Contractors, stop pricing by the foot!!! How to price your jobs.
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- Опубликовано: 28 янв 2021
- Are you bidding your construction projects with a flat per-foot rate? You need to stop! You may as well stock up on Advil and Tums because you're in for some misery. In this video we look at identical looking projects that simply couldn't be priced the same, and talk about how you should be bidding projects, whether you're building fence, laying tile, roofing, or anything else. Don't miss our interview with Scott Shoopman of Smooth Edge Custom Construction where Scott informs us of the ridiculousness of flat-rate pricing in any part of the building process.
I've said this all along and follow it to this day, and I NEVER work by the hour. New subscriber bro
Best line ever!! "That sounds like a ton of money, I'll do it!"
I’m following you non stop.
Estimate and Pricing is my problem. Thanks ❤
Well done and very good information for our fence industry professionals.
Thanks for pointing out the important issues in all fairness. Too bad many won’t listen to reason. May God Bless.
Man, this is so fascinating...I had no idea. I have so much respect for fencing professionals now that I've seen this video! Very cool!
You can still do Square Foot but have a modifier for different conditions like *1.1 or *1.3 etc. So you have a base that you multiply against. I did this all the time as an estimator.
So much wisdom here! Thank you for sharing this with the world!!
Happy to help!
Great video guys
Ha that hillside…. Man I bid a fence project many many years ago with similar conditions. Had to use sonotubes. Had to dig the holes by hand ✋ not just a shovel…. Also holes kept caving so many holes had to be dug 5x larger tubes set and backfilled. Was large rocks and sand backfill behind a rock wall. I was overzealous and went 3-4 ft. Most solid fence on the block. I lost so much money. Was too timid to communicate the added cost. Did a lot of volunteer labor on that job. It’s good not to forget these painful experiences. Do your work on the front end. Sometimes it’s easy not to incase the customer backs out. Still gotta do the brain work. Beats manual labor.
Sometimes the best jobs are the ones we don’t win.
So glad to see someone from the fence industry making videos. Love the information so far. If you dont know the numbers per job, you can easily be going backwards on the project. I learned this the hard way my first full year in business.
So true. Glad your enjoying the content!
Hey how many years have you been in business??
Great information!
Ive been contemplating per foot pricing in Canada for our lake erosion projects. I hear what your saying with each project beeing unique
I absolutely do have a rock clause and it has saved us twice. One was about an 8000 yard cut and we hit sandrock About the size of the excavator. We had to bring in a breaker and chisel about a foot down to make grade. The other was installing 160 feet of 10" double-wall pipe and we hit a vein of granite which prevented the trench from staying on grade. So we had to use a saw and breaker to bust it up so the pipe could keep slope. Both times we switched to time and materials until the obstacle was removed, then it was right back to the contracted prices.
Great video
Grate video, learning alot!
Glad it was helpful!
Really helpful, Thank you!
That’s why we are here.
Good video!! Quick way to sum it up is basically, don’t bid a job over the phone.. go look at the job before bidding
Some people can get away with it but be ready for surprises.
Awesome video! Thanks
Thanks for watching!
That was a great video thanks a lot
Happy to help
Another great video mark, So true, have to know your numbers and stop the race to the bottom.
No practice needed. Profit on every job!
I need more knowledge on estimate’s and pricing thanks 🙏
Excellent explanation, people just don't realize the variations. Columns have that effect big time like a 2 ft square column, open it up and it's 8 ft of wall
Glad it was helpful!
I’m out here in Tacoma Washington by mount rainier and man I totally get what you mean about pricing. Some spots (ok most spots) out here are notorious for the horrible digging and they get priced accordingly
Per foot pricing is a death trap!
Thank you!!
You're welcome!
Awesome info/video Mark...love watching your content and learning!!! I will say, we have a dog poop clause in our contracts, but we’ve never charged, and makes the customer mindful and respect the fact that they’ll have workers in their yard. We’ll get text from customers saying, “We’re ready for the Fence King tomorrow! All the dog poop is picked up, all the private utilities are marked, and we’ve made sure you’ll have no parking issues!”
We’re glad to have you along. Have you tried a customer responsibilities checklist rather than a co tract clause with the threat of charges? We do that to clearly define their responsibilities in the project process.
@@SuccessfulContractor no, but that’s definitely something to consider!!
How long are your bids good for and do you have a price on material subject to change clause due to price changes from providers? Great video by the way good info
We are only holding bids for 3 days currently. We haven't found that we need to eat any costs if we keep them valid for a shorter period of time. It helps that we stock most of our materials so we have most of our costs locked in.
@@SuccessfulContractor thank you that seems to be the norm right now just seeing how other contractors are doing thank you for info
Well, I certainly learned this lesson the hard way when starting my company. In the beginning, almost all of my work was subcontractor work, and the builders/stores I subbed for always pressured me for price sheets. I understand that they wanted to be able to present a price to the potential client, but how many times I ate it...I don't even know. Now most of my work is direct to consumer, or with a short list of builders who share a mutual respect for all parties involved. Quite a lot of my work is remodel work that is design build as we go. For that, much of the work is t&m, and I help guide decisions based on expected labor efforts.
Anyhow, thank you for the video. You have a good dang day!
Exactly. Im in the painting & home repair business. But the idea is still the same. Never quote by square feet alone, and never quote by pictures. Always visit the job first hand. someone calls up and says "I have a 4,000 sq ft home. How much to paint it? All that 4,000 Sq feet does is tell me the floor space. It doesnt tell me what kind of shape the walls are in. Is there crown? chair rail? What condition is the caulking in and does it need to be cut out and re caulked? A room or house can look fine in a picture but when you get up close and personal be an entirely different story. I saw one video where a guy uses google earth to do quotes also using the rational of well we may lose on one job but it might be made up on another. So it all balances out. What that tells me is that because he is too lazy to visit a potential jobsite, he thinks its ok to overcharge one customer because he undercharged on another...No. See the job first hand first then give every customer a square deal based on their own unique circumstances and make money on each job. Not to mention you get to develop a relationship with each customer and your reputation will only benefit for it.
💯 nobody wins if we try to treat every job like they are the same.
The thumbnail of this video is fkn CLASSIC!🇺🇲🇺🇲🇺🇲
Thanks!
For me pricing is all about knowing my overhead. So I know what the minimum is that I have to make plus profit which is my base line. So I can look at a job and know it’s going to take me 5 days to do or 1 day and give the customer a base price. Some jobs could be a total price some jobs may be a unit price. $7/LF sounds a lot better than $2100 for 300’ of pipe. Depending on the customer I can tell which one wants to hear which price. If it’s a problem job (failing drain tile) those customers aren’t willing to pay a premium to get a problem fixed. Whereas a customer wanting a pond or any other “want customers” will pay a premium to get what they want.
Very few people talk about want vs need clients and projects.
You can have a basic square foot price, then add for difficulty. I do it all the time and never under bid!
I 100% agree with each bid needing to be individually constructed. There are too many pitfalls at the margins to stick to a per foot price. Per foot has its place as a guide or a baseline, but not as a pricing end-all be-all.
And I know you chose the title as click-bait, but it's really not a very good analogy. That said, get those clicks!
I genuinely think it is the contractors equivalent of socialism. If you charge by the foot you expect the wining jobs to cover the losing jobs to hopefully average out.
@@SuccessfulContractor There’s no analogy to socialism other than a centralized pricing source. And since there’s more than one source of painting services, it’s not socialism at all.
Do you locate utilities before bidding and how would you know if the fence is going to be too close to utilities in the bidding process?
We have at times done them prior to a site visit. However, that's not always practical. Our sales staff is always on the lookout for conflicts and usually there are indicators such as pedestals and meters that provide clues. We do anticipate some hand work on every job regardless.
@@SuccessfulContractor Thanks for all the videos. They are very helpful.
You can always add a clause for rock, utilities
Been screaming this for years
Do you itemize out each material and labor cost when bidding? Just material? Or just tell them the total price?
I usually tell them the price, then if they ask for materials ill give it to them. We also do another of dirtwork that gets charged an hourly rate with operator per piece of equipment
We bid everything to the customer as a lot so I’m turnkey project. However, on our bid form we break it out so that we know the cost of labor, materials, permits, insurance and every other small little aspect that goes into the project. The customer does not see any of this. All they see is the complete detailed description of the project with the lump sum price
Is there a good "fence building standards book" that describes how a fence should be built? I am not talking about municipality standards.
ASTM has standards but other than that, its all over the map. Our channel SWI Fence outlines what we consider standards which have served us well for over 20 years.
Too many contractors work for wages here in new mexico
I have a question I’m trying to get my paver and earthwork license and I wanna apply for it but I don’t know where to apply for it
Check your state licensing division as well as go and talk to your city building department as a start.
I never priced any job by square footage. I hate when generals or customers call and want to know my square foot price. Every job is special. Materials, site conditions, equipment needed, etc.
The difficult part for buyers is they get itemized quotes for the same thing and every one of the quotes has different pricing for each item. That is confusing and creates distrust for the buyer. Any thoughts on that?
There are many different ways to present the same information. This is work communication with your buyer is important. I would suggest following up with them after you have the estimate prepared and going over it in detail. I’ve seen numerous occasions where three different companies were bidding the same job but all had a different scope of work. Understanding what the customer really wants and giving a written narrative as well as a side sketch so they know the number you are providing them includes everything they are looking for is the most important part. The total of the bed should include all the work the homeowner is looking for. From there the price difference can often time be explained by differences in material and installation technique. It is our job to help educate the customer about why there may be a difference in price from one contractor to another.
There isn’t a final universal price bc of overhead and business model. It’s like going to the hairstylists in a small town then going to the next city over and paying double for the same exact hairstyle. The experience, quality and value can all be a factor
11:00 i have worked for 5 national builders, your price is based upon the plan, the home owner is not the builder, i don't care if they bought it before you built it, you bid it before they bought it...anything not spec with the builders plan is a change order, and price your change orders accordingly 150% at the least FOR EACH CHANGE FROM THE BASE BID. lennar, fenna, and u.s. homes and cal atlantic put so many contractors out of business with this practice making the contractors absorb the cost except for 3 stucco companies who stated the association bylaws formed the contract when everything on the exterior had to be the same, no home owner was allowed to change colors, decoratives or materials and thicknesses or finishes.
so when i hear this guy talking, i automatically know he will be run out of business and exactly how his company is going to fail. i watched over 223 contractors go bankrupt from 1998-2008
Cool idea for a channel
Thanks!
Successful contractor -
Instant Subscriber
My last project this summer kicked my butt You have to think “ business is business”.
Happy to have you!
I am getting into the business of fences, decks, and walls. Can you give me any tips to being successful please. Contractors license? List of to dos and donts if you will?
Most of what I have to advise on is contained in the channel. There are so many useful videos if you go back and review the catalog that will help you.
Dude awesome video the whole end, talking with the other gentleman made so much sense I hang and finish drywall in the square foot number is obviously different every house I get to and people always want a square foot price, but it varies so much house to house. It’s crazy. Thanks for taking the time to put this out there
@Successful contractor i have a question okay im 19 I’ve done fences and remolded houses for since I was 16 and I wanna start my own business but i don’t know where to start just wanted to know where I should start or what I’ll need to start? Also wanna say thanks for this video
The biggest thing you need is a mentor--someone that can show you how they did it and help you navigate things at the beginning. Learn all you can! Google, read, watch, but get SMART. Start by googling "how to start a business in (your state)." You can do this! Always take pride in your work and treat your customers like you would want to be treated. And find someone who knows what they're doing and glean all you can from them. 👍🏻
What’s your Instagram man i like supporting new people I do landscaping projects and I just started
Great title. My brother has a commercial masonry company & prices now in california are at best barely above cost of materials. Some companies bidding even lower or right at cost of materials no lie. I know it sounds like im exagurating but its that bad now here. My brother quit bidding for so many builders because he comes in at least double what the next bid is. They try & think he is a moron & always act like his prices are outlandish. They beg him to to the most custom of custom jobs though when the other companies cant do them or want him to fix stuff they FUBAR. I was a mason & come from a family of tenders & masons. I hate it but was in the trade from 18 to about 33. So I paid my dues & worked for slave driver companies. Working with ex cons & drug addicts for years. It sucks. F masonry. But the pay now is lower than it was in the 70s! And theres not even real masons anymore. Most companies hire at least mostly illegals for cash & pay them like 13$ for layers & even under 10 for tenders. American "masons" here cant even get $18 hr if they got 20+ years in the trade. I wont touch a trowel for under 50$ hr. Its going to burst soon. It all starts from the top too. The builders know they are getting work done for nothing. Companies going bankrupt cause they are stupid enough to bid jobs at damn near materials. Its sad to see.
We found our USP and are using it to our advantage. When you do that, price isn’t the main driver which means we can pay our people better too. I don’t want a company that sets the bar at creating a job. It needs to be a good job.
How much is labor cost per panel and post ?
Still not quite the right way of looking at it. 🙂 We have to start with how many hours we think our guys will be on the job site, which is where we factor in soil conditions, type of fence, fence run, and any other adverse factors like utilities or neighboring fences. There is no flat labor cost per panel just like there's no flat cost per foot.
@@SuccessfulContractor wow okay thank you for saying that. I would like to start a fence business but I'm new to this
You've got this! You're doing the right thing by searching out information and learning as much as you can. Don't stop!
You have to spend as little time as possible on pricing jobs as you obviously make zero money for this work. Give an estimate with given info. Pricing by the ft helps tremendously to give a quick price (which is what most people want). Note potential problems in the estimate. If they are interested schedule a site visit to give a firm price. Give prices asap. That’s what will keep you in business.
I have never charged by the foot because it never made sense to me. Every property is different I take account trees, roots, other plants, neighbors, and any other obstacles that may come into play. Also how the property is graded. I treat every job differently I can’t charge by the foot. I never have.
I also take into play the location of the fence. If it’s in the backyard and also how far am I going to have to go to unload materials and how far will I have to go to pick up the old fence labor and all that come into play.
You get it!
I tell contractors if you don't have profit margins just go work for someone, stop giving your work out for free or cost I tell them your red flags are can you pay your bills or not doing what you do ,and alot of them don't know about charging for labor time and materials they have slot of work but they are always broke cash strapped,
Its very sad seeing busy broke contractors here in new Mexico
Every single job is different, every house is different, so anybody who has standard pricing must be charging the most to make up for the differences.
Agreed
I've never ever seen a fence next to a fence like that haha
People want what people want. 🤷♂️
DAmn right.
Here here!
I do Demo work for a living. And some of our other estimators want to always bid jobs by the square foot, I’ve tried explaining to them the reasons why you can’t do that. But there are a lot older than me and they never wanna listen. I get the old. This is how I’ve always done it argument. Next time we have this conversation, I’m gonna tell them that their pricing like a socialist. That might make them reconsider. 😂
👍
👍
😂😂😂 nice bro
Out here killing it 😉
Don't hate what others charge or how they go about it. We do what we do in a free America!
Nobody is hating here. Charge what you want but the math doesn't lie when it comes to your break even. That number will vary from company to company.
I wanted to install small manufacturing of pvc vinyl siding wall panel or pvc window and door manufacturing plant in usa or canada .
I have sources of all these machines .
Anyone guide me this business run will or not.
Anyone interest in this business
We stick to Fence so if you ever want to get involved in vinyl extrusions for the fence industry, we can talk
This has to be eastern WA?
Wyoming
Wyoming
I get the vibe this is going to be a great video, genuinely! So I'll leave a thumbs up for sure... I chose not to watch the video though because of the turnoff I got from the thumbnail, you say stop pricing like a "socialist". I think this is one of the biggest problems with politics, is people who try to separate themselves from one another via which political team they are on instead of focusing more on the issue or topic at hand. Just not a fan at all of when people try to inject political team nonsense into the marketing of their business. I think that's a bad look and perpetuates the problem. I'm here for the contractor knowledge, not political views. Good luck to you though! Maybe come back around and watch some videos another time.
The term that’s what I’m trying to describe very well. I’m sorry you’re turned off by that but I always try to be true to who I am and the message I’m trying to get out. Cheers 🍻
Ya got fished hooked
I price each job and then throw an extra $1k on top just cause I want to make an extra $1k
At the end of the day the goal is profit so if you get the profit you want 👊
Pricing by the foot is just fine as long as you have modifiers for different conditions. ¯\_(ツ)_/¯
By the time you have a modifier for every variable it’s just as easy to build the job for what it is every time. Additionally, most people don’t have modifiers for different conditions. Things to consider: length of job, so I conditions, Fenceline obstructions, tree roots, rocks, utilities, temporary pet containment, distance from the shop, and the list goes on.
@@SuccessfulContractor The front end work is the exact same whether your modifiers are per foot or per item, but you're definitely right about most companies not having the proper modifiers top begin with. There should only be a handful of modifiers in each area, though. In Central Texas, half of our revenue comes from sight unseen online sales at our base price per foot + demo price per foot + gates per unit, with the understanding that we'll visit the job site prior to installation and adjust the total for things like actual measured footage, fence line obstructions/risks, and grade/layout considerations. With properly communicated expectations about how those things may alter the project costs, a client understands what those rates are before accepting the contract and there shouldn't be problems adding to the total after the site visit.
As far as digging conditions go, charging for "hard" digging is a tough sell for new companies, so it's probably best to pay your installers under the assumption that every job will have some hard digging instead of trying to prove it was hard to your client. To be fair, there is no easy digging in the Texas hill country, and augers don't work 90% of the time, so we hand dig almost every job with full-size jackhammers.
Chanpagne tastes and beer budget
The fact that you have to make a video about this….
So happy I don't live in that neck of the world. No trees no mountains
Trust me there’s plenty of trees and mountains just not right here.
The Ole price per foot race to zero.
👆🏻 This 👆🏻
Says the fence is about 400 feet long . Ok
It is 400 feet long if you turn the corner. The piece you’re looking at is not the entirety of I was referring to.
Why do fence guys rivet their name to someone's new fence? Everywhere. I am a carpenter and I dont stamp my Logo on a clients new cabinets.
Time honored tradition I guess.
I don’t like socialism!
YEAH FUCK SOCIAL SECURITY AND MEDICARE! I LOVE MY INSURANCE COMPANY DICTATING MY HEALTHCARE DECISIONS! SOCIALISM SUCKS!
@@EternalGaze8 Tell me what it means then. If social security and medicare aren't socialism then I don't know what is. Social Security is the government taking your money from your check while you're of working age and putting it into a "trust" and then paying it back when you are 62.5. I just love the stupid "Socialism sucks" people while they gladly take their social security checks after they retire and receive healthcare when they're old. Either it sucks and we privatize everything or we accept that it has good parts and have a mixture. No serious person is calling for all out communism.
Think you got socialism and communism confused lol
The more I hear about socialism, the more I hate it
@@HockeyTownHooligan5being forced into these programs by the government seems pretty socialists. Or would you call it fascistic?. Now tell me your definition that justifies your belief system
W thunbnail
Ok
@@SuccessfulContractor L reply
No shit. If you dont like the price than obviously they are bad customers.
If I "don't like the price"? Did you mean if "they don't like the price". If I'm the bidder I would hope I'm ok with the price. Sorry I'm a little confused by your comment.
You can't "charge like a Socialist". Socialism is a redistribution of wealth, not lack thereof e.g. I would only be making less because I'm paying my employees more. I still charge the same amount. Just to avoid any misconceptions as many Americans are confused. Great video though.
Yes you can charge like a socialist. Socialism expects equal outcome and that’s exactly what you’re doing when you charge one customer too little and another customer too much. The customer with a large job is subsidising the customer with the small job. It is very much re-distributive.
It's a fish hook
wait a 40 year old with 50 years of experience? either you've aged damn well or i miss understood lol
Don't miss the word "combined." Combined, Luke and I have 50+ years of experience together.
@@SuccessfulContractor Gotcha!! my misunderstanding but none the less this is very helpful especially with me being a new apprentice
Hire enough guys and you can have as many years of experience as you need to sound impressive.
If your not going to make decent money may as well stay home.
So true!!
Socialists would charge high and pay all their employees and equal cut of all profits. This would create a workforce that is efficient and proud of what they do...
I understand what you're trying to say but the Americanized understanding of socialism is quite skewed...
Well said!
You'll pardon us for differing but this would create a workforce that is unmotivated and unincentivized. We deeply believe in rewarding our team members and being loyal to them, but who goes the extra mile? The guy that gets recognized for his ingenuity and effort and gets rewarded accordingly? Or the guy that knows everyone gets equal reward whether you put in your all or not? And if the boss is getting compensated at the same rate as the team member why should he go to all the extra trouble of shouldering all that responsibility and work? Is he just going to do it out of the goodness of his heart? No, people deserve to get compensated based on their effort, quality of work, and responsibility. Socialism is based on the selfish assumption that "I should have more" and "I want what he has". You do what he did and you can have what he has, that's how it works. No one is going to give it to you, except those that have taken it away from someone else.
Socialism is the grand experiment that has failed over and over yet history keeps trying to get right. And while it masquerades as a compassionate system, it is really a shortchanger and a thief.
Wasting your time. Socialism is an American swear word twisted to mean Communist. They have been sold a lie that everyone is in control of their own fate. That guy there who has nothing, he just didn't work hard enough and all your problems could be solved if you just worked harder. You too could be rich like me, just keep working. Americans pretend socialism fails everywhere and their way is best, yet America has the worst Health care of first world nations, received next to no support during covid, has the highest incarceration rate and invented terms like school lunch debt and class shooter drills that just don't exist anywhere else in the world. The American credo "Fuck you, I got mine."
Name a socialist country that is exactly as you describe.
Bro just charge extra line items for challenges. Literally just get xactimate or a similar program because there are add-ons for literally everything. If you are implying that people don't itemize and separate the process when estimating then they should quit contracting because that is beyond negligent.
Not what I’m saying. Most people price by the foot because they are lazy and don’t realize the damage they can do to their business profitability.
?
🤷🏼♂️
you can be a socialist charge your worth and not undercut yourself. so the title is misleading but great advice in there
Honest question; How many socialist estimators have you or anyone met? I am at zero.
They all seem pretty capitalistic to me. It is with the company owners that can be the socialist when we try and simplify the process to far.
@@SuccessfulContractor I think your definition or meaning of socialist may be different than the accepted.
I guess I am referring to the fact that one group is subsidizing the other to make equal outcome ie. same price per foot regarless of size and site conditions rather than having a merit based system where the job is bid for its complexities.
is socialism bad Haha
If you are worth a hoot it is! If you suck, maybe not.
@@SuccessfulContractor We are CAPITALists through and through. Thanks for the video. I have a communications and security company and this mindset is really going to help out.
Stop pricing like Socialist. Hell gas food and rent a good example. Get that money!
That would be an example of capitalism, not socialism.
You Americans, always confusing capitalism and socialism.
Not at all.
@@SuccessfulContractor then explain the differences, because what you described was capitalism.