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Low Balled? or just luck in the past

highland

New member
Lately we have lost a few bids that has me wondering if my pricing is way off.
For the past 1 1/2 years we have been fortunate enough to win several large townhome community bids. I based my pricing off of my overhead, desired profit, expences and payroll and what I thought the job was worth. Since we got the jobs I assumed we were in the ballpark with other bidders.
Recently we lost two major bids for similar townhome communities. At one, the HOA told me that I was high bidder by more than $15,000, and at the other we were high bidder by over $25,000.
Both communities are made up of the standard 2 story buildings with 6 units in each building. The bid included washing all buildings, the concrete 10x10 patio on each unit, the 3x12 front porch on each and the 4x10 sidewalk on each.
On the bid where I was $25000 high, it also included the public sidewalk throughout the community and the driveways on approxamately 1/3 of the units.
When I broke the prices down by the square foot, it worked out that the winning bid was
less than 7cent per sq/ft for one community and under 5cent per sq/ft at the other.
I don't think I could make a profit doing these at this price, so my question is:
Are these close to normal sq/ft pricing for townhome communities in the Carolinas? Or did I just run into a couple of low ballers?
If it is a normal pricing structure, I need to re-evaluate my cost!

Thanks
 

Jeff LeCours

New member
I've been low and I've been high on bidding and my prices are always about the same per unit. Pricing is all over the place these days and its usually on the low end. I have lost jobs where I was double the price and I have lost jobs where I was just $50 dollars more on the same exact type townhome buildings. It all depends on who's bidding and often at times what management company

What was your sq ft price on concrete? I have seen it $.05 - $.015 over that in this area forget it. I would not do it for the low end price on sidewalks and I've seen lower than that believe it or not. If your bid is $25K more I have a feeling you are way over the $.15.

I used to do a big contract 15 different properties, the guy that got most of this year did it at almost 48% of my lowest rate. Good thing I think he went broke doing them at that price, because he called and backed out of several properties he had left to do. I heard he's working at a full time job now and does PWing on the side. Good thing because he obviously has no clue
Its a jungle out there, welcome to the jungle
 

highland

New member
What was your sq ft price on concrete? I have seen it $.05 - $.015 over that in this area forget it. I would not do it for the low end price on sidewalks and I've seen lower than that believe it or not. If your bid is $25K more I have a feeling you are way over the $.15.

I was $.10 on the concrete.
 

highland

New member
There are a lot of buildings, very large community and they bid under $.05 on everything including the concrete. This also included the public area sidewalks that run along the street.
 

David Vicars

New member
There's a difference when Jeff bids on something and I bid on the same thing. He can send 6 guys, 4 or 5 machines and knock it out in three days. He's still out bidding on jobs and getting more work for his guys. Me on the other hand, will send 2 or 3 guys, 2 or 3 machines and be on site working. I have to charge more because I not out getting more work at that time.
 

Jeff LeCours

New member
There are a lot of buildings, very large community and they bid under $.05 on everything including the concrete. This also included the public area sidewalks that run along the street.

I've seen it 3, 4, 5 cents before, they make pennies but for some of these guys its more than the check they got from there fulltime jobs before they were laid off. Most don't stay in business, some learn and a few survive on the pennies they make. Usually their quality MIGHT be OK, but then goes down as they try to speed up or cut corners to make a few extra pennies. Its a jungle out there Dave

We got a guy around here, nice kid, not to bright but still a nice kid, try to telll him ball park and he never listens. He did like a zillion feet of 4 rail vinyl fence, I forget the price but it waslike $350, everybody else bid it for $2000-$3000. He probably worked days on it for $350 , I forget and he was probably happy. He does this kind of pricing on everything and he's been around at least a few years now
 

highland

New member
There's a difference when Jeff bids on something and I bid on the same thing. He can send 6 guys, 4 or 5 machines and knock it out in three days. He's still out bidding on jobs and getting more work for his guys. Me on the other hand, will send 2 or 3 guys, 2 or 3 machines and be on site working. I have to charge more because I not out getting more work at that time.​

Good point! I don't know the size of the other guys crew. I also am on site working. I hope someday that I can just do sales and leave the field work to others. Never hurts to wish.
 

Chris Tharpe

New member
Is Mike Cooke still playing with his water Gun, lol. In all seriousness, its nice to see competitors sharing helpful information in the same thread.
 

Douglas Hicks

New member
A common figure I hear is if you get more than 80% of hte jobs you estimate, you are too cheap. It sounds as if you know your costs, I'll bet the low-bllers do not. And how many of the low-bllers will be in business next year? At the end of 5 years, 95% of the new start ups are gone. Keep your prices up, some of those who chose the cheap guy will be back. When they come back, make an adjustment. Or, take great pleasure in telling them, "I am sorry, we have already filled that time slot. It will be a couple of months before we can schedule your job."
 

Guy Blackmon

New member
A common figure I hear is if you get more than 80% of hte jobs you estimate, you are too cheap. It sounds as if you know your costs, I'll bet the low-bllers do not. And how many of the low-bllers will be in business next year? At the end of 5 years, 95% of the new start ups are gone. Keep your prices up, some of those who chose the cheap guy will be back. When they come back, make an adjustment. Or, take great pleasure in telling them, "I am sorry, we have already filled that time slot. It will be a couple of months before we can schedule your job."

Great Post Doug, And Very, Very True!!!!!

Again, If you're a "1 Man-1 Unit Show" you will not be able to compete with Companies with, multiple employees, multiple rigs, and make a reasonable profit, there's just no way. I found this to be true in my case, when I first started. If you're going after condos, apartments and large Communities you must have 2 or 3 (Or More) high volume (GPM) pressure washers, to get the job done faster. That will enable you to be more competitive on your price, get the job done quicker and still turn a pretty good profit.

Even if you do this you still may not get some jobs, Nature Of The Beast.
 

Michael Tessaro

New member
Very true Doug. I would guess, out of business in 2 years. But there is always another startup to take their place. Knowing your costs is incredibly important. The only one who wins is the buyer in a lowball situation. And that isnt always true. People will accept low quality for low prices for a while. Mr Lowball finally realizes he cant work that cheap and fails. Mr Buyer is dis satisfied in Mr Lowballs work and get no satisfaction.
 

Tim Fields

New member
The only one who wins is the buyer in a lowball situation. And that isnt always true. People will accept low quality for low prices for a while. Mr Lowball finally realizes he cant work that cheap and fails. Mr Buyer is dis satisfied in Mr Lowballs work and get no satisfaction.

Very true Michael. That is why if questioned about prices, I always find a way to work in the "gotta charge enough to do it right". Some get it, some don't, and sometimes, I'm just too high.
 

Jeff LeCours

New member
Very true Michael. That is why if questioned about prices, I always find a way to work in the "gotta charge enough to do it right". Some get it, some don't, and sometimes, I'm just too high.

If you're to high to do sales I suggest you stop smoking pot LOL

I like that line, gotta charge enough to do it right
 

highland

New member
Thanks guys, a lot of good info here. I am a 2 person 2 unit setup at this time. I can see where having more people and units would allow me to lower my price some------but not that low.
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Roger Gothorp

New member
Dave, the Carolinas (especially NC) are seriously the hatchery for newbies..and a few old die hards that just won't come around to the 21st century either...just keep your contacts - good chance they'll be back to you. Far too many haven't grasped what it costs to be in business so they're not around long. Other companies seek to grow to multiple crews (more than 2-3) and MAY be more efficient. At the end of the day, the customers that you want to keep are the ones that are keeping you regardless - not because of your size or price, but because you deliver what they NEED.
 

Jeff LeCours

New member
Dave, the Carolinas (especially NC) are seriously the hatchery for newbies..and a few old die hards that just won't come around to the 21st century either...just keep your contacts - good chance they'll be back to you. Far too many haven't grasped what it costs to be in business so they're not around long. Other companies seek to grow to multiple crews (more than 2-3) and MAY be more efficient. At the end of the day, the customers that you want to keep are the ones that are keeping you regardless - not because of your size or price, but because you deliver what they NEED.

What she said.

Dave you are right, not that low for sure. $.05 on sidewalks you arent making money, sidewalks are to spread out, to many moves and obstacles, I dont care how many crews you have $.05 is to low to make anything but pennies

I can tell you, we often will work on a property for 3, 4 5 years in a row and all of a sudden they go with someone else because of LOW price, I would say I get half of them back within a year or two
 
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