# i dont know how you guys get the prices you do.



## river rat (Aug 29, 2006)

ive been reading pages and pages of posts on here for the last 2 weeks, and ive asked questions.
well i came to the conclusion that , hell, if they can charge these crazy high prices so can i.
so last week i had 5 bids to see.
i bid them all at around $400 a day.
i lost every damn one of em.
ive NEVER had such bad luck losing bids.
i always get 90% of all my bids. now some may say that if im getting 90%, then i should raise my prices a bit then i wouldnt have to do so many jobs.
but after losing this many, screw that. im going back to charging $200 a day.
it seems that that is all my area will bear.
now im just waitng for the phone to ring, cause right now i aint got jack.
so anyone that reads that someone is charging $500 a day - beware. maybe they are, maybe they are just blowing smoke or maybe they live in a magical land on gumdrop lane where people toss gobs of money at them just for swinging a paintbrush. but thats not where i live.


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## ProWallGuy (Oct 17, 2003)

OR maybe they have learned how to SELL a job.


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## ApgarNJ (Apr 16, 2006)

big difference between 400 a day and 200 a day, why not go somewhere in the middle, if you don't think you can get bids at 400 a day, i hope that's just for you, and not for a helper also. 
what area of the country are you in?

my painter is 560 a day, for two guys 8 hrs. both painters, not one helper and one painter. that averages out to 35 an hour. rates are different all around the country, you can't say that someone in the midwest is going to get the same rate as someone in the northeast in a high income area.


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## Vermy (Aug 28, 2005)

river rat said:


> ive been reading pages and pages of posts on here for the last 2 weeks, and ive asked questions.
> well i came to the conclusion that , hell, if they can charge these crazy high prices so can i.
> so last week i had 5 bids to see.
> i bid them all at around $400 a day.
> ...



looks like you don't really have urself a business, just a job where ur responsible for everything and no ones there to catch you if u fall.


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## Murphy (Mar 28, 2006)

I don't see how you can stay in business at 200 a day.
Gas, insurance, taxes, tools, carrying costs. 25 an hour with probably 10 going to the govt. no way to make it work.
If you are only working 8 hours a day with your own company you may as well give up now. 
I figure I probably work 100 hours a week running down leads doing estimates and lets not forget I actually have to work to make some money. And I am not rolling in the dough charging 500 a day.
Either you are in competition with a lot of uninsured guys who will work for nothing. Or you need to sell your expertise to a higher end customer.
Just my opinion Murph


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## maj (Mar 13, 2006)

There you guys go again, jeez  
I know exactly what river rat is talking about. His market WILL NOT support the higher rates that other places of the country does. 

THERE IS NOTHING WRONG WITH THAT!!!!

And I absolutely agree with his post. I feel the same way, that if I charged even half of what some of the pros on this site claim they make, I would be out of business immediatley.
I tried that a few years ago on a series of storage units to be built. Each unit was 40' x 240' and there were 3 scheduled to be built. All I needed to do was give an estimate of my labor to construct them, since the owner was a past satisfied customer. Well, I decided to make some easy money on this job and priced it 30% higher than what I started at. Customer thought it was pretty high, but trusted me at that time. I thought I had the job. He was convinced by someone to get another price. He did and I was laughed out of the job by another very reputable contractor. To this day, I have not done anymore work for that past customer, because I got a little greedy. So not only did I lose one job due to pricing beyond my market, but also lost all his continuing future jobs. 

In *MY* market, I MUST DEPEND ON WORD OF MOUTH. *MY* area will not support sneaky sales tactics & "better than though" attitudes. I *GUARANTEE* that you guys who preach the selling philosophy in order to able to charge more, would not last a month here. I say a month because after that there would be no one left to spread your bs too.


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## R&S Exteriors (Aug 4, 2006)

maj said:


> There you guys go again, jeez
> I know exactly what river rat is talking about. His market WILL NOT support the higher rates that other places of the country does.
> 
> THERE IS NOTHING WRONG WITH THAT!!!!
> ...


*POST OF MY DAY-- MAJ*






> Posted by Vermy
> looks like you don't really have urself a business, just a job where ur responsible for everything and no ones there to catch you if u fall.


How could you possibly know what his overhead is and even if he is just making a living at least he is doing it as his own boss and not working for someone making half that.





> Posted by ApgarNJ
> big difference between 400 a day and 200 a day, why not go somewhere in the middle, if you don't think you can get bids at 400 a day, i hope that's just for you, and not for a helper also.
> what area of the country are you in?


This is good advice river rat. I would not even go in between. If I were you I would SLOOOWLY increase my estimates over a long period of time. Try charging $210. If you still get results go a little higher. When you feel your getting too low of a closing rate then back off a little bit.

That way you still have work coming in and you don't have Home Owners traching your name around town.


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## Brian (Jun 9, 2004)

Everyday I bid against guys wanting $200 a day ($25 an hour). Everyday I get jobs against these guys at at twice that.

It isn't so much a matter of what people will pay as it is a matter of what you offer. Offer more value and people will pay more.

For example, offer: insurance, credit card payments, consumer education, prompt response, stability (time in business), professional memberships (BBB, NAPP, PDCA, etc.), time with your customer, etc.

If you look like your competitors, the customer has nothing but price to compare you. Look different than your competitors (offer more value) and many customers will pay your price.

I sell paint jobs for about 6 different contractors in my city. When they came to me they were selling for $25 an hour. I sell them at $40+ an hour. I get a higher price for them because I have helped them offer more value. They have done many of the things I mentioned above.

If everyone wanted the low price, everyone would be driving Yugos and eating at McDonalds. I'm unaware of anywhere in the country where that is the case. If you market to Yugo drivers, don't be surprised when they want to pay Yugo prices.

After 20 years in this business, I've learned that contractors worry more about price than customers. I know because I used to do it. When I quit worrying about price and focused on offering more value, I was able to increase my prices considerably.

I get tire kickers and price shoppers. But I also have plenty of leads. I close 40% of the jobs I look at-- this has held steady for the past 10 years. And I've doubled my prices during that time.

Generate enough leads, learn to sell, offer value, and price your jobs properly. If you do those things, the low ballers don't matter.

Brian Phillips


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## Guest (Sep 3, 2006)

Brian said:


> Everyday I bid against guys wanting $200 a day ($25 an hour). Everyday I get jobs against these guys at at twice that.
> 
> It isn't so much a matter of what people will pay as it is a matter of what you offer. Offer more value and people will pay more.
> 
> ...


Are you brian with thenapp? sorry for bad ebglish.

Say I, GREAT POST!

jose


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## R&S Exteriors (Aug 4, 2006)

Brian said:


> Everyday I bid against guys wanting $200 a day ($25 an hour). Everyday I get jobs against these guys at at twice that.
> 
> It isn't so much a matter of what people will pay as it is a matter of what you offer. Offer more value and people will pay more.
> 
> ...


I'm glad your doing well :thumbsup: 

Is that "value" your selling or something else. How do you know what "value" a so called "low baller" has. Many probably do as good of quality, or better, than the guy charging twice as much.

What do you mean "*Price your jobs properly*"

I'm a contractor not a *used car salesman*. I estimate my jobs at what I feel is a fair price and what the market in my area will allow without having to spend an astronomical amount of money on marketing, advertising and salesmen so that I can bring in enough leads so that a few of them are willing to hire me at twice the going rate. 

I do not have to pay a fat commission to a saleman and I keep my overhead low. Let the other guys pay for a fleet of brand new trucks at $650 a month. I'll keep buying my 3-4 year old truck and pay cash.


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## Guest (Sep 3, 2006)

R&S Exteriors said:


> I'm glad your doing well :thumbsup:
> 
> Is that "value" your selling or something else. How do you know what "value" a so called "low baller" has. Many probably do as good of quality, or better, than the guy charging twice as much.
> 
> ...



Fidel think same you as.

jose


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## mdshunk (Mar 13, 2005)

x
x
xx
x


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## Joasis (Mar 28, 2006)

Here we go again....market area will dictate price...I think it is wonderful if some of you guys can hit a $400 day...those kind of prices here *in my area* is what directly allowed me to get my business of the ground. *In my area*, we charge $55 an hour for a crew residential, (2 guys and tools) and $60 an hour commercial. I just landed a pretty nice contract and will have one crew on one site for the next 4 months. Now for some of you, this may seam ridiculously low, but this is my market, and I make out great. And to further that thought, I generally bid the whole job, which is what GC's typically do, and we make better numbers. 

Now back to a painter making $25 and a painter making $50....if we are talking comparable quality and time, who isn't going for the low bid? I haven't seen a $400 dollar a day painter here yet.


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## R&S Exteriors (Aug 4, 2006)

mdshunk said:


> Jose (or should I more properly say Paul?)
> 
> What's up with this response? An explanation is in order.


:clap: :clap: :clap: :clap: 

Same thought I had from his first post. I think there he may be a few other users as well


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## maj (Mar 13, 2006)

Brian said:


> Everyday I bid against guys wanting $200 a day ($25 an hour). Everyday I get jobs against these guys at at twice that.
> 
> It isn't so much a matter of what people will pay as it is a matter of what you offer. Offer more value and people will pay more.
> 
> ...



Brian, I invite you to my area and prove to me how you are going to out price all the rest of us who have been here our whole lives. :no: Hell, I won't even challenge you to double our prices, maybe just 25% (1/4 of what you claim). You will be laughed all the way out of town within a week, 'cause ain't nobody around here going to fall for some overpriced salesman offering up phoney promises of being twice the value because you pay your yearly membership fees to some organization that nobody gives a sh*t about. 


> I GUARANTEE that you guys who preach the selling philosophy in order to able to charge more, would not last a month here. I say a month because after that there would be no one left to spread your bs too.


I


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## Patty (Jan 21, 2006)

Maj?

Is this about GREED or PROFITABILITY? 

There is a BIG difference.

And, I think there are TWO conflicting thoughts and opinions brought forth, here, in this thread, that should not be confused.


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## lxdollarsxl (Apr 13, 2006)

Brian said:


> Everyday I bid against guys wanting $200 a day ($25 an hour). Everyday I get jobs against these guys at at twice that.
> 
> It isn't so much a matter of what people will pay as it is a matter of what you offer. Offer more value and people will pay more.
> 
> ...


I disagree, and river rat is correct, not being in an area that has the big spenders, price does mean a lot to them, and having contractors within their budget counts a lot. Here in Ky ( the part im in) to get $250 a day and your doing well. You can offer all the bells and whistles you want but unless they have it within their price range your not going to get it.

In fact i would challenge you to get the bigger bucks here, yes there is the occasional job that money isnt a problem but they are few and far between.

Like River Rat i tried to increase my rates but not by as much and the market wont take a rate of $300 per day, there are so many who are willing to take $150 a day, no matter how good your reputation is its tough to compete, as im sure it is in many places. Im not moaning about the rates here, mainly because my cost of living is much lower than in a big city, but just pointing out what good for your area may not be the norm elsewhere.:no:

Dang maj beat me to the challenge - i must type quicker


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## R&S Exteriors (Aug 4, 2006)

Patty said:


> Maj?
> 
> Is this about GREED or PROFITABILITY?
> 
> ...


I think what Maj is saying is that different areas have different cost of living and will support different amounts.

Profitability does not strictly depend on how much you get per hour on a job.

Profit is how much is left after all the bills are paid. If your in a lower cost of living area, like us, and you keep your overhead low and don’t go deep in debt then you may actually make more profit at $200 then someone somewhere else charging $500 per hour. *In that case who really is the "low baller".*

You can rent a nice house, in my area, for $600 - $800 a month. My sister lived near Boston a few years back and she paid over $1500 a month for a two room studio apartment. So yes to live in that area you the people make more per hour and the Contractors can charge more per hour, BUT are they really more profitable?

I’ve seen some "big" guys, even in my area,( who bragged about how much they charged per hour) file for Bankruptcy and go belly up. Must not have been too profitable. Probably the fleet of new trucks and machinery and the salesmen and the marketing and advertising budget, etc


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## donb1959 (Dec 9, 2004)

My overhead dictates that I make $500.00 per day, plus my matierial markup in order to make a profit. It really doesn't matter what the market will bear I have to make that amount. Believe me I don't land all the jobs I bid...not even close. And I know if I were to drop my prices I could land many more. I also know that I can sit on the couch and not make money instead of bustin my humps on a job I know that I'm gonna lose money on.

If you know your overhead, and know you can turn a profit at $200.00 per day, then thats the rate you charge. However is you don't know your overhead and are losing money, then what's the point.


> In MY market, I MUST DEPEND ON WORD OF MOUTH. MY area will not support sneaky sales tactics & "better than though" attitudes. I GUARANTEE that you guys who preach the selling philosophy in order to able to charge more, would not last a month here. I say a month because after that there would be no one left to spread your bs too.


You must live in an extremly small town, with no larger cities nearby if you don't advertise at all. Not sure about "sneaky sales tactics" I tell the customer exactly what I will do at exactly what price, and everything is outlined in my contract. "Better than thou" I am head and shoulders above what most contractors in this area are.



> i always get 90% of all my bids. now some may say that if im getting 90%, then i should raise my prices a bit then i wouldnt have to do so many jobs.


If you are closing 90% of your jobs at $200.00 per day and making money money that excellant, but if your'e not making money, then you will not be in business at this time next year. If I were to start closing 90% of my bids there's no doubt I would increase my day rate by at least 25%


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## realpurty2 (Aug 18, 2005)

maj said:


> Brian, I invite you to my area and prove to me how you are going to out price all the rest of us who have been here our whole lives. :no: Hell, I won't even challenge you to double our prices, maybe just 25% (1/4 of what you claim). You will be laughed all the way out of town within a week, 'cause ain't nobody around here going to fall for some overpriced salesman offering up phoney promises of being twice the value because you pay your yearly membership fees to some organization that nobody gives a sh*t about.


Oh how I wish I could step into that challenge. :laughing: Nothing personal Maj, nothing at all, but that's one I would enjoy standing toe to toe and proving you wrong. Now hear me out.. I'm not saying that your methods are wrong, or that you are wrong but rather that I could prove to you within a month's time that it could be done. Since I can't up and move, start a business in your area, and formally back up my opinion, I'll just have to tell you here why it could be done. 

How could I win such a challenge on your home turf, with your friends and clients, your exact market conditions as my obstacle? By finding as much about you as I can find, what you do, what's included in your price, your good points and your bad... then offer more than you do. This is in the painting thread so to keep Grumpy content and not be like Paul, let's use painting as an example. The $200 a day guy may have low overhead and live in a lesser market area, but a $400 a day guy could still take away some if not eventually all of the lower guy's business by offering more. 

We've all talked about quality and value, but just how far do you take it in your bids? Sure it cost more time and materials both for a painter to tape off every detail before painting, and some are good enough that they can skip that step and be fine. Some will track right in on the carpet with boots on to keep their overhead lower by not worrying about floor protection except in the area where they are painting, some cover their feet with booties or paper the entire pathway they will be traveling while on the site. But to a homeowner, when it's presented that your company doesn't skip those small steps just to offer added protection to their home and not take chances with their investment, most HO's will sign with the guy who covers those bases, even if it cost more. It's not "phoney promises" when you really do give the client all the extras that justify you charging more than the guy who doesn't. 
The association memberships don't offer anything of value to the customer that they can see on the walls, but often, they associate trade organizations with education and honors, thus, having them is not always a waste and something no one gives a **** about as you say. It's just another way of promoting confidence. Trust in the contractor has a huge berring on signing a job, so the more you can do and show to earn their trust, the more they want you to do the job. The more they want you, the more they are willing to pay. I'd be willing to bet that you've increased your prices since you first started because now your in demand. You got yourself to a position of demand going a different road (using previous jobs and word of mouth to build your reputation) but it is no more correct or wrong than the contractor's who build their reputation in other ways. 

We live in a market much like you mentioned being in, slow pace, hometown farm country where your name means everything. Our rates are not what they would be if we lived in California, but for our area, we are one of the higher priced contractors. We are booked with signed contracts through Febuary if not March and more calls coming in every day. We have one work truck and one van, both older and in need of a good paint job, we don't work out of a fancy showroom and the only trade association we belong to is NAHB because it's the only one with a local meeting. Why are we able to charge more than our competitor's who have 3 story offices, new fleets of vehicles and 100+ employees? Because we give the clients more services for their money. The thing too many of us miss is in order to provide a service to the HO, we have to think like a HO sometimes. We've all bought a service before, and if we were honest, we'd all have to admit that we didn't always buy from the low bidder. We made our choices based on who offered what we were looking for and gave us the most for our dollar.
Shew that was long... sorry guys, Maj got me started. lol It's all his fault. Never issue a challenge.. I don't back down.

Many times on this forum we all have argued our opinion on quality, value, low-ball bids, contractor's skills, this and that and how it relates to pricing. We've stood our ground on whether the market dictates the price or if the price dictates the market. The debate will never end. 

Lastly... if you want your opinions respected and your way of doing things to be acknowledged as a possible option, then give those of us who do things differently the same respect. You can't get on here and ***** because someone does something different and expect not to get bitched back at when you insist our way is BS just because it's different than yours. (No maj, that wasn't directed at you, it's at all of us because everyone here has done it sometime or another)


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## Brushslingers (Jul 28, 2006)

Good post Purty, I almost have nothing to say after that.  I will add though, I don't price jobs per day, or per hour... I price jobs per job. Normally I close about 80% and it works out to about 60 per hour, the guy down the street finds it hard to get jobs at 28 an hour. Go figure.


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## maj (Mar 13, 2006)

Robin, I couldn't agree with what you said anymore. :thumbup: I thought it sounded as if you were debating my post, but turns out you said exactly what I have been saying all along........... You just didn't realize it! :laughing: 

I will take issue with you about you accepting my hypothetical challenge however. If I were in the painting trades, I would do exactly what you said and be one of the top painters in my area. In my business (residential new construction) I will say (without trying to brag) that I am at the top, along with many other reputable contractors. You see, around here the contractors do not belittle other contractors. We have a mutual respect for one another. That, IMO, has lead to the fact that we don't compete for work. We are able to set our own prices(within reason) without fear of losing our customers to lowballers. We just don't do that........ it is unethical (in our area). So would you really come in and try to charge double what our market will bear, and expect to make a living? Nope, sorry, but it ain't gonna happen.

I think I have stated many, many times that I am not against the selling approach in some areas & trades, I am sure it works there. My point is to the people that seem to think everyone must do things their way. It doesn't work their way here. It works my way here. I enjoy all the posts from people around the country here and the different ways of doing things. The only time I will take issue with something said is when they try to cram it down our throats that someone NEEDS to do it their way. 



> Trust in the contractor has a huge berring on signing a job, so the more you can do and show to earn their trust, the more they want you to do the job. The more they want you, the more they are willing to pay.


Yep..... You just proved my point right there! :thumbup: Thank You


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## maj (Mar 13, 2006)

donb1959 said:


> You must live in an extremly small town, with no larger cities nearby if you don't advertise at all.



YES, FINALLY somebody gets it.


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## Jon F (Jul 15, 2006)

If what you say is true MAJ, the only way you'd increase your bottom line is through increase volume through growth or acquisition. Not sure if that is your desire or not. I'm in a trade similar enough to painting that we have to compete against painters occasionally----i wish you guys could just convince some painters that they are worth $25 an hour. Most i see are closer to $10-15, much less $45. Makes me want to scream.


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## R&S Exteriors (Aug 4, 2006)

realpurty2 said:


> Lastly... if you want your opinions respected and your way of doing things to be acknowledged as a possible option, then give those of us who do things differently the same respect. You can't get on here and ***** because someone does something different and expect not to get bitched back at when you insist our way is BS just because it's different than yours. (No maj, that wasn't directed at you, it's at all of us because everyone here has done it sometime or another)


Couldn't agree more.

Thats why some spoke up when River Rat merely stated that his area could not support much more than $200 a day and he was immediately told:

(1) Your not running a business
(2) You probably didn't know how to "sell" a job
(3) You Don't know how to properly price a job

Could it be that maybe his area just won't support anything higher than that.

Also I think there is some confusion. Some of the "big" guys are posting that they get $500 per person a day and other are saying they must make $500 a day for their overhead. Now if that overhead includes employee's and you need $500 a day then we are basically talking close to the same thing.

I don't price per hour or per day. I price per job. I have no employee's so I have less overhead, but I usually end up making $200 - $250 per day. So if your charging $500 for two people it would be about the same thing. Actually I would be making more because I have no W/C or other employee related overhead.


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## Blaster (Jul 11, 2006)

maj said:


> Brian, I invite you to my area and prove to me how you are going to out price all the rest of us who have been here our whole lives. :no: Hell, I won't even challenge you to double our prices, maybe just 25% (1/4 of what you claim). You will be laughed all the way out of town within a week, 'cause ain't nobody around here going to fall for some overpriced salesman offering up phoney promises of being twice the value because you pay your yearly membership fees to some organization that nobody gives a sh*t about.
> 
> 
> I


 Where are you at in Iowa anywhere near Waterloo?? I got a buddy doing this sort of work there, and I used to live there. I will be done working here around the end of Oct. unless I book some inside jobs. Maybe I will take you up on your challange if waterloo/cedarfalls is close enough for to your area. Give me an Idea of how many jobs I would need to sell. I don't want to book XXX amount of jobs and then have someone say it was only luck. Give me an Idea of exactly I have to do to win this challange. Then I will talk to the wife and see what she think about visiting Iowa in the winter LOL.

I am serious about this.

Blaster


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## Blaster (Jul 11, 2006)

I should also say I have no problem at all what you want to work for. That is your business. But I think I can make what I am now anywhere in the USA. I am in Montana for gosh sakes look at the stats for montana. We have less than 1 million people and the average wage is like $7.00 an hour. I need a challange and think it would be fun. Maybe I could write a book about it and make BIG $$$ LOL

Blaster


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## ApgarNJ (Apr 16, 2006)

good thread, i like to see the responses from around the country.
I know that most guys around my area, that are good quality contractors are charging rougly what I am, some more, some less. but i'm sure that's everywhere. i know i don't price per sq ft. I just charge what the job is going to take to finish with labor, subs and material. and add my profit. 
I know for me and one other guy, i end up charging roughly 800 a day.
that doesn't include my profit, that's added on to the overall cost of the job. I don't consider myself a bigshot, or someone that overcharges. I know that my area can support these figures. people are paying between $175-400 a sq ft around here, to have custom additions put on their houses. If i were to charge any less, I couldn't afford to even live in this area. I've never had to advertise one bit, and all my past customers refer me to new ones because they like the work I do, and never haggle me about prices. once and a while someone will say I'm a little high, but you get that anywhere.
I don't land all my jobs but I do get probably 80% of them, and they are mostly because the customers know that I'm going to do a good job, that i show up when I say i'm going to be there, and I am completely honest with them about everything on the job. 
everyone just has to price what they think they can get from their market and hope they can live off that number.


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## Jon F (Jul 15, 2006)

R&S Exteriors said:


> Couldn't agree more.
> 
> Thats why some spoke up when River Rat merely stated that his area could not support much more than $200 a day and he was immediately told:
> 
> ...


The "dollars" talk is tiring. Nobody knows what anyone else is talking about. $500 a day per owner, or employee, or what??? $200 before expenses, after expenses, net, after taxes, or what?? Does anyone have a clue what anyone else even means???? I mean, who charges an hourly rate for multiple people?? "Two of us for $45, but while he goes to lunch, it is only $25, and then back up to $45. Now if Bubba comes, it goes up to $60. Now, the days Billybob is here, it'll be $85, 'cause Billybob is really good. And if it is only Billybob and Jose, it'll be $40 an hour." 

To me, the question seems too flawed for an answer.


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## Blaster (Jul 11, 2006)

Jon Fife said:


> The "dollars" talk is tiring. Nobody knows what anyone else is talking about. $500 a day per owner, or employee, or what??? $200 before expenses, after expenses, net, after taxes, or what?? Does anyone have a clue what anyone else even means???? I mean, who charges an hourly rate for multiple people?? "Two of us for $45, but while he goes to lunch, it is only $25, and then back up to $45. Now if Bubba comes, it goes up to $60. Now, the days Billybob is here, it'll be $85, 'cause Billybob is really good. And if it is only Billybob and Jose, it'll be $40 an hour."
> 
> To me, the question seems too flawed for an answer.


I am assuming $200.00 (25.00 hour) A day is just the payroll for one guy That $200 is the work comp. social security etc. It would not include overhead. But that's just my take. If that $200 is more than just labor burden I will be really shocked. I bid most my jobs but also do Time and material. As for how you charge that is simple for me. At the end of the job the home owner gets a copy of the total hours and where they were spent. Maybe Monday It's 16 hours because Billybob and me were both there all day. But tuesday billybob took off 4 hours of for lunch(instead of the one alotted). Well tuesdays hours are going to be 13 hours and billybob is going to be short 3 hours on his pay check come friday. If we only work that job Monday & Tuesday then the labor billed is 16+13=29hours X $25.00 = $725 
Does that make sense? 

I hate the hourly it is much harder to make any money at. I feel like I just own a job, not a business when doing it by the hour. I also understand that is how many like to do it and that's fine. 

Blaster


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## Teetorbilt (Feb 12, 2004)

It may be that rural IA won't accept rates charged elsewhere. From what I have read here, there are places that don't require licenses or ins. It could be that someone lives in an old family homestead that they never had to pay for and maybe don't even upkeep. That person could get away with charging very little. The area pricing would also reflect that.


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## bmartin (Dec 30, 2005)

Painter A charges $200/day and takes 2 days to finish.

Painter B charges $400/day and takes one day to finish.

Both charge the same for the job. 


How can you compare anything unless it's a total price for the same job?


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## Jon F (Jul 15, 2006)

bmartin said:


> Painter A charges $200/day and takes 2 days to finish.
> 
> Painter B charges $400/day and takes one day to finish.
> 
> ...


BINGO!!!


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## Jon F (Jul 15, 2006)

Blaster said:


> I am assuming $200.00 (25.00 hour) A day is just the payroll for one guy That $200 is the work comp. social security etc. It would not include overhead. But that's just my take. If that $200 is more than just labor burden I will be really shocked. I bid most my jobs but also do Time and material. As for how you charge that is simple for me. At the end of the job the home owner gets a copy of the total hours and where they were spent. Maybe Monday It's 16 hours because Billybob and me were both there all day. But tuesday billybob took off 4 hours of for lunch(instead of the one alotted). Well tuesdays hours are going to be 13 hours and billybob is going to be short 3 hours on his pay check come friday. If we only work that job Monday & Tuesday then the labor billed is 16+13=29hours X $25.00 = $725
> Does that make sense?
> 
> I hate the hourly it is much harder to make any money at. I feel like I just own a job, not a business when doing it by the hour. I also understand that is how many like to do it and that's fine.
> ...



Blaster, I'm sorry to say, but I think you are wrong. When you hear "$200" I think it is what owners are pulling at the end of the day, not what they are billing per man hour. Maybe I'm wrong. All the more reason to bid.


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## Brushslingers (Jul 28, 2006)

bmartin said:


> Painter A charges $200/day and takes 2 days to finish.
> 
> Painter B charges $400/day and takes one day to finish.
> 
> ...


Bingo. If you asked a direct question I would bet that most people here are averaging between 25 and 38 per hour, per man, including overhead.


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## slickshift (Jun 14, 2005)

river rat said:


> ....last week i had 5 bids to see.
> i bid them all at around $400 a day.
> i lost every damn one of em.
> 
> ...


First off, I'm assuming you are using those figures (200/400) to bid the total price, and not telling the customer "I'll paint your house, it'll be $400 a day"
Sorry if that sounds dumb, but I'm just checking

I don't know what the avg. wage/overhead costs are in your area, but:

I'm assuming if you are closing 90%, then you are mostly referals (word of mouth) and/or the price is the major closing tool
If the word of mouth is out you are cheap (which @ 200 a day I'm assuming it would be), and the next 5 bids you double your price ($400), of course you will lose them
These people have been telling there friends and neighbors that River Rat painting is cheap and now This RR bid looks like the others...or maybe more

Keep in mind that a closing rate of 30% is GREAT in our business

Also, there are many other things that go along with the price increase, and I really can't comment because I don't know if you are doing them already




river rat said:


> ... maybe they live in a magical land on gumdrop lane where people toss gobs of money at them just for swinging a paintbrush. but thats not where i live.


Lol...but really if the only service you are providing is "swinging a paintbrush" you'll need to bump it up a little for a price increase
It may sound dumb, but a Quality Redecorating Experience can command a much higher price...even if all you are technically doing is "swinging a paintbrush"
The devil is in the details


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## Zip (Oct 20, 2005)

Variable #4. Don't you guys daily rate depend on type of tools also? My rates include tools, i.e.
Spray man with helper +/- painter
Supervising painter
Painter
Laborer


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## bergenbldr (Apr 23, 2005)

Its been my perception that every area of the country has a lowerend,midend,and a highend market.Its just a matter of finding and targeting that market.Also while at the mid/lower end of the spectrum rates may vary greatly from one area to another at the highend rates tend to be much closer together.Part of this may be the fact that contractors that work this market tend to cover a wider area.I myself cover the entire state of nj,and charge the same rates regardless of what the local market may be.


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## Brian (Jun 9, 2004)

If I heard of a contractor getting $100 an hour, I would want to know what he's doing differently from me. I'd want to know what I can add, change, etc. to get that kind of rate.

I would not assume he is lying, smoking dope, or has customers who just love to throw money at him. 

In other words, I would take responsibility and learn how to improve my business rather than shooting down the guy who is doing better.

For what it's worth, I used to think nobody would pay more than $25 an hour. Then I started offering more to my customers-- credit cards, BBB, insurance, etc.-- and they started paying more. The more I've offer, the more they pay.

Brian Phillips


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## Mike Finley (Apr 28, 2004)

I'm just curious since it is a given that in Maj world you would be out of business if you tried to charge more and spread salesman BS. 

Is it also true then if you came in and charged less then the locals would you drive all the locals out of business? Before you get stuck on the answer of it can't happen, instead addressing the real issues it brings to light, just consider - isn't that the exact same thing the downtown shop owners all thought just before Walmart showed up?


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## Double-A (Jul 3, 2006)

river rat said:


> ive been reading pages and pages of posts on here for the last 2 weeks, and ive asked questions.
> well i came to the conclusion that , hell, if they can charge these crazy high prices so can i.
> so last week i had 5 bids to see.
> i bid them all at around $400 a day.
> ...


I'm not sure who said you should immediately double your prices, but, that may have been the reason you had some trouble. 

The other part of this is, what more did you offer for $400.00 and how comfortable did you feel asking for that money? People hire the contractor first, the company second and the job comes in somewhere about 6th. So, price for most is not the prime consideration. 

Only you can answer these questions, and you have to honest with yourself about how you did. I can say this... if you're getting 90% of the bids you made at $200.00 per day, it is most definitely time to raise your prices, but this time... try sneaking up on it.


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## Eric S (Feb 12, 2006)

I've never been sure about how much I can charge and still get jobs. I started at 8hr for lawn work, went to 10 for basic or easy Handyman work. Recently I've gone from 12.50 to 15.00 for all of the work that I do.

I profit from paint jobs if I have no overhead but, when I need to buy anything I start to understand the absolute need to charge a minimum of 25.00hr for my paint jobs.

One must charge enough to realize the profit they EXPECT out of each project. People must also be able to do the quality of work that is worth the charge and have the market that will accept the charge. If those parameters are not in place then I believe that you will have to get them into place or at least be happy about being your own boss.

"Some people will not pay anyone." Case in point:
I just did a negative profit job. I origionally wanted it at a rate of 18.00hr for all work. This included installing a bed canopy, hanging a pot/pan rack, painting of master bedroom, and a powder room. This lady wanted me to come down to 15.hr stating that if I did she would refer me to all of her friends. I caved in. Nothing to do that day and the promise of more work...why not?

After I bought tools needed to do work and added up ALL time spent dealing with job, gas/wear tear on car etc...I'm sure that I did that job for free or even took 50.-100. negative profit. I did not get the master bedroom to paint-they decided to put that off. I was there for 10 hours and got 100.00. I had promised not to charge more than 30.00 for the powder room as I had believed that I could get it done in 2hrs. It took 1hr to cover floor, light, and take hardware off the walls. Then it took me 3 hours to paint. They threw in a twist-some sand textured paint that I have no previous experience with. With 7.5 - 8.5hrs in they asked me if I could stay a little longer to hang two mirrors.

All told: This is my own foolish profit gain benchmark and it will incourage me to re-configure the way I charge people.

If people do not want to pay...let them not pay someone else. It's not worth the effort.


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## Mike Finley (Apr 28, 2004)

Eric S said:


> I've never been sure about how much I can charge and still get jobs. I started at 8hr for lawn work, went to 10 for basic or easy Handyman work. Recently I've gone from 12.50 to 15.00 for all of the work that I do.
> 
> I profit from paint jobs if I have no overhead but, when I need to buy anything I start to understand the absolute need to charge a minimum of 25.00hr for my paint jobs.
> 
> ...


This entire post made my stomach turn. Eric... wow!


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## river rat (Aug 29, 2006)

i appreciate all your responses guys.
i was more than a little pissed off when i wrote it. but im over it now. gotta move on.
i dont use any fancy software programs to determine the cost of a job.
ive always used my good judgment from 15 yrs of exp.and intuition. and yes, sometimes im off, but not too far off to cause me to change tactics.
i tried to increase my rates, but the experiment failed. at least now i know i was being greedy.
i have no overhead- no employees no truck payment, so its all pretty much profit.
most of my money goes to walmart. heh heh.
i just started advertising in a major newspaper two weeks ago and ive only landed 1 job so far.
i have no net to catch me- no credit, no savings,no health ins. yep it gets scary, especially when rent is due in a few days. and the phone isint ringing.
but its better than working for someone else.


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## George Z (Dec 23, 2004)

There is only one right price for your company.
"What your market will support" means nothing more than
you are going after the wrong market.

If you know what the numbers are to survive and hopefully thrive,
not charging these numbers means you don't want to survive or thrive?

After what Realpurty and Brian's posts, what else is there to say?


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## maj (Mar 13, 2006)

Mike Finley said:


> I'm just curious since it is a given that in Maj world you would be out of business if you tried to charge more and spread salesman BS.
> 
> Is it also true then if you came in and charged less then the locals would you drive all the locals out of business? Before you get stuck on the answer of it can't happen, instead addressing the real issues it brings to light, just consider - isn't that the exact same thing the downtown shop owners all thought just before Walmart showed up?


That's a very good point Mike... 
Again, everyone must remember,(thank you for remembering Mike :thumbsup: ) that I live in a county of only 11,000 people (the whole county). No we are not some hick area with no electricity, :laughing: , but it is rather conservative living here. People tend to know what they should be paying for goods & services. If they feel like they are not getting what they paid for, the word gets out, and FAST!!!!! 

Mike, to answer your question......
First of all, there are no Walmarts, big box homecenters, or other national chain stores in my targeted market area. Yes, we have them , but not in my area. All local stores are still locally owned, as well as all the other service oriented businesses. With that said, the fella that comes to town to lowball the rest of us contractors, would probably stay pretty busy. There are alot of people here that will shop low prices, most of them could care less if you belonged the BBB,NAHB,etc., and will pay cash before using a CC, and if you drive a new fancy truck all the time, then you are making way to much money. People here like to see the men & their equipment working, not showing off! The established,reputable contractors would not suffer alot from the lowballer coming in because we still have the name recognition and reputation of being fair & honest. And, at the moment at least, there is plenty of work to support us all. I am at the point where I can turn down the jobs I don't want, and the jobs I do want will have to wait many months before I even start the material list. 

I honestly believe that I am near the top of the list for contractors and also at the top of the list for pricing. What bugs me is when someone tells me to raise my prices and grow my business so I can get the better clientele. How would Joe Shmoe in Metropolisville know anything about my business and where I stand.


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## Mike Finley (Apr 28, 2004)

Maj - only, let's reconsider the term you are using - lowballing you. Charging less isn't lowballing if it is the nomal rates you charge and you are doing work according to code, standard practices, local practices.. etc...

Now here is where the worm turns, at least as I see it...



> The established,reputable contractors would not suffer alot from the lowballer coming in because we still have the name recognition and reputation of being fair & honest. And, at the moment at least, there is plenty of work to support us all


Consider what happens after 1 year, maybe 2 years of 5 years...

Now really think about that, because now the tables are turned. You and the established, reputable contractors are now the guys on this board who preach higher prices.:blink: The 'lowballer or lowballers' have now reset the bar for all of you! 

The lowballers are now you guys as you are now and you and the established guys have become the guys on here. As time passes and the 'lowballers' keep doing what they do which is perform the same work you guys always did, but now they have lowered the price structure in town and now you guys are seen as selling at too high a price.

Without arguing about any technicalities of this hypothetical situation - _now what would you all be forced to do to sell your services if you wanted to keep the same level of prices you are used to now?_

You see, I think that is the 64 million dollar question in the situation, because I suspect you would have to try to differentiate yourselves from the lower priced contractors, and in doing so,,, now hold on to your hat... you would actually be *selling* yourselves.

I know the small town market and what people in a big market don't understand is how strong price is in selling services. If somebody lowers the bar, the customers flock to the lower price, there is some loyalty issues that will last for a few years, but as time goes by those loyalties go out the window.

What most in big markets don't understand is that in a small market customers aren't making a choice between should we spend 20% extra for a really good contractor and we just won't be able to do 2 ski vacations this year, we will only be able to do 1 this year. In a small town it is more like, let's spend 20% less by using the adequate contractor and we might have the money to replace the a/c unit that has been going on the fritz for the last 4 years and the kids won't have to sleep in the root cellar during the hot summer months, or we can afford to get a new set of tires on the car...


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## maj (Mar 13, 2006)

I understand Mike, and agree with most of what you and most the others have been saying. And I respect the fact that you understand the different types of markets out there. Where my gripe lies is with the ones who just assume that the rest of the country should be able to support the business practices that their part of the country does.





> In a small town it is more like, let's spend 20% less by using the adequate contractor and we might have the money to replace the a/c unit that has been going on the fritz for the last 4 years and the kids won't have to sleep in the root cellar during the hot summer months, or we can afford to get a new set of tires on the car...


I'll support that statement. It is very truthful. However, There is a market for the ones who WILL spend the extra 20%, albeit very small, and I believe I have a certain % of that small market. I don't have all of the high end market in my area, but there are just as many great contractors here as there are not so great. The not so great contractors get the not so great work. The great contractors get the great work. I have had the good fortune of placing myself in the later category. 
So when someone posts about not being able to charge what others do here on this forum because their market will not support it, I will stand up and take issue when someone else posts back and makes false accusations to that poster. Accusing them of not being a professional business, or saying they need to raise their prices twice what the market will bear. To me, in my market, that is ridiculous and will only destroy a person.


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## Blaster (Jul 11, 2006)

maj said:


> So when someone posts about not being able to charge what others do here on this forum because their market will not support it, I will stand up and take issue when someone else posts back and makes false accusations to that poster. Accusing them of not being a professional business, or saying they need to raise their prices twice what the market will bear. To me, in my market, that is ridiculous and will only destroy a person.


I hope I have never given that impression to anyone. I have been in the same boat as many others, stuggling to get by and some people showed me how to make more money and it worked. I am just trying to share some of that and learn more. I believe I can do this anywhere in the USA. I even said I would take your challange and come to Iowa this winter. I am not putting you down, just trying to help. Maybe people like me need a code to put in our threads so you know not to come in and get worked up or offended by what we are saying. I mean no offence at all to anyone, but I have never ran into people that were so against people giving advice on how you MAY be able to make more money. Paul typed one little sentance about change orders. That one sentance will profit me a lot of money. I realized I give away a lot of free work on jobs. I could list at least 5 other things that have helped me from what people like paul and George and others have said just in the last two weeks. I like good discusion it makes me think. 

blaster


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## Joasis (Mar 28, 2006)

I'll chime in with another thought...lets take steel building erection. I am at the top rate, by comparing what low ballers are charging from their advertising. We have raised our rates 25% in the last year alone, due to fuel and wages....now if i were to go up any more, then the lowballers will have a better shot at getting customers I currently have, since quality means a lot, but price will dictate some, and perhaps most jobs when we are discussing $70,000 dollar buildings. I already hear a lot about XYZ metal buildings will come into town and put up a building for half of what I charge......


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## AAPaint (Apr 18, 2005)

Eric S said:


> I've never been sure about how much I can charge and still get jobs. I started at 8hr for lawn work, went to 10 for basic or easy Handyman work. Recently I've gone from 12.50 to 15.00 for all of the work that I do.
> 
> I profit from paint jobs if I have no overhead but, when I need to buy anything I start to understand the absolute need to charge a minimum of 25.00hr for my paint jobs.
> 
> ...


Some advice. Although I'm not one of the BIG businesses around here I know one thing that can help you substantially. Do NOT discuss hourly rates with the customer. Keep that to yourself. Figure up a total price and give them that, period. An experienced painter can make up to $15/hr working for someone else.


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## Joasis (Mar 28, 2006)

You know, I was thinking about this post a little while ago, and while there are fantastic ideas floated here about marketing, how to sell, etc, etc.....what finally dawned on my is not only do maj and I have different markets, but the very nature of our work does not fit the profiles or selling stratagies...maj builds homes primarily...and you will not roll into his market and start charging $125 a ft for a spec home...same for me...then it won't be a matter of selling the customer on all the extras you offer, but realism will set in and you won't be able to sell the job period. Compare the concept of how much to charge by the day.....if maj or I bid on a home (and our markets are nearly identical), we will go for a sq/ft price based on experience...lets say $30,000 to build a 1600 sq/ft home...now if you say that we can, with great marketing and sales skills, suddenly make $60,000 in labor and not loose the job to another builder...I am all ears. If this could actually be done, it would boost new home prices by an incredible leap...and surely all the other builders would follow along, rather thn let the customer get fair and actual value.


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## maj (Mar 13, 2006)

joasis said:


> You know, I was thinking about this post a little while ago, and while there are fantastic ideas floated here about marketing, how to sell, etc, etc.....what finally dawned on my is not only do maj and I have different markets, but the very nature of our work does not fit the profiles or selling stratagies...maj builds homes primarily...and you will not roll into his market and start charging $125 a ft for a spec home...same for me...then it won't be a matter of selling the customer on all the extras you offer, but realism will set in and you won't be able to sell the job period. Compare the concept of how much to charge by the day.....if maj or I bid on a home (and our markets are nearly identical), we will go for a sq/ft price based on experience...lets say $30,000 to build a 1600 sq/ft home...now if you say that we can, with great marketing and sales skills, suddenly make $60,000 in labor and not loose the job to another builder...I am all ears. *If this could actually be done, it would boost new home prices by an incredible leap...and surely all the other builders would follow along*, rather thn let the customer get fair and actual value.


Not only that but, nobody would be building houses, and we wouldn't have to worry about what to charge. We'd all be out of work, even the painters who would normally come in to paint them. 

No economy = No work.


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## maj (Mar 13, 2006)

Murphy said:


> *I don't see how you can stay in business at 200 a day.*Gas, insurance, taxes, tools, carrying costs. 25 an hour with probably 10 going to the govt. *no way to make it work.**If you are only working 8 hours a day with your own company you may as well give up now. *I figure I probably work 100 hours a week running down leads doing estimates and lets not forget I actually have to work to make some money. And I am not rolling in the dough charging 500 a day.
> *Either you are in competition with a lot of uninsured guys who will work for nothing. Or you need to sell your expertise to a higher end customer.*Just my opinion Murph


For anyone who thinks I'm pointing fingers at them........ THIS is the specific post that got my feathers ruffled. 

And for the record....... I did it again....... :wallbash: ........
I posted without looking to see which forum it is in. But the thread itself does pertain to all trades as far as I am concerned. We should be able to charge whatever we feel comfortable with IN OUR MARKET. I do not believe someone in a high cost of living market can tell someone in Mayberry that they will never make it on what they charge! :no:


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## Murphy (Mar 28, 2006)

I guess I wrote that post based on my own experiencen not any type of business expertise. 

I run a tight ship with little to no overhead I have to pay for my gas my truck my insurance my tool up keep etc. I started on the 200 a day will be great money bandwagon after a few months of simply paying bills and working my balls off I found out that 
200 a day for me was like 8 dollars an hour and with all the running around I was doing with gas at 3 bucks and paying uncle same a whole bunch I didn't have any left.

I was working myself into the ground for nothing. 

I learned the hard way that the homeowner with the really easy quick fix will always have 15 problems and when you tell them how to fix it right they always think that will be easy and that work will be included. 

It is better to stay home and spend quality time with your family then it is to work for nothing.

I don't presume to know what will work for your in your market. I was just going off my (rather slow) learning curve. Trying to save someone from what I went through my first 3 months in business.


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## Gordo (Feb 21, 2006)

My old right hand man went into business as a competitor. He lasted 1 year. Some of these jobs he was telling me about were crazy cuz he was making like $5 dollars an hour before taxes.:laughing: 

He always used to give me a hard time for 'over-charging'. I think he understands now.:w00t: 

He has folded.

DO NOT BE AFRAID TO MAKE WHAT YOU ARE WORTH!


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## Riverside Paint (Sep 16, 2006)

I started painting again two years ago after a 15 year hiatus, started charging around $250/day in the beginning, jumped to $400 about six months later. Now my labor rate starts at $850 per day, sometimes I charge $1k, sometimes more, it all depends on the work environment, job specs and materials used. I work solo ~98% of the time.

I estimate my jobs differently than most of my competitors. Instead of giving them just a daily rate or just a flat rate, I give them both. Doing this keeps me from getting financially hosed when a customer changes or adds new colors/finishes mid-job; it takes the guesswork out of additional charges. 

Also, I never ever tell customers I have a fixed rate. The way I look at it, charging a renter living in a $2k/mo 1br the same rate I charge a property owner living in a $20k/mo condo is just bad business. As much as I may or may not like the task of painting some days, I'm ultimately in the trade to make as much money as possible. 

The best piece of I advice I can think to offer is to avoid price shoppers at all costs. It's one thing to haggle over rates when youre first getting started, otherwise, its lead to nothing but headaches for me. The hagglers are always the first to complain about trivial stuff, always looking for free add-ons, claim to have friends who need work, headaches....


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## Terrence (Jul 6, 2006)

Riverside Paint said:


> I started painting again two years ago after a 15 year hiatus, started charging around $250/day in the beginning, jumped to $400 about six months later. Now my labor rate starts at $850 per day, sometimes I charge $1k, sometimes more, it all depends on the work environment, job specs and materials used. I work solo ~98% of the time.
> 
> I estimate my jobs differently than most of my competitors. Instead of giving them just a daily rate or just a flat rate, I give them both. Doing this keeps me from getting financially hosed when a customer changes or adds new colors/finishes mid-job; it takes the guesswork out of additional charges.
> 
> ...



Hi Riverside!

I lived in the East Village for the past 18 years, and recently moved to suburban NJ with my wife. We have a good strong market out here, and I am doing fine. I did some handyman work while in Manhattan, and some painting, and I am oh so familiar with that scene.

Currently, in NJ, my reputation has grown enough around Maplewood, and the outlying areas that I don't advertise at all anymore, and am still having a hard time keeping up with the work (I am halfway out of the bucket, but don't want two guys yet... I have one now).

I was just wondering what venues you have been using for your promotion. The low-ballers there ($99 a room) all use Craigslist, and years ago I was using the backpage of NY Press (before it turned to junk). I also spoke to some Real Estate Agents for leads with good success, and my flyers worked pretty well too.

I was wondering if you had tried any of that, or if you had a completely different strategy.

As far as your stratified pricing scheme, I do the same, with approximate house values (400k-800k, 800k-2M, 2M-12M). The better homes out here are in Millburn and Summit.

---
Bon Jovi has a house out here somewhere I hear... :laughing:


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## mahlere (Aug 6, 2006)

Terrence said:


> Bon Jovi has a house out here somewhere I hear... :laughing:


he has a couple. i'm about 5 min from him, bruce and queen latifah. Quite a mix. Beautiful horse country in the middle of the Jersey Shore.


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## mahlere (Aug 6, 2006)

river rat said:


> i appreciate all your responses guys.
> i was more than a little pissed off when i wrote it. but im over it now. gotta move on.
> i dont use any fancy software programs to determine the cost of a job.
> ive always used my good judgment from 15 yrs of exp.and intuition. and yes, sometimes im off, but not too far off to cause me to change tactics.


there is nothing wrong with using your experience to price a job. But, utilize that same experience to sell the job. Sell the customer on the fact that you have been around for 15 yr. Sell them on the fact that you have years of experience doing jobs just like theirs. Differentiate yourself from the new guy that might not be around in a year.



river rat said:


> i tried to increase my rates, but the experiment failed. at least now i know i was being greedy.


you have to look at it this way. You have been in business for 15 yrs and probably have built a reputation (or at least you shoud have) Unfortunately, you have built a reputation as a $200/day painter. Your referrals and repeats expect a $200/day price. You will never be able to do the same exact thing on Monday and charge double the rate as you did on Friday.

You have to make major changes over the weekend to double your rate. However, if you showered over the weekend (hypothetically speaking) and put on some good cologne, you can probably easily get $225 on Monday 



river rat said:


> i have no overhead- no employees no truck payment, so its all pretty much profit.
> most of my money goes to walmart. heh heh.
> i just started advertising in a major newspaper two weeks ago and ive only landed 1 job so far.
> i have no net to catch me- no credit, no savings,no health ins. yep it gets scary, especially when rent is due in a few days. and the phone isint ringing.


this is a major fallicy among self-employed contractors. Truth is, you really aren't making a profit at all.

_profit
Definition

The positive gain from an investment or business operation after subtracting for all expenses. opposite of loss._

Profit would be after you pay yourself a livable wage, cover your health insurance, pay vehicle repairs, pay telephone bills, pay business insurance, pay etc, etc, etc. 

BTW, I need to generate $7/hr (for each of my 40 hr weeks) just to cover health insurance for my family ($14,000 a year)

Even as a one man shop, you have overhead. You might not have a new vehicle, but I'm sure you pay for repairs. You might not have uniforms, but do you wear your church clothes to work? Is gas free in your area? Do you bill all your tools (brushes, buckets, rags, etc) directly to the customer as a separate line item? 

Honestly, whatever your determined rate is, keep these things in mind:

After 15 yrs in business, there is no reason to not have credit, health insurance or be able to own your own house. 

If you choose to rent, that's a different story.

Did you know that McDonald's operates on a projected 22% NET profit?



river rat said:


> but its better than working for someone else.


Is this really true? We are an electrical contractor in NJ. My residential technicians earn between $55,000 and $65,000 a year. That is their salary. We also provide:
company vehicles
paid holidays
company cell phones
paid vacations
health insurance
and a few other things.

Our techs work 40-50 hrs/week and get to pretty much turn off their worries and responsibilities of at 5 pm.

If I wasn't making at least that much being self employed, I'd go work for someone else.

Now, before everyone jumps in with "my market won't bear that" - if your market won't bear you charging enough to:

pay yourself a livable wage that allow you to own a home, go on vacation, pay for health insurance, pay yourself on holidays, buy equipment that you need to do the job right, own a nice personal vehicle (so you don't have to drive your work truck everywhere) take your wife out to dinner at the most expensive restaurant in town at least 2x a year, etc, etc,etc and still make a profit in the same ballpark as McDonald's....then it might be time to look into a different market.

Now, if you are comfortable letting your market determine you living conditions, that is fine, but please do not disparage anyone who wants to dictate their own living conditions and figures out a way to do it in their market.

No offense to anyone, just trying to help a little bit.


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## Double-A (Jul 3, 2006)

*Joasis and Maj*



joasis said:


> You know, I was thinking about this post a little while ago, and while there are fantastic ideas floated here about marketing, how to sell, etc, etc.....what finally dawned on my is not only do maj and I have different markets, but the very nature of our work does not fit the profiles or selling stratagies...maj builds homes primarily...and you will not roll into his market and start charging $125 a ft for a spec home...same for me...then it won't be a matter of selling the customer on all the extras you offer, but realism will set in and you won't be able to sell the job period. Compare the concept of how much to charge by the day.....if maj or I bid on a home (and our markets are nearly identical), we will go for a sq/ft price based on experience...lets say $30,000 to build a 1600 sq/ft home...now if you say that we can, with great marketing and sales skills, suddenly make $60,000 in labor and not loose the job to another builder...I am all ears. If this could actually be done, it would boost new home prices by an incredible leap...and surely all the other builders would follow along, rather thn let the customer get fair and actual value.


Let's get something clear here. New construction is production work, not service. Almost everything else is service work of one type or another.

Maj and Jay, you're right about your markets and you know your areas well. For production work, you have an upper limit for price that is dictated by your local inventory of like product and the availability of other manufacturer's and their prices.

For service type contracting, repairs, paint, installations, remodels, additions, flooring redo's, etc., this does not hold true. You don't have a ready inventory of extra rooms to buy and tack on to your house. All service work is a built-in-place prototype. Never been done before, may never be done again.

Even roofing falls into this category. If you're not roofing the same house day after day, then you're doing service type work.

So, to take what works in one type of business and try to use it in another type of business is not as easy as it might sound. Some of it will carry over seamlessly, some of it won't.

So, to sum it up; Its not only the different areas you two are working in, but your main focus of business model is much different than many others on the forums that tout not competing on price and selling yourself and your company first.

For a service contractor this is the mainstay of business and the secret of charging what they are truly worth. For a manufacturer, this is more difficult, because you're not just competing with other builders in your area, you're also competing with every building of a similar size that is for sale.


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## Brushslingers (Jul 28, 2006)

Exactly AA, dealing with a HO and dealing with a contractor that already has a set price for finish per square with the bank are two entirely different animals. If a builder tells a bank 18.75 per square to finish from ground... it better be on time, and 18.75 per square to build and finish, so they already know they have to break it down to 1.00 per square for crete, 1.00 per square for frame, 1 per square for rock, etc. HO however, most re-paint their homes once every 3 to 10 years... they consider it an investment to raise the vaule of the home for possible 2nd mortages, etc.. in this case quality counts more than the cheap pre-set price of the banks financing. Or remodeling, most people want a new bathroom, and will pay more to get the higher end of the scale since... it will be the last time they do this in thier lifetimes. Even siding, if you have a HO with T1-11 and it starts to rot, they will go for the slightly higher price of hardi if you insure that you tell them 50 years from the manufacturer.

BTW, I would have to slightly disagree anyhow, there are about 40 home builders here.... some only build 6 a year, but the houses are custom, made to order.. specialty, so ya, you could charge more and still make out good. There is one builder in particular here, even his spec homes are more expensive than others... but he consistantly sells them faster than others. 

EDIT : I will add, he has a great name in town and buys land.. then starts a development and invites other builders to buy plots before he even goes to the bank... so he may be a rarity.


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## Jon F (Jul 15, 2006)

Mahlere:

GREAT, GREAT, GREAT POST!!! Man, some posts depress me but I needed to read yours today. Nathan should make that a 'sticky' and put it at the top of the Painting Forum. Very well said.


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## George Z (Dec 23, 2004)

Jon Fife said:


> Mahlere:
> 
> GREAT, GREAT, GREAT POST!!! Man, some posts depress me but I needed to read yours today. Nathan should make that a 'sticky' and put it at the top of the Painting Forum. Very well said.


Well said indeed.


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## maj (Mar 13, 2006)

QUOTE=Double-ALet's get something clear here. New construction is production work, not service. Almost everything else is service work of one type or another.

Maj and Jay, you're right about your markets and you know your areas well. *For production work, you have an upper limit for price that is dictated by your local inventory of like product and the availability of other manufacturer's and their prices.* 
*You really lost me here. local inventory of like product? availability of other manufacturers? I don't build production tract housing! I custom build, one-of-a-kind homes to pre-sold customers. *

For service type contracting, repairs, paint, installations, remodels, additions, flooring redo's, etc., this does not hold true. *You don't have a ready inventory of extra rooms to buy and tack on to your house. All service work is a built-in-place prototype. Never been done before, may never be done again.* 
*Again, you lost me. How would building custom, one-of-a-kind homes NOT fit your description here?*

*Even roofing falls into this category. If you're not roofing the same house day after day, then you're doing service type work.* 
*Roofing is about as production type service as you could get. IMO*

*So, to take what works in one type of business and try to use it in another type of business is not as easy as it might sound.* Some of it will carry over seamlessly, some of it won't.
*EXACTLY..... THAT'S what I've been trying to say on these threads about this topic.*


So, to sum it up; *Its not only the different areas you two are working in, but your main focus of business model is much different *than many others on the forums that tout not competing on price and selling yourself and your company first.
*YEP..... Been trying to make that point all along.  *


For a service contractor this is the mainstay of business and the secret of charging what they are truly worth. For a manufacturer, this is more difficult, *because you're not just competing with other builders in your area, you're also competing with every building of a similar size that is for sale.*QUOTE
*All I can say is.... You really don't know my market do you?*


*And for the record....... I am not the one who brought all this bs back up! :no: *


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## Riverside Paint (Sep 16, 2006)

Terrence said:


> Hi Riverside!
> 
> I lived in the East Village for the past 18 years, and recently moved to suburban NJ with my wife. We have a good strong market out here, and I am doing fine. I did some handyman work while in Manhattan, and some painting, and I am oh so familiar with that scene....
> 
> ...


I used Craigslist exclusively to get started. It has been and continues to be a great source for new business. I worked in technology for years and feel reasonably certain that if I spent some time marketing my web site, I could pull a bunch of new business off google and yahoo search engines. Right now, I am as busy as can be. When or if things slow down, search engine marketing will become a priority. 

Referrals from brokers started trickling in after about one year. Now, broker referrals account for over 90% of my business. I predominantly work in luxury high rises, 8am-4pm, Mon-Fri gigs, which is good because if the building managers let me work 14 hour days seven days a week, I would.


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## mahlere (Aug 6, 2006)

just a couple of quick thoughts:

someone has to be the highest contractor in your town, who is it? why isn't it you?

the current "going rate" wasn't always where it is now, someone had to push to raise it over the years. what's stopping it from happening now.

contractors are their own worst enemies. we think of eachother as competition that we must beat, rather then working together like gentlemen to make a better life for ourselves, our families and our employees.

if there is a mercedes/bmw/lexus/etc dealership in your town, you can charge more.

if the average house in your service area is $30,000, you won't be able to charge the same at the guys who's average house is $400,000. But you won't need to. 

learn what your profit really is, and be honest. Don't consider your salary as profit. What is a fair profit? 10%? 20%? Remember, McDonald's, whose sole contribution to society is fat kids and cardiac arrests, works on a 22% NET Profit.

educate yourself and become a professional. You are not a painter/plumber/carpenter/electrician, etc, you are a contractor. Treat yourself like a professional contractor, and other people will as well.

A friend of mine, who is a locksmith, once told me:
'Charge then $25, they call you lock boy. Charge then $50, they call you lock man. Charge them $100, they call you sir'

You can not mimic the $15/hr guy and charge $30/hr. You need to differentiate yourself. 

If there is a franchised food place in your town, people will buy subpar products because of better advertising. Imagine what people would pay if you had better advertising for a better product.

There are always a million reasons why you can't do something, try to find out why you can. It's much more fun.

Good luck


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## K2 (Jul 8, 2005)

I havn't read the whole thread but I have always been the leanest, meanest guy in town and still am. Some people call me sucessful and some people call me rich, (which really annoys me). I don't consider myself either but I think I've done better than a bunch of guys that charged more. 

In 1982 I was framing 3/2/2 tracts for 800 bucks. I wasn't real proud of them and I didn't post pics on Contractor Talk. It paid the bills and kept some people warm, out of the weather, and earned them some equity. The houses still look pretty nice today.

My experience is that 75% of the high rollers are FOS.


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## Brushslingers (Jul 28, 2006)

Rob 53 said:


> My experience is that 75% of the high rollers are FOS.


Heh, I will agree with that 100%.


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## mahlere (Aug 6, 2006)

Rob 53 said:


> Some people call me sucessful and some people call me rich, (which really annoys me)


what's wrong with being wealthy from doing what you love




Rob 53 said:


> My experience is that 75% of the high rollers are FOS.


Interesting thought. I tend to think that 90% of people that brag about what they have are FOS. I guess that is what you are considering a high roller.

But if you consider knowing your true worth, understanding your unique value, and charging enough to have a life (not just enough to live) then call me a high roller who's FOS.:thumbsup:


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## K2 (Jul 8, 2005)

> But if you consider knowing your true worth, understanding your unique value, and charging enough to have a life (not just enough to live) then call me a high roller who's FOS.


I'm not sure the electricians get in to the same level of cutting throats that most of the other unlicensed trades do. At least I would say that is true in my area. 

Nothing wrong with being the higher priced guy. Nothing wrong with being the most competetive you can be. My point is that either way can work. Just depends on the person. 

Knowing your true worth and being unemployed doesn't sound like a good option.


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## mahlere (Aug 6, 2006)

I agree. Electricians get incredibly cut throat. Go figure. I just figure if I can't make the money here, I'll do it someplace else. 

I think we are on the same page, just wasn't positive.


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