount depending on demo.

However, if they want to do the demo and are competent I give a big discount because demo slows me down as a solo guy.

Sent from my SM-N975U using Tapatalk


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## Leo G

Mordekyle said:


> I do a la carte style estimates and pricing on my jobs which consist mostly of repairs. A lot of handyman type stuff as well.
> 
> After having a customer choose the items with the least margin for me and reject the profitable ones, I decided that each line item has to be profitable in itself.
> 
> Now I don’t mind if somebody only picks some of the items, as they are all profitable.
> 
> 
> Sent from my iPhone using Tapatalk


Well I generally don't set it up as ala cart. It's the whole job here's the price. If at that point they want it broken down if they added up the totals they'd find thing's seem a bit higher.

Handyman work is easier to break down into separate jobs. Lots of other contracting isn't. You have your guys you use and trust. You might pay them more than some other company because you trust them to do it the way you want without holding their hands. That counts a lot. But the client only sees the price.


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## Ray Raby

some of you contractors are hilarious. As with anything in life, lack of transparency enlightens either dishonesty, deceitfulness, or reluctance to substantiate/be proud of your business practices. If your not gouging on parts and your not gouging on labor, be proud of giving a breakdown and stand by your pricing, service and expertise…. FYI- for those of you that are afraid of giving a breakdown “because it causes problems”- do you realize that you’ll lose 99% of those jobs because of distrust? Use your heads….


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## Leo G

Telling them this that and the other thing I'm doing will cost this much.

That's what they need to know. You have no obligation to make a parts list other than specific special order things.


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## 480sparky

Ray Raby said:


> some of you contractors are hilarious. As with anything in life, lack of transparency enlightens either dishonesty, deceitfulness, or reluctance to substantiate/be proud of your business practices. If your not gouging on parts and your not gouging on labor, be proud of giving a breakdown and stand by your pricing, service and expertise…. FYI- for those of you that are afraid of giving a breakdown “because it causes problems”- do you realize that you’ll lose 99% of those jobs because of distrust? Use your heads….


I suppose you go into a grocery store and demand to know how much you're paying for that bread wapper, or how much the sugar cost that's in your Twinkies.


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## reggi

I think Ray was trying to get some work done around the house, and when he requested a breakdown, he got this:



Aggie67 said:


> "Hi Mr. HO, I wanted to touch base again about breaking our number down. Hopefully the scope I provided in the bid covered everything you wanted. And if you're getting other numbers, hopefully they were as a thorough in describing what will be built as we were, so you can compare apples to apples. I'm confident I had a solid grasp of what you were looking for, even without drawings. We do great work, and we know we'll make you happy you chose us. But frankly when we bid work, we roll a lot of unit costs together to come up with a number, and it's not an easy task to break labor apart from materials. If your concern is controlling costs while still getting a good job done, then as long as the bidders are bidding on the same scope of work, your apples to apples dollar comparison will fall out right there on paper. If you have something else that's concerning you, let's talk about it and see if we can address them. But unfortunately breaking the bid down further isn't normal, and it sends up red flags when we see that in lump sum bids. We've never done that before."



And he googled it and that's how he found this 12-year-old thread and our den of dishonest and deceitful contractors.


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## Calidecks

Ray Raby said:


> some of you contractors are hilarious. As with anything in life, lack of transparency enlightens either dishonesty, deceitfulness, or reluctance to substantiate/be proud of your business practices. If your not gouging on parts and your not gouging on labor, be proud of giving a breakdown and stand by your pricing, service and expertise…. FYI- for those of you that are afraid of giving a breakdown “because it causes problems”- do you realize that you’ll lose 99% of those jobs because of distrust? Use your heads….


Where did you get the 99% number? 

My customers don't give me the other guys bid either. 

My costs are proprietary just like the customers "other bids".

The customer is only entitled to their costs not mine. 


Mike.
*___*


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## Ray Raby

Wow- touchy touchy…. Yes- customers simply want to know parts Vs labor. That’s pretty normal. Why would there be SUCH a sensitivity and lack of transparency unless your business model is to gouge? Be honest..


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## reggi

Parts vs labor is an unnecessary distinction. The price is at the bottom of the page.

If I order an attachment for a piece of machinery, it's none of my business what the factory pays their labor. Moreover, I don't even give a hoot. If I can't afford something, I don't buy it and I don't cry over the eternal mystery behind the pricing.


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## Calidecks

Ray Raby said:


> Wow- touchy touchy…. Yes- customers simply want to know parts Vs labor. That’s pretty normal. Why would there be SUCH a sensitivity and lack of transparency unless your business model is to gouge? Be honest..


Define gouge


Mike.
*___*


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## Ray Raby

Do you not know what you charge for labor? If not, shouldn’t have a business. If you hide what you charge for labor….. why?


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## Tinstaafl

Ray, while you're stirring the pot, how about an introduction? What do you do for a living?


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## reggi

Of course I know, and it's none of anybody else's business. I bid flat price work. This is the scope and here's the price. If you want that done, I'll wave my magic wand, show up with hundreds of thousands of dollars worth of trucks and construction equipment, and pay guys to help me.

What I'm paying them is immaterial to you.


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## Ray Raby

So basically everyone is scared shirtless to reveal a materials and labor breakdown if asked. That’s hilarious and very telling. And that- my friends- is why people want a labor and materials breakdown. Let’s say your transmission breaks down. You’d mechanic says $5000 to fix. Then you find out the transmission costs $1000 and then the mechanic charged you $2000hr for 2hrs work. I don’t know- would that be gouging? What would be your thoughts if it were you. Would a materials and labor breakdown be helpful- let’s say if you were comparing/getting estimates form different mechanics? Bus seriously- the unwillingness is very telling and shady.


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## reggi

You're free to shop around and compare that $5,000 to other prices.

If shop A says $5,000 and shop B says $3,500, that's all the information you need.

It's not a matter of being "scared shirtless", it's good business sense not to tell everybody and their brother what you're paying for rent, payroll processing, insurance, truck payments, etc.

I have a small fleet of diesel trucks that I have my mechanic service when I'm too busy. IDGAF what he pays for his filters. I only want to know which filters he's using (this is the spec) and what I'm going to pay him. From there I can decide if I want to drive all over town shopping around on my great mechanic to save $40 cause I'm a cheap prick, or if I just give him the business cause he's competent and I trust him.

You're a ****ing wackjob, honestly.


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## reggi

Here's another perspective: as technology advances, firms need more capital to be competitive (machinery and so forth). So the labor component goes down and the fixed asset costs go up. These require insurance, interest, real estate to house the machinery, maintenance, etc.

What does an hourly rate for an operator have to do with what it costs the contractor who employees that operator to be in business? To own that stuff?

How does the lay prospective customer make sense of a $70/hr labor charge for a man or woman who's operating a $200,000 machine? How about a $1,000,000 machine?

When you buy airfare, do you ask what the stewardess is making? How much they pay for jet fuel?


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## Ray Raby

Well we’ll have to agree to disagree. No one is asking what you pay for rent, what you pay your employees or how much your tricks cost. If I’m building a house, I’d like to know what I’m paying fir materials and labor. If I’m having an air conditioner installed, I’d like to know how much the air conditioner costs and what I’m paying for installation. If I’m having my house painted- I’d like to know materials and labor. Again…. Why so, so, so afraid of telling a customer- hers the price for materials, and here is the price for labor.


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## reggi

Why do you assume that fear is an element?

Do you ask the airline what they pay their labor?

How about their materials? That's jet fuel, deicing solution, and catered meals. Do you ask them for that?


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## Leo G

Ray Raby said:


> Wow- touchy touchy…. Yes- customers simply want to know parts Vs labor. That’s pretty normal. Why would there be SUCH a sensitivity and lack of transparency unless your business model is to gouge? Be honest..


The only reason they want to know that is to rip the job apart, find out how much you really make and see if the other guy can do that part for cheaper.

I ain't having none of it. Here is the scope of work. Here is the special materials you requested and here is the price to do said job. No need to know more.

And if I did give it out and they did start to break the job apart because bob the builder can do this part for less than me. The job gets more expensive because it's done as a package. Some things you make profit off the labor and some off the materials. And if the homeowner can see where you make your profit and can go somewhere else to get "that part" done cheaper then it's not worth it to do the job sometimes.

I suppose you ask what each and every part to your car costs so you can complain that you know a guy who can get it cheaper to make the car more affordable to you.

Job as spec-ed >> price. 

Just like thing on the shelf >> price.

There isn't much difference.


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## Ray Raby

They are not contractors. I also don’t ask for a breakdown to my pizza delivery guy. Contractors are trades that should be well paid for their expertise and labor. When general public is hiring a trade- electrician, plumber, carpenter, tile, air conditioning- etc. Etc- why are we pall pretending that the whole equation isn’t materials and labor? Why the false equivalencies trying to point to other industries? I know those are good practices sound bites to try and combat the position of trying to not be transparent about giving a labor charge. Just say it- you just sont want to because you fear the client will try and talk you down, say you’re charging too much per hour, etc. And that it’s a headache. And that’s why yoh don’t want to be transparent and keep it secretive? I would think that the really good contractors would stand behind their labor pricing and would be worth it….


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## tjbnwi

If I did parts/material breakdown it would change my tax filing. 

Lump sump, I do not have to charge sale tax if I pay it at the source, broken down I have to charge tax on the material. 

Buy a new home, do you get a labor material breakdown?

I know may labor cost down to the minute.

Tom


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## Calidecks

Ray Raby said:


> Well we’ll have to agree to disagree. No one is asking what you pay for rent, what you pay your employees or how much your tricks cost. If I’m building a house, I’d like to know what I’m paying fir materials and labor. If I’m having an air conditioner installed, I’d like to know how much the air conditioner costs and what I’m paying for installation. If I’m having my house painted- I’d like to know materials and labor. Again…. Why so, so, so afraid of telling a customer- hers the price for materials, and here is the price for labor.


What is your trade?


Mike.
*___*


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## reggi

I stand behind my labor pricing, I just don't tell anybody what it is.


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## Leo G

reggi said:


> Why do you assume that fear is an element?
> 
> Do you ask the airline what they pay their labor?
> 
> How about their materials? That's jet fuel, deicing solution, and catered meals. Do you ask them for that?


Yep, I know my costs. I'm sure Bob over there knows his costs. You put up the bid and see who the client chooses. And it's not always about price. Maybe Bob doesn't come over to well, his presentation was lackluster, you don't think Bob has the skills. But your price is 20% higher. Who do you choose? Price or confidence?

Maybe Bob has the same presentation as you and seem just as competent. Bob works out of his house and has very low overhead. Bob gave a better price than you because you have a huge building and can do much larger jobs. Bob gets the job this time.

No one is scared to reveal their prices. No one is going to because it really isn't part of the equation. You want this done by my it's going to cost this. Too much? Sorry, lets reduce the scope. Don't want to? Have a nice day, thank you for calling. You'd like to reduce the scope - great, lets talk and discuss the budget and what you need vs want.


And then there's the other side where client don't want to tell you the budget. Scared are they?


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## Leo G

Yep. Ray, what's your trade?


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## reggi

@Ray Raby , You have to realize that if a contractor does give you a labor and materials breakdown, that the labor rate is just an abstraction - a construct, a thing - that the contractor made up in order to pay their costs and earn a satisfactory profit. Every contractor's costs are different, depending on their level of experience, the volume they do, the investments they've made, etc. For example, large contractors can't do small jobs cost effectively, and small contractors can't do large jobs cost effectively, if they can do them at all.

The bottom line is that it shouldn't really matter to you what the labor rate is, as it's just a bologna number that's being used so the contractor earns enough per hour to cover their costs. If you think the price is outrageous, just get another quote.


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## Donquardo

Our bids and estimates spell out the materials, labor and various mark ups. That's the way the boss wants to do it so I do it that way. At other places I've worked the estimate is just a big number or maybe two numbers, one for labor and one for materials. 

*In any case, the company is being paid to plan, temporarily fund and execute a project. On a fixed bid, the financial particulars of which the homeowner isn't entitled to. The homeowner is entitled to the overall cost.

I want customers who I can make happy without it being a miserable experience for myself and have it be fiscally worth my employer's attention. Some folks want to really delve into the details and I don't mind doing that to a point. But once we've gone to contract and the design work is done, I really do just need to be left alone and not interfered with by the homeowner. So if I sense some red flags before there is a contract I'm going to pass on the project. I think for some guys, lots of questions about mark ups and materials and labor rates is a red flag.


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## avenge

Ray Raby said:


> some of you contractors are hilarious. As with anything in life, lack of transparency enlightens either dishonesty, deceitfulness, or reluctance to substantiate/be proud of your business practices. If your not gouging on parts and your not gouging on labor, be proud of giving a breakdown and stand by your pricing, service and expertise…. FYI- for those of you that are afraid of giving a breakdown “because it causes problems”- do you realize that you’ll lose 99% of those jobs because of distrust? Use your heads….


Are you a contractor if not get out. 33 years not one person knows my labor rate or ever asked I never break down my bids. I'm in business this long one reason being I'm trusted. So let's turn the boat around if you were my customer and you asked for a breakdown the customer isn't trusting me and I don't want them as a client find someone else because I don't trust you.

You're the one that's hilarious and don't know a thing about business of any kind
This site is for professional contractors visit DIY Home Improvement Forum


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## Seven-Delta-FortyOne

First of all, you sound like a bitter homeowner who ran into a contractor too smart to put up with your horse$)(t, and declined to work for you.

Second, “labor” and “materials” are not the only two categories. Anyone who’s ever been in business would know that.

What are disposal cost? Porta-John rental? Permit fees? The rate I charge for my mini-ex, and the transportation cost? Are those “materials”, or “labor”? 🙄

Third, I do as I damn well please. If you, a customer, doesn’t like my price, the way I present it, my work, my face, or anything else, they have exactly two option: hire someone else, or do it your damn self.


You’re not the first home owner to come on here biching because we won’t breakdown “labor” and “materials” for you like a handyman


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## Calidecks

If a customer is wanting a breakdown in my bid they are more than likely shopping price. That tells me we are probably not a fit.


Mike.
*___*


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## Seven-Delta-FortyOne

Ray Raby said:


> parts Vs labor


🤣

I build with “parts”. 😳🤣


Giacass.


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## Leo G

So an excavator is labor?


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## avenge

Anyone remember not too long ago a very similar post? Can't recall what section it was in.


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## 480sparky

Ray Raby said:


> Wow- touchy touchy…. Yes- customers simply want to know parts Vs labor. That’s pretty normal. Why would there be SUCH a sensitivity and lack of transparency unless your business model is to gouge? Be honest..



Why is your default position that someone who doesn't want to provide a break-down automatically gouging everyone? Be honest!


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## Jaws

Ray Raby said:


> So basically everyone is scared shirtless to reveal a materials and labor breakdown if asked. That’s hilarious and very telling. And that- my friends- is why people want a labor and materials breakdown. Let’s say your transmission breaks down. You’d mechanic says $5000 to fix. Then you find out the transmission costs $1000 and then the mechanic charged you $2000hr for 2hrs work. I don’t know- would that be gouging? What would be your thoughts if it were you. Would a materials and labor breakdown be helpful- let’s say if you were comparing/getting estimates form different mechanics? Bus seriously- the unwillingness is very telling and shady.


I have never once wondered how much my mason or electrical contractors bids break down labor/materials/overhead/profit. I don't ask Ford how they priced my new truck either 

It's not "normal" it's normal for a type of client most here don't work for - lots of us have built multi million dollar businesses on word of mouth and referral without breaking down bids. If it's cost plus they get a line item breakdown- if it's stipulated sum they get a fixed cost and Table of Allowances- its $979,375.00 including allowances. 

I'm pretty sure Calidecks isn't breaking his decks down 20% for materials, 20% for labor, 60% for Mike 😆


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## Jaws

@Ray Raby


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## ScipioAfricanus

reggi said:


> I think Ray was trying to get some work done around the house, and when he requested a breakdown, he got this:
> 
> 
> 
> 
> And he googled it and that's how he found this 12-year-old thread and our den of dishonest and deceitful contractors.



Never was there a more wretched hive of scum and villainy than here at ContractorTalk.

Well, except for Mos Eilsey Space Station of course.

Andy.


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## Leo G

How much for a sandwich at the space station. Is it cheaper without mustard?


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## Warren

Jaws said:


> I'm pretty sure Calidecks isn't breaking his decks down 20% for materials, 20% for labor, 60% for Mike 😆


That looks like about the right breakdown though.


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## Tech Dawg

It's kind of like when you ask the doctor for an itemized breakdown of the bill from your visit or surgery... but then he tells you to pound sand. 🤷‍♂️🤦‍♂️


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## Mordekyle

The problem with breaking down into labor is this:

The homeowner sees $200 an hour, or whatever it is, and fixates on it.

He thinks to himself “geez, I have a masters degree and I don’t make that much an hour!”

What he doesn’t consider is that as an employee, he has fringe benefits.

- Pension, retirement, insurance, sickleave,Vacation, etc. employment insurance, social security matching, etc. 

- Not to even mention profit. 

- Not to even mention reward for risk taken.

All of these things come out of the self-employed’s hourly rate. These are things that he has to pay for for his employees and for himself.


How is it gouging if somebody agrees to pay a price for something they can’t or won’t do?

If it seems too much, they won’t pay it.


Sent from my iPhone using Tapatalk


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## hdavis

Ray Raby said:


> some of you contractors are hilarious. As with anything in life, lack of transparency enlightens either dishonesty, deceitfulness, or reluctance to substantiate/be proud of your business practices.


I'm proud of my dick, but I don't show it to everyone who asks.


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## CarpenterRN

Ray Ray reminds me of this gem:


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## Adam_PDD (Truck2go)

Thewoodman said:


> I went and bid a job the other day for a garage additon. Normally I will not bid it if they do not have there plans drawn up. With things being kinda slow I went and looked at it and was able to put together a price for him.
> 
> It was pretty straight forward so I was able to put together a solid bid for him. After talking to him about the price he asked me for a break down of the costs. This is where I am kind of hesitant. I am afraid he is going to take my info and maybe General it himself using my breakdown.
> 
> Am I being parinoid?
> Should I tell him that I will give him a breakdown after he signs with me to build it?
> 
> Your input will be greatly aprriciated.
> 
> Mark


OMG, I hated that too. All customers are savvy these days. Almost all customers ask us for a breakdown in our area. When you thought you are going to close that deal and put all the effort to give them a good proposal, they ask for a breakdown and 100% sure they will take your quote to someone else to get a better bid 💔 or sub it out a certain part of the trades to someone else cheaper. Maybe an entire house remodeling contract as a GC, turning into just doing tile floorings only 😰

I think it makes sense to a breakdown in a Lump sum per category. Our company usually gives a breakdown only when the projected gross goes over 25K, and the breakdown is by trades only. And from that on, if they request even more detailed breakdowns, it will be based on selling skills. Bring up something that other contractors can't afford or something you can do better in. 

Hope this helps .


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## Adam_PDD (Truck2go)

Jaws said:


> @Ray Raby
> View attachment 517552


That reply is good. I even had customer asking : Can you guys not make profit so my cost is cheaper. Dummbbb...lol


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## 480sparky

Yo, Ray Baby! Where'd you go?

Are you too busy providing break-downs for that 100,000s of customer lining up to hire you?


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## KAP

Ray Raby said:


> They are not contractors. I also don’t ask for a breakdown to my pizza delivery guy. Contractors are trades that should be well paid for their expertise and labor. When general public is hiring a trade- electrician, plumber, carpenter, tile, air conditioning- etc. Etc- *why are we pall pretending that the whole equation isn’t materials and labor?* Why the false equivalencies trying to point to other industries? I know those are good practices sound bites to try and combat the position of trying to not be transparent about giving a labor charge. Just say it- you just sont want to because you fear the client will try and talk you down, say you’re charging too much per hour, etc. And that it’s a headache. And that’s why yoh don’t want to be transparent and keep it secretive? I would think that the really good contractors would stand behind their labor pricing and would be worth it….


This sentence right here shows a multitude of things... you're not a contractor, you have a very limited perspective of business, you are confusing retail versus trade industry, and have no idea how costs and companies are structured...

The whole equation is FAR from just materials and labor... anyone who is in business knows this in detail and we could explain it in more detail to you, but then we'd have to kill (ban) you to keep the secret all to ourselves... 

OK, humor aside, let's indulge you a little and dig a little deeper and then if you still are confused, the mods can do what they will with you...

You see, Materials and Labor are only PART of the equation... there's no pretending involved, just lack of information on your part... you then have to add Overhead and (OH KNOW HERE COMES THE EVIL WORD!) Profit to the equation... While Materials can be similar in cost and scope (depending on when and where bought and level of quality) from company to company, Labor, Overhead and Profit can be vastly different from company to company EVEN if they are a one man show... As just ONE example of this... If one guy needs to make $75-$100K/year and another is happy making $50K year because they are new in business and it's more than they made as an employee, that one metric ALONE is going to be a difference... BTW, is that "gouging" in your mind?

Now imagine the difference, EVEN IF A ONE MAN SHOW, in Overhead costs... If you don't understand what goes into Overhead, look it up online and you'll see a HUGE amount of line items that go into this category, but again, is vastly difference from company to company... if one guy has a professional truck, proper equipment, all the insurances, etc. and the other is an illegal with none of those associated costs, then again, there's yet another difference... but my guess is you won't be asking or care if the guy you are hiring is operating legally or not...

And then there's Profit... yes, companies are actually in business to make a PROFIT... that goes to things like Capital Reserves, Emergency Fund, Equipment Fund, business growth, hiring employees, etc... you see, whether or not a contractors schedule is busy or a customer pays, the operations of that business and the companies involved STILL EXPECT TO BE PAID... and yet again, is going to be different from company to company, no matter the size... believe it or not, some contractors and most customers actually think what the contractor makes after everyone else (subs, vendors, taxes, permits, etc,) is paid is "profit"... it is NOT... Profit is what you pay the company for things like the aftermentioned items... their pay goes under Overhead or Labor...

And here is the kicker... if a contractor actually were "transparent" (in your eyes) and took the time and broke down ALL THOSE COSTS for you line by line into each category, not only would you likely just skim to the end to see the number it will actually cost you for the product/service you are looking for, but you wouldn't understand half of what you are reading and how it applies... now imagine a customer having 2-3 of those breakdowns (which are going to be different company to company in it's presentation) to have to understand and digest from different companies... your average person is simply not going to do that, nor should they... people buy things based on Company, Product, Service and Price, usually in that order... so your 99% not getting the business (your Post #130) for not being "transparent" has no basis in reality because that would mean those who aren't being "transparent" in your thinking wouldn't be in business because NO-ONE can survive on 1% close ratio...

So yeah, your version of "transparency is a waste of time for everyone involved when what the most relevant information a customer is looking for is the final cost they're going to pay for the products/service/quality/experience level/materials quality level they want or can afford...

Believe me when I tell you this is only a Cribs note version of what's involved in being in business today... takes into account NONE of the plethora of other factors that go into pricing... regulations, permitting, design services, licensing, service calls, dead beats, customer acquisition, material delays, extreme material price fluctuations, scheduling issues, unforeseen circumstances, the list goes on...

It is BOTH in the customers and the businesses interests to know what the final cost is to get from point A to point Z on any project not the minutiae that's in between... takes a LOT of time to get the minutiae of that breakdown together for you... did you also not expect to pay for that time to provide that service for you?


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## hdavis

Forget about breakdowns. Most people would choke knowing you have to have 15-20% profit to fund expansion in good times and weather downturns, or go out of business in the long term.

May as well give a customer Feynman's crib notes on quantum electrodynamics, they'll just be in over their heads either way.


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## Ed Corrigan

Damm, KAP! You should write a book. "Hiring a contractor for Dummies". You got all the obvious (to us) details covered succinctly and plainly. Imagine if you expounded on those little gems of wisdom...


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## reggi

How much is the book?


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## 480sparky

reggi said:


> How much is the book?


I want a break-down of the price.


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## Ed Corrigan

reggi said:


> How much is the book?


If you gotta ask, ya can't afford it, lol.

What, ya need some work done around the shack?


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## Ed Corrigan

I think it'll be available online, by the chapter. Chapter prices may vary.


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