I’m retired and working in a large orange big box store, millwork department. I have many contractor customers who only work by word of mouth, do not ever advertise and are booked many months ahead. Folks will pay top dollar for good quality, honest work from skilled craftsmen/craftswomen.
I'm the version of you that did the auto mechanic/ parts store route. If you are a half way decent mechanic who treats people right, people will pay. They will line up, wait a month, yes sir no sir and be happy if you only slightly over charge them. Us in the biz don't live in the same world they do. We are scarce wizards. I'm a mildly decent parts changer and people think I'm friggin Norm Abrams over here.
Well said Michael. 36 years as a carpenter and I've never advertised or have been on any social media. Feel blessed for that as advertising can invite alot of wasted time with tire kickers that never end up doing anything to their homes.
I just started a remodeling business 1 year ago next month. Became a licensed and insured homebuilder in Alabama and man I couldn’t possibly agree with you more. Manage expectations, Under promise, over deliver, and just work like God’s word tells me to. Diligently, patiently, and honestly glorifying Him through my work is what I try my best to do every day. This video just made me smile, full of wisdom and inspiration together.
Amen David! Couldn't agree with your comments more. This is the secret to success, glorify our Heavenly Father and everything we do. We're working on God's house!
Advice/suggestions from experienced pro's like yourself is very valuable. Passing that on to the younger generations to hopefully improve their experiences is very thoughtful. Thank you
Wow an experienced guy coming on RUclips to provide good old fashioned way of providing insight instead and these overnight 20 yr old experts is nice for a change. Thanks for coming on RUclips!
“Bidding on a worst case scenario…” this is GOLD! It doesn’t mean things will go poorly, it means I’m prepared to address the unexpected that I often encounter and do that “extra mile” I always want for my clients.
I think you need to be getting about 60% of your bids if your prices are right and probably need to run away from 25% of your interested customers. I bid for 50% profit, im able to charge less in the end when things go well. Keeps me from working for free and much of the time the final bill is less than the estimate. The only mad customer l ever had was 1 i didn't end up working for. If you do work, behave like God is watching because he is you can make a good living and always have more work than you can do. Two things you can't ever do is charge more than the estimate or go hat in hand asking for more money after the fact or do bad work. Those 2 things will ruin your reputation. So take the L and bid more next time because you can't forsee all the problems. It's like combat, once the first shot is fired the plans change quickly.
If you're not willing to charge your client higher than your estimate, you shouldn't be charging less. You're effectively working on a fixed price contract, but only when it benefits your client.
I agree with Dave. You shouldn’t have to eat the extra cost when you rip open a wall and find the mold or the leaks or whatever you could not reasonably have been expected to anticipate. But you can have laid the groundwork with your client that you will need to charge more if something like this happens.
@rangerousdave I give a very detailed estimate of what I'm going to do, what I'm not going to do and what ifs, when the money is due and final payments and whats expected of both parties. I learned my lessons but I never go and ask for more money on things that aren't covered in my estimate.
Coming from the other side of the table as a project manager in heavy industry who gets bids, I thought I share my opinion on this subject in hope it will be useful; You hit the nail on the head that what separates the contractors who's bids I accept that aren't the lowest is they all include better value and service. Understanding what your perspective client needs are can easily make a bid that more expensive the "best bid." The best example of this I have is that most of my contractors still don't comprehend how much downtime cost me as project manager. Doing a bad job on a project that results in me having to take that unit or system down to fix a mistake can easily cost multiples of the entire project budget, not just that specific contractors portion. If your bid can give me more confidence that won't happen it's more likely to get accepted. The other thing that drives me up a wall right now is scheduling. I recently switched my primary electrical contractor not because their work was poor, but because they always changed their work schedule around last minute making it extremely difficult to support them. My new contractor is more expense, but as a project manager, it well worth my own sanity to not have a contractor acting unpredictably.
i'm 90% sure they left in camera audio on the right with the lavalier on the left@@sterlinghearth6672 so it has the delay (speed of sound + digital radio transmission processing) between the two leading the listener to feel the sound is coming from everywhere at once instead of front and centre
I am retired after 47 years in construction contract management and construction inspection. I enjoy your talks on contracting and the importance of contracts (with round numbers thrown in sometimes). Every time you do one of these videos my mind explodes with memories of construction contracts, contractors, change orders, special provisions, proposing contracts to clients, etc. I have dealt with during my career. I was fortunate to have had the opportunity to experience both of contracting management (75%) and being a contractor (25%). I wish I could online shout an "amen" when you touch on many of the things I feel are so important in the business of construction. It is amazing how few truly understand the process, but still dive headfirst into a project and get hurt. Thanks.
You are so relatable. Everything you say about contracting is on par. I’m 49 years old and have only recently learned I need to interview my homeowners. Not them just interview me. Not all personalities work out. Thank you for your wisdom i’m headed in the right direction.
Scott, you've hit the nail on the head, as usual. I'm about 2 years into part time handyman work (19 years old), and everything that you said has happened to me, some more than once. I am quickly learning the importance of learning how to read potential customers before signing any documents with them, in attempts to have less headaches later on. I have also learned that pricing should almost always be a little higher than what you estimate. The 'best case scenario' comment really is true! Thanks for all of your great videos, EC.
Many years ago an old CM told me that the best way to make money on a project is to start on time and finish ahead of time. I find getting as many items firmly quoted for, pricing as per the specification (and not a cheaper alternative), working with good subcontractors (and not forgetting to put some mark up on their quotes), keeping good site records and getting any extra work agreed in an email (either as an 'AI' instruction from the Architect or site instruction from the client) and then breaking down as far as possible any extra works (outside of the contracted works) so that the client knows exactly what they are getting (or if need be so that they can change their minds), as well as any extra time onsite required, helps with keeping on top of costs. Another good one is checking leadtimes and availability on non-standard items and getting them ordered early helps with the finishing on time!
Your reference to that article on various strategies for markup percentages in the Journal of Light Construction was good!. I printed it out some months ago and went over it with a yellow marker pen as if I were still in college and needed to really, really study it! The general economy of this country is as dynamic as the planet itself and doing bids usually feeIs like a guessing game...but as a remodeling contractor I have found it to be true and ironic that the customers who have less income appreciate my efforts more and will pay what I bid without whining. Thanks,and keep up the good presentations and I'll try to keep up the good work😎
Look up “bulletproof handyman” if you haven’t already. I’m a specialty contractor but I still get value from some of the things he says. I think you will get something out of the channel too
I started out mine about 2 years ago. One thing I learned is to be deligent in making sure you cover everything in your estimate and add extra for profit and something bad situation. You will be tempted to add on little things here and there by the clients request and they expect to be free or cheap since you're already at it, that's where you will begin to lose your money and time. Be clear and tell them that you will run the estimate and get back to them. Don't do it on the spot.
Thanks Scott! I loved this. I really needed to hear this today. I’ve been struggling with charging enough for 15 years! I’m better than I used to be but I think this encouragement just might put me over the hump. It really is hard for a craftsman to no the true value of his work. Thanks again and God Bless you my friend!
Admittedly I have committed most of the sins you mentioned on my current project. I absolutely have to stop deciding what "Expensive" means to my clients. You nailed it when you said we undervalue our work because it's easy to us. I'm not a builder im a remodeling contractor and I've lost my shirt in this current project, but I'll get through it. I'll take all the knowledge I've gained and won't make the same mistakes again. Thank you for sharing your wealth of knowledge, I hope to be half the contractor you are one day.
I know the feeling, I've done that to myself a few times. I just grind through it and learn my lesson. Not sure how long you've been on your own, but I learned the only way to survive is I must include overhead on top of the project total before quoting.
I'm just learning of how to bid jobs. I'm mostly in light excavation work with minimal material usage. It is mostly time and equipment. Thank you for the advice!
LOL! “Recomend one of your competitors so that client can rope them into all the call backs.” LOL! But TRUE! This advice applies to so many other fields and life! You re great at summarizing and delivering true gems of wisdom.
Started up my own concrete form and laying company after 15 years in the game. and just took on a project and the rates looked good at the start but not so much now.
I work in IT now but have been many things. I have run a fleet of logistic trucks, had a removals business and now I have a landscaping business on the side and of them all, we're all tradies at the end of the day and costing up jobs is the same. I loved your explanation of the "psychological" side of quoting. It's the same whatever business I've been in and true, it is hard to learn and appreciate your value beyond what you would pay. My mantra has always been "under promise and over deliver" but I see too many blank faces when I preach this. The most common thing that comes up is "manage expectations" and I feel I always understood what that meant but breaking it down into two separate parts "remove uncertainty and clearly communicate the vision" is all I need to now motivate my team. Thank you for what you do and keep up the good work
As a contractor in an area that is struggling to have enough of us that can do the work. I have built a reputation as someone worth waiting for, currently with a 4 yr waiting list... and here I am struggling to add 10% and justifying it... thank you for reassuring my decision to at least start adding fees. up to this point I have only done the T&M.
This is really hit home for me. I always looked at best case scenario when bidding, so that will change starting "today". Thanks Scott !!!! for this video.
I'm 26 from California. I used to feel bad for charging quite a bit for my services as a young general contractor bc some things seemed real easy to me. I did the mistake of charging cheap sometimes until I really learned to value my work and body. Construction is hard. Wears your body out. Charge for it but be fair! Tik-tokers and influencers, (whatever that means) make lots of money which is easy today, yes..but in the future who will call the plumber, electrician, painter, etc? Value your labor.
I very rarely get bids anymore. I’ve been doing electrical work for 12 years and 90% of my customers just asked me for a ballpark price and tell me to do it. I am pretty comfortable with the price so I feel I’m making enough money it works out for everyone.
THANK YOU! This was AWESOME! I’ve been swinging a hammer for 30 years in southern New England. Over 20 of those years have been self employed. The head trash and ignorance of what things cost that we all bring to the table in some form or another really makes life miserable. I grew up in a generationally poor area. So the ideas about money I had really hurt me. The thing that unlocked my mind about what to cost was the epiphany I had of”what would it cost for me to bring my absolute a game to every project and every aspect of what I do?” “What would it cost for me to smile at every unforeseen obstacle?” I also realized that I HAVE A RIGHT TO EARN A LIVING! Second thing that changed my life was finding The Contractor Fight and learning their sales format called The Shinfu. Like you said it’s all about asking specific questions, shutting up, and deeply listening to what is important to that customer and deciding if those things align with what’s important to you. Learning to communicate better has been everything.
I’m glad you brought up overhead. I actually add up all my annual overhead costs and divide by 2,080 (annual working hours). This gives me my overhead hourly rate which I add to all of my estimates. I usually just have one line item for the total project cost that I give to my clients but I have a very detailed excel spreadsheet for how I arrived at that number.
Asking for enough money is one of the hardest things to do. Also being able to communicate with the client about what they want vs what is possible is another major thing as well. Lately I have just been upping my hourly rate on each job and telling my current clients about what I am doing. It helps them realize that I know I am worth more and that they are receiving a limited time offer. Pricing jobs drove me nuts. I always forgot about details and always priced based on how I do on my best days.
This is 💯 the truth. Such valuable words of wisdom ec . Words not spoken by many people. I entered into the world of construction 13 years ago working alongside my father who has been in the business for 30 plus years. And this is exactly what we have learned over the years. Thanks for videos. I really do enjoy them
Can't wait to see you and Matt on a video (or maybe you and Kyle). I hope it happens someday. Makes me think of that old joke about the old bull and young bull standing on a hill :)
I did the same, with the exception of repeat customers who already know my worth. Total game changer, and now I have time to do the work for my favorite clients, and time with the family at the end of the day instead of giving someone my free time at dinner hour.
Scott, your experience and wisdom from all the years in the trade is invaluable. As a mason when I started out, I did far too many "side jobs" for next to nothing, believing I was doing the Owner a favor. Only to watch them sell the property and reap the rewards from my labor. I was terrible at pricing my jobs and ultimately worked for others rather than myself. There's a song from our past: "I wish that I knew what I know now When I was younger I wish that I knew what I know now When I was stronger" Hopefully the younger guys and gals are seeing what you are teaching - I wish there was someone around like you when I was doing those jobs... but we all live an learn. "Keep up the good work"
I do shared your experience and it is a terrible feeling at the end of the day where you know you didn't make as much as what you should get. It's a discouragement for sure but live and learn and grow. Learn to say no is a step too.
I paused this video at 11:48 because the subject rather reminds me of that hilarious comedy "The Money Pit", starring Tom Hanks and Shelly Long. The crew they hired to refurbish their classic, old home was a motley bunch who seemed better at demo than actual building. best lines: (paraphrased) "How much longer until you're done?" and "Two weeks!" I strongly suggest watching this flick if you haven't, already. (Or re-watch it!)
As a remodeling general contractor who works in homes that are 100+ years old 90% of the time, we provide estimates rather than hard quotes and do our work on a cost plus basis. We build in the overhead and profit in the hourly rates, and most of the time we are within 10% of the estimated price barring changes of scope (which happen all the time- once someone has a competent contractor in their home they don't want to let go of them). The biggest problem we have related to that is what it does to our schedule; when we have someone add a ton of work to the plate it can really wreak havoc with customers who are waiting for us to start the project. This is one reason we won't take deposits until a week or so before I KNOW we are going to start the project. Of course, when cabinets are already ordered etc. that changes the game so we make it happen no matter what.
pricing tree work after the storm yesterday in NC, i think you all should come here and start a tree service. some competition would get the prices down!!
Can you do a video from the other perspective; how can a customer/client pick the right contractor? Also, what behaviors should a customer/client avoid and/or irritates contractors?
Communicate what you want as early as possible. Try not to change your mind 25 times throughout the course of a project. Pay promptly. Contractors want to get it right the first time just as much as you do.
The instructor at the contracting school I went to said “figure your materials and double it, figure your labor and triple it”. I could never go that far, but that P&O percentage you speak of can make or break you.
Very appropriate "big picture" discussion. A little short on specifics, but a good start. The first topic, finding good clients. Less experienced GC's might not have that list of questions that identify the "20%". So were do they find that list and how should they ask without alienating the potential client their interviewing. This may be obvious to an experienced operator but not so to those less seasoned practicioners. After all GC,s are trained crafts people not counselors. The answers would make a good topic for another separate video.
Just a quick word on change orders, always get them signed. I always signed my own when I had the contractor sign it and that way everyone was on the same page and agreed to what needed to be done. As a side note to a change order, make sure that you write in it exactly what you are going to do including who pays for material and the labor to complete the job. I’ve seen jobs where the amount of money the change orders cost exceeded the cost of the original contract so make sure you get them signed and keep them filed in a orderly manner.
I build IT systems. The idea is to build long term relationships. I have contracts that have been running for years with just change order after change order. The core contract has been done for years. Often, a new contract takes way too much time and paperwork. A change order might only take a local managers sign off, not involving several corporate depts. The government calls them indefinite quantity / indefinite delivery contracts. They are a beautiful thing if you actually serve your customer well.
Some contractors,will intentionally bid lower on jobs, bomb w/ change orders that wind up sometimes really hammer ing project cost. Calculating insane profit for them. Instead of including there nominal margins w/ original bid. I call it predatory bidding because they victimize clients delays,or plain job progression ceased until they uuhmmm, correct issues. Which in turn puts trades behind. There are legitimate offsets on projects that may not forseen or correctly planned, installed.lnspectors definitions of what is & not acceptable.very broad brushstrokes for them. Jurisdictions Remember code is absolutely minimum requirement in that particular area what ✅ here may not there. Some time you have to give them the knowledge that's holding up your part of job. The scouts teaching scout master how to start a fire so you can get merit badge. 43 yes. in const. seen a lot of WOW moments of being impressed & disbelief
@@kelturner5452, You are absolutely correct, I thought about including the fact that some contractors will low ball a bid, sometimes under costs and then once they have the job and are building it will start saying “That’s not my job” to all different aspects of the contract. They’ll come with their hands full of change orders, this is one of the problems with government contracts, where low bid wins. The other commenter here Bill_N_ATX, makes a very valid point, Build long term relationships, this is what you want to aspire to, when contractors just call you to do a job you haven’t even bid on. They call because you do good work, on time, and you end up doing all their work. You know what you’re getting with them and they know what they’re getting with you, jobs get done and everyone makes some money. Just don’t get greedy on them, if you lose some money on a job, you know you’ll get more jobs with these long term relationships. Good luck out there and be careful!
Just adding another thank you. Thank you for sharing your valuable experience. Many contractors of your generation have not done a great job when it comes to mentorship. This is certainly actionable insight as well as encouragement at just the right time. I am three years into my GC journey in a very tough market (South Florida), learning every single day.
Your closing statements are spot-on. (See my prior statements, below). There's no such things as being "over-prepared" or paying yourself what you know you're worth, Love these videos!
The comment about “if you’re getting 100% of the jobs you bid, you’re not charging enough” is gold. I used to tell a former employer this all the time. They would scoff at my comments and act like I didn’t know what I was talking about. They would get most of the jobs they bid and we would go over budget on most of them. They were betting on best case scenario which is rarely the case. I left that company a few years ago and they seem to be faltering to this day.
Priceless advice, thanks. In the UK we have a “can you just” note pad for calculating extras in. Amazing how many customers expect extras for free. Although if they don’t, & the job goes well, invoicing less than the quote makes for a happy customer & gets you recommended.
Thanks for a good video. As a subcontractor (excavation), my bids and estimates are so much easier… but I still hate doing them. I try and do time and materials whenever possible, it seems it is always the cheapest option for the client and I don’t have to worry about change orders. Although, I see I might not be fully managing the uncertainty. I have always struggled with charging the full amount. I also don’t have relationships with competitors- which would be really good when I turn down work (mostly due to an already full schedule). I’ll have to work on those. For newbies- If you’re the lowest bid, that’s not bad. When you don’t have referrals or equal experience, having a low bid is a great way to start getting work… but when the schedule gets busy, move up the rate as appropriate.
Something about what you said reminds me to an line of Scotty in Star Trek in Star Trek Next Generation Session 6 Episode 04, "Relics", What it takes to be thought of as a miracle worker. Scotty explained that to Kirk in one of the Star Trek movies; I think it was Scotty took the time estimate and multiplied it by a factor of four, but he was dealing with Captain Kirk, who halved the time frames.
It’s like you’ve been watching me write up my quotes! I tend to do higher end work for wealthy clients in the counties outside of London. I’m forever under pricing jobs. All too often because I’ve gone off best case scenario
I have had signed contracts unpaid at the end. even with the threat of litigation. A lawyer buddy helped me with a few, and said the game is, if the debt is 10-15k or less, you will spend more fighting to get it back. Even then you may not get paid.
I needed my roof done recently. Got several bids all over the place. Took the lowest bid and got a great job done. Completely satisfied. Just because someone bids high doesn't mean they will do the best job.
@@GuldeScott No clue if roofer I used makes enough to not work during winter. All that I know and all I care about is that I got a fine roof at about half of what other roofers wanted.
At just under 10yrs in as an electrical contractor, I am just now learning that most customers respond better when you are up front and honest about the costs. I have always been hesitant to tell them how much it was really going to cost, afraid that I would lose the job if I was too high. I get more jobs now just telling them how high it's actually going to be. Also, customers are forever grateful if you overbid and then charge them less. Do the right thing and if a job went silky smooth then cut the customer a break. It'll come back to you in future business and referrals!
One way to look at it is, the people I want to work with are the ones that know the lowest bid is usually for crap quality or by someone that doesn’t value their own work. The part where he said refer bad clients to your competitors says it all haha good riddance if you’re into low balling
As a homeowner, I say keep your prices reasonable, with everyone charging so much it has led me to RUclips to learn how to do everything myself which I would have been fine paying someone to do had the prices been reasonable. For example got a quote to clean my carpet one guy 3,000 other guy $270 I went with the smaller number and he did a wonderful job, but my next step before I found a better price was can I find a used steam cleaner and do it myself. Keep your prices fair or you are going to create a bunch of DIYers which can also lead to competition.
As a contractor I say you are the exact kind of client I stay away from. 😂 Do I dislike DIY’ers? No, I think that learning how to do things yourself is really cool, but, if that is your inclination, if you would rather spend your free time, basically your overtime, the time you would get paid time and a half on your job, to do your own construction work, then you dont, won’t? value my time and my time, even more so than my skill, is what is my most valuable commodity and what I have for sale. In actual practice when a potential client starts talking about “reasonable” prices I’m headed for the door. Just saying
@@akbmunsell Just so you know even though I would rather do my own work than pay someone a ridiculous price, I do in fact value their time I just value what’s left in my account more than their time. And if you needed work done on your house, you’re going to pay someone else to do it so you can make more money on a job? Also when you need a subcontractor, you as a contractor know what a job should cost to be done and if a guy is charging way over what it should be are you going to use him because you value his time and skill or are you going to use the guy that’s not being greedy who is just as skilled?
@@probuilder961 So if a guy try’s his hand at construction due to high prices, realizes he’s actually good at it and hones his craft and starts his own construction company, he’s now your competitor. In my part of the US a guy only has to answer his phone and clean up after he’s done and he would take the jobs from guys doing construction for years longer than him. I grew up in a construction family and sadly I decided to go a different direction, but it’s hard to find someone that does quality work especially on what you can’t see. I bought a manufactured home, previous owner had mice and didn’t know how they were getting in, long story short the plumber didn’t seal any of the holes that were going into the house, why because you couldn’t see it, only reason I saw was because I upgraded to pex.
Great video EC! Your words apply to any industry. When you feel like you are in a race to the bottom, chances are your biggest competition is yourself. I’d also like to add that the importance of factoring your depreciation on the equipment being used can be overlooked or under estimated quite often - equipment wears out and it isn’t getting any cheaper to maintain or replace.
Sound advice. I'm retired now but I underpriced my work just to get a toehold in the biz. It did get me some work. Small stuff. I was afraid of Remodeling because of the potential for bad surprises. A good friend got burned for $20,000 by a customer who directed lots of extra work but refused to pay for. He was too trusting and lost in court. I've turned away a few. Just threw them a high price. I wish I had priced my work better from the start.
In my business. I find it very difficult. Most will love the race to the bottom game. I have found that pricing usually isn’t the issue. Its the people you are trying to serve. The right people will pay your price period!
Thank you Scott! This is the type of content that is so hard to find but is genuinely life changing. I can mill a board any which way in my sleep but I struggle so much with 'the business end of the stick. If you or anyone else had some suggested reading on the topic I would appreciate it, and would surely pass on any knowledge I could glean from it.
Well, you know, ... there are some of the more experienced Contractors who simply refuse to work on a fixed bid basis. These "time & materials" guys don't get themselves into those no-win situations. But, of course, they also have to be willing to pass on a LOT of jobs. But THAT'S A GOOD THING, if the alternative is to work for nothing. And the time spent working-up all the info on a job has to be covered by the overhead, too. Personally, ... here in Southeastern Pennsylvania, ... ( where you are often bidding against Amish crews, with their unique overhead situation ) I've found that a deceptively simple formula ( materials X 3 ) will get you just as close as any other, without all the HOURS of paperwork.
I encourage my contractor friends often that even the Bible agrees with this mindset. 1 Timothy 5:18 says "The laborer deserves his wages." Great video, appreciate the practical advice!
Excellent advice, I spent 20 years in roofing, and building houses and the other trades during the winter time in Iowa, roofing was the best here is the price $ what color do you want 🤔 that was pretty much the extent of the conversation, I miss those days 99% of the time I got the job, it was all about reputation and a fair price. Now I am 49 and doing Windows and siding -house additions - etc. I would say half of my work the people don’t even ask me for a price any more. now I have to put up with little old ladies telling me about their aunts cousins sister‘s boyfriends moms sister changing their wall color that they don’t approve of. Even at $60 an hour I can’t handle it, My advice would be to pick out one trade and be a true (craftsman) /professional at it. And do something unusual in this line of work be humble!!
In sizing up customers, here's my advice. Never work for someone over 45 who has more than three cats. Never work for a couple who are restoring an old house in an attempt to "strenghten" their relationship. And never work for an architect on their own home! Full disclosure, I did violate #3 and it turned out alright.
I've never been a general contractor, or any kind of building trades contractor, but my software development career included a good bit of contractor time, so some of this applies. On the first issue, I did a modified version of that. If I felt that a client was going to be more hassle than usual, I simply set a higher pay rate. I didn't want to close the door *completely*, but wanted to be sure it was worth my time. One client in particular, I'd worked for three times, and they were consistently an awful shop. I set a substantially higher rate for them than my usual, and that plan worked. They didn't bring me on again after the third time. I did good work for them, and they appreciated it, but other aspects of the situation just made it demand more pay. My third time with them was the highest charge rate I ever had. As expected, a lot of what Scott said applies well outside the building trades.
@@floodo1 Mostly, the work found me, as I'd already built a reputation in the industry, and particularly in my fairly narrow niche. I *tried* finding new work at times, but that never seemed to go anywhere. In one case, I found where someone was trying to hire a bunch of hourly workers for something where I knew I could build tools that would greatly increase such workers' production rate, so they could pay me a bit to build the tools, then save a lot more than that on reduced manpower to get the work done. I described that to the hiring manager, with references to my prior work, but didn't get any response. As for what I disliked about contract work, the big thing is the unreliability. When you're between contracts, you may have no idea when the next one will be available. That depends a bit on your particular field. Mine was narrow enough that jobs came up infrequently, though when they did, very few people were qualified to do them. So if you need a steady income, that could be a problem. OTOH, once you get started contracting, you can stuff away a lot of money, living way below your income, and have that to fall back on while between contracts. The irregularity can also mean that you're just about to go on a trip, and get notice that someone wants you to do some work for them. Sure, you could turn down the work, or delay until after your return, but if you want a better reputation, you put your plans on hold and do the new contract. The second-worst thing about contracting is paying taxes. You have to pay taxes quarterly, *estimating* what you'll earn over the course of the year. You definitely don't want to underestimate, and send too little money in. AIUI (talk to a qualified tax attorney), even if you make all your money in the second half of the year, you need to send in taxes for the first two quarters as well.
Oh, one more thing about the taxes. When you're a W2 employee, the federal government lies to you about how much of your income you're paying in "payroll taxes", the income taxes that they don't want to admit are federal income taxes. Half of those are paid by your employer, on your behalf. But your employer isn't paying that out of the goodness of their hearts, and if you're contract (1099), they won't pay it. So instead, the feds require you to pay that "other half" yourself. You need to consider that when you set your rates.
@@BruceS42 lol they make you pay "the other half" because that is the medicare and social security portion it is folley to go into business as a contractor without understanding basic tax law imo. Many people do it but at their own peril
@@floodo1 It looks like you misunderstand. Social Security and Medicare taxes ("payroll tax") are, for W-2 employees, split into two halves. One is deducted from the employee's paycheck, and you'll see those line items. The other half is paid by the employer, but of course they see it is part of the cost of employing you. This is a sort of scam, to make it look like those taxes are half what they really are. When you do 1099 work, the scam is revealed, and you have to pay that hidden tax yourself.
Sounds like the camera audio and the mic are in the video giving the echo. Not too bad but just a heads up. Love the content and trust you above other youtube builders!
My biggest tip I can offer to people is put your work on RUclips. If people can actually see the high quality work that you are doing they will be more inclined to pay for it.
Back in my early 20s (I'm 68 now), I took my confidence in my mastery of using a hammer and a circular saw to mean I could "break into the business" of contracting. I read up on some business-related stuff and boldly stepped forward into the unknown. Inside a year I was brutally taught that I certainly had no business in this business! The business stuff I read was the wrong stuff. I never sought guidance from a seasoned pro (looking back, my audacity was a fool's errand. Thinking I might be the next "bumbling dummy to stumble into mega-success"! Some years later I learned to chuckle about that. Now I belly-laugh about it!). Rule 1: know the BUSINESS of business first! Rule 2: know it from a successful "guru" of the craft. Or crash and burn like I did.
EXACTLY the right advice at the right time!!! Thanks Scott for all that you’ve done here and for all that you’re doing SO VERY HELPFUL and uplifting From another Oregon Scott 😀
Recently found your channel and thank you for all the wisdom! I am an Arborist and have asked people for years why does everything take longer than it should? And especially if the boss isn’t around?!? Ps I want one of those hammers
![Blox Fruits Dragon Rework Update [Full Stream]](http://i.ytimg.com/vi/EqDAp8udhm0/mqdefault.jpg)
I’m retired and working in a large orange big box store, millwork department. I have many contractor customers who only work by word of mouth, do not ever advertise and are booked many months ahead. Folks will pay top dollar for good quality, honest work from skilled craftsmen/craftswomen.
I'm the version of you that did the auto mechanic/ parts store route. If you are a half way decent mechanic who treats people right, people will pay. They will line up, wait a month, yes sir no sir and be happy if you only slightly over charge them. Us in the biz don't live in the same world they do. We are scarce wizards. I'm a mildly decent parts changer and people think I'm friggin Norm Abrams over here.
Well said Michael. 36 years as a carpenter and I've never advertised or have been on any social media. Feel blessed for that as advertising can invite alot of wasted time with tire kickers that never end up doing anything to their homes.
I just started a remodeling business 1 year ago next month. Became a licensed and insured homebuilder in Alabama and man I couldn’t possibly agree with you more. Manage expectations, Under promise, over deliver, and just work like God’s word tells me to. Diligently, patiently, and honestly glorifying Him through my work is what I try my best to do every day.
This video just made me smile, full of wisdom and inspiration together.
Cool, I am a carpenter in Alabama as well looking to get a homebuilder license myself.
Amen David! Couldn't agree with your comments more. This is the secret to success, glorify our Heavenly Father and everything we do. We're working on God's house!
Advice/suggestions from experienced pro's like yourself is very valuable. Passing that on to the younger generations to hopefully improve their experiences is very thoughtful. Thank you
Wow an experienced guy coming on RUclips to provide good old fashioned way of providing insight instead and these overnight 20 yr old experts is nice for a change. Thanks for coming on RUclips!
“Bidding on a worst case scenario…” this is GOLD! It doesn’t mean things will go poorly, it means I’m prepared to address the unexpected that I often encounter and do that “extra mile” I always want for my clients.
I think you need to be getting about 60% of your bids if your prices are right and probably need to run away from 25% of your interested customers. I bid for 50% profit, im able to charge less in the end when things go well. Keeps me from working for free and much of the time the final bill is less than the estimate. The only mad customer l ever had was 1 i didn't end up working for. If you do work, behave like God is watching because he is you can make a good living and always have more work than you can do. Two things you can't ever do is charge more than the estimate or go hat in hand asking for more money after the fact or do bad work. Those 2 things will ruin your reputation. So take the L and bid more next time because you can't forsee all the problems. It's like combat, once the first shot is fired the plans change quickly.
If you're not willing to charge your client higher than your estimate, you shouldn't be charging less. You're effectively working on a fixed price contract, but only when it benefits your client.
I agree with Dave. You shouldn’t have to eat the extra cost when you rip open a wall and find the mold or the leaks or whatever you could not reasonably have been expected to anticipate. But you can have laid the groundwork with your client that you will need to charge more if something like this happens.
Aim for 70-80%
@rangerousdave I give a very detailed estimate of what I'm going to do, what I'm not going to do and what ifs, when the money is due and final payments and whats expected of both parties. I learned my lessons but I never go and ask for more money on things that aren't covered in my estimate.
And charge enough that you can warranty your work with no questions asked, even if you do lose money. Never sell your reputation for $250
Coming from the other side of the table as a project manager in heavy industry who gets bids, I thought I share my opinion on this subject in hope it will be useful;
You hit the nail on the head that what separates the contractors who's bids I accept that aren't the lowest is they all include better value and service. Understanding what your perspective client needs are can easily make a bid that more expensive the "best bid." The best example of this I have is that most of my contractors still don't comprehend how much downtime cost me as project manager. Doing a bad job on a project that results in me having to take that unit or system down to fix a mistake can easily cost multiples of the entire project budget, not just that specific contractors portion. If your bid can give me more confidence that won't happen it's more likely to get accepted.
The other thing that drives me up a wall right now is scheduling. I recently switched my primary electrical contractor not because their work was poor, but because they always changed their work schedule around last minute making it extremely difficult to support them. My new contractor is more expense, but as a project manager, it well worth my own sanity to not have a contractor acting unpredictably.
Audio is funky, but great video and content as always.
“I thought it was a micro dose”
I was looking for this comment, noticed the bad audio right away
@@MrPesht how is there not more comments on this / this isn't +1'd higher?
Sounded like some strange AI voice. Has Scott been cloned?
i'm 90% sure they left in camera audio on the right with the lavalier on the left@@sterlinghearth6672 so it has the delay (speed of sound + digital radio transmission processing) between the two leading the listener to feel the sound is coming from everywhere at once instead of front and centre
I am retired after 47 years in construction contract management and construction inspection. I enjoy your talks on contracting and the importance of contracts (with round numbers thrown in sometimes). Every time you do one of these videos my mind explodes with memories of construction contracts, contractors, change orders, special provisions, proposing contracts to clients, etc. I have dealt with during my career. I was fortunate to have had the opportunity to experience both of contracting management (75%) and being a contractor (25%). I wish I could online shout an "amen" when you touch on many of the things I feel are so important in the business of construction. It is amazing how few truly understand the process, but still dive headfirst into a project and get hurt. Thanks.
We need guy's like you teaching courses, talking on a podcast or write a book.
You are so relatable. Everything you say about contracting is on par. I’m 49 years old and have only recently learned I need to interview my homeowners. Not them just interview me. Not all personalities work out.
Thank you for your wisdom i’m headed in the right direction.
Scott, you've hit the nail on the head, as usual. I'm about 2 years into part time handyman work (19 years old), and everything that you said has happened to me, some more than once. I am quickly learning the importance of learning how to read potential customers before signing any documents with them, in attempts to have less headaches later on. I have also learned that pricing should almost always be a little higher than what you estimate. The 'best case scenario' comment really is true! Thanks for all of your great videos, EC.
Many years ago an old CM told me that the best way to make money on a project is to start on time and finish ahead of time. I find getting as many items firmly quoted for, pricing as per the specification (and not a cheaper alternative), working with good subcontractors (and not forgetting to put some mark up on their quotes), keeping good site records and getting any extra work agreed in an email (either as an 'AI' instruction from the Architect or site instruction from the client) and then breaking down as far as possible any extra works (outside of the contracted works) so that the client knows exactly what they are getting (or if need be so that they can change their minds), as well as any extra time onsite required, helps with keeping on top of costs. Another good one is checking leadtimes and availability on non-standard items and getting them ordered early helps with the finishing on time!
Your reference to that article on various strategies for markup percentages in the Journal of Light Construction was good!. I printed it out some months ago and went over it with a yellow marker pen as if I were still in college and needed to really, really study it! The general economy of this country is as dynamic as the planet itself and doing bids usually feeIs like a guessing game...but as a remodeling contractor I have found it to be true and ironic that the customers who have less income appreciate my efforts more and will pay what I bid without whining.
Thanks,and keep up the good presentations and I'll try to keep up the good work😎
I started a handyman business, and I'm still in my first year. Thanks for the tips and encouragement!
Right there with you brother, put out a good product make a great living
Hey, me too!
Look up “bulletproof handyman” if you haven’t already.
I’m a specialty contractor but I still get value from some of the things he says. I think you will get something out of the channel too
I started out mine about 2 years ago. One thing I learned is to be deligent in making sure you cover everything in your estimate and add extra for profit and something bad situation. You will be tempted to add on little things here and there by the clients request and they expect to be free or cheap since you're already at it, that's where you will begin to lose your money and time. Be clear and tell them that you will run the estimate and get back to them. Don't do it on the spot.
Get it boyz!!🤙🏼
I'm in IT and those sentiments are true there too. I watch because you offer good clear advice and one day I hope to self build my home.
Thanks Scott! I loved this. I really needed to hear this today. I’ve been struggling with charging enough for 15 years! I’m better than I used to be but I think this encouragement just might put me over the hump. It really is hard for a craftsman to no the true value of his work.
Thanks again and God Bless you my friend!
I love this channel so much. And I’m not even in the trades, although I do admire them. So much great wisdom here. Thank you.
Admittedly I have committed most of the sins you mentioned on my current project. I absolutely have to stop deciding what "Expensive" means to my clients. You nailed it when you said we undervalue our work because it's easy to us. I'm not a builder im a remodeling contractor and I've lost my shirt in this current project, but I'll get through it. I'll take all the knowledge I've gained and won't make the same mistakes again. Thank you for sharing your wealth of knowledge, I hope to be half the contractor you are one day.
I know the feeling, I've done that to myself a few times.
I just grind through it and learn my lesson.
Not sure how long you've been on your own, but I learned the only way to survive is I must include overhead on top of the project total before quoting.
Probably most if not all of us have been there on multiple occasions. I pray that you would come through this better than ever brother!
Your knowledge is PRICELESS. I love all your videos.. so much time and though and the right choice of words goes into each one. God Bless
I'm just learning of how to bid jobs. I'm mostly in light excavation work with minimal material usage. It is mostly time and equipment. Thank you for the advice!
LOL! “Recomend one of your competitors so that client can rope them into all the call backs.” LOL! But TRUE! This advice applies to so many other fields and life! You re great at summarizing and delivering true gems of wisdom.
It’s always interesting how “all jobs aren’t good jobs” can be hard to see sometimes (-8
Started up my own concrete form and laying company after 15 years in the game. and just took on a project and the rates looked good at the start but not so much now.
I work in IT now but have been many things. I have run a fleet of logistic trucks, had a removals business and now I have a landscaping business on the side and of them all, we're all tradies at the end of the day and costing up jobs is the same. I loved your explanation of the "psychological" side of quoting. It's the same whatever business I've been in and true, it is hard to learn and appreciate your value beyond what you would pay. My mantra has always been "under promise and over deliver" but I see too many blank faces when I preach this. The most common thing that comes up is "manage expectations" and I feel I always understood what that meant but breaking it down into two separate parts "remove uncertainty and clearly communicate the vision" is all I need to now motivate my team. Thank you for what you do and keep up the good work
As a contractor in an area that is struggling to have enough of us that can do the work. I have built a reputation as someone worth waiting for, currently with a 4 yr waiting list... and here I am struggling to add 10% and justifying it... thank you for reassuring my decision to at least start adding fees. up to this point I have only done the T&M.
lol thats why you have a 4 year wait list. Thats crazy, I'd never wait more than 6 months.
I appreciate your info it's got to hear someone that's talking out of experience as a contractor for 41 years .
This is really hit home for me. I always looked at best case scenario when bidding, so that will change starting "today". Thanks Scott !!!! for this video.
I'm 26 from California. I used to feel bad for charging quite a bit for my services as a young general contractor bc some things seemed real easy to me. I did the mistake of charging cheap sometimes until I really learned to value my work and body. Construction is hard. Wears your body out. Charge for it but be fair! Tik-tokers and influencers, (whatever that means) make lots of money which is easy today, yes..but in the future who will call the plumber, electrician, painter, etc? Value your labor.
I very rarely get bids anymore. I’ve been doing electrical work for 12 years and 90% of my customers just asked me for a ballpark price and tell me to do it. I am pretty comfortable with the price so I feel I’m making enough money it works out for everyone.
Bidding cost a lot!!! I am often shocked at how much or how little work contractors put in.
THANK YOU! This was AWESOME! I’ve been swinging a hammer for 30 years in southern New England. Over 20 of those years have been self employed. The head trash and ignorance of what things cost that we all bring to the table in some form or another really makes life miserable. I grew up in a generationally poor area. So the ideas about money I had really hurt me. The thing that unlocked my mind about what to cost was the epiphany I had of”what would it cost for me to bring my absolute a game to every project and every aspect of what I do?” “What would it cost for me to smile at every unforeseen obstacle?”
I also realized that I HAVE A RIGHT TO EARN A LIVING!
Second thing that changed my life was finding The Contractor Fight and learning their sales format called The Shinfu. Like you said it’s all about asking specific questions, shutting up, and deeply listening to what is important to that customer and deciding if those things align with what’s important to you. Learning to communicate better has been everything.
I always say "I don't compete, I collaborate." I believe there's plenty of business for everyone, if I'm not getting what I need it's my own doing.
I’m glad you brought up overhead. I actually add up all my annual overhead costs and divide by 2,080 (annual working hours). This gives me my overhead hourly rate which I add to all of my estimates. I usually just have one line item for the total project cost that I give to my clients but I have a very detailed excel spreadsheet for how I arrived at that number.
Could you please share how you calculate it?
Asking for enough money is one of the hardest things to do. Also being able to communicate with the client about what they want vs what is possible is another major thing as well. Lately I have just been upping my hourly rate on each job and telling my current clients about what I am doing. It helps them realize that I know I am worth more and that they are receiving a limited time offer. Pricing jobs drove me nuts. I always forgot about details and always priced based on how I do on my best days.
From a single employee mobile mechanic business owner, THANK YOU!
Thank you again. "You're spending your Life..." Wow what a great phrase. I hope there's a book in the works.
This is 💯 the truth. Such valuable words of wisdom ec . Words not spoken by many people. I entered into the world of construction 13 years ago working alongside my father who has been in the business for 30 plus years. And this is exactly what we have learned over the years. Thanks for videos. I really do enjoy them
Forgot to mute the onboard audio track. Good job syncing though...that was pretty close.
Can't wait to see you and Matt on a video (or maybe you and Kyle). I hope it happens someday. Makes me think of that old joke about the old bull and young bull standing on a hill :)
I stopped giving free estimates 3 years ago. I charge $120 for the 1st 1 hour meeting and more for estimates and have weeded out the tire kickers.
I did the same, with the exception of repeat customers who already know my worth. Total game changer, and now I have time to do the work for my favorite clients, and time with the family at the end of the day instead of giving someone my free time at dinner hour.
@@Wallymakesstuffexcellent concept!
I only got chewed out for telling a potential client that I charge for estimates once, and was relieved! (Dodged that bullet)
Scott, your experience and wisdom from all the years in the trade is invaluable. As a mason when I started out, I did far too many "side jobs" for next to nothing, believing I was doing the Owner a favor. Only to watch them sell the property and reap the rewards from my labor.
I was terrible at pricing my jobs and ultimately worked for others rather than myself.
There's a song from our past:
"I wish that I knew what I know now
When I was younger
I wish that I knew what I know now
When I was stronger"
Hopefully the younger guys and gals are seeing what you are teaching - I wish there was someone around like you when I was doing those jobs... but we all live an learn.
"Keep up the good work"
I do shared your experience and it is a terrible feeling at the end of the day where you know you didn't make as much as what you should get. It's a discouragement for sure but live and learn and grow. Learn to say no is a step too.
I paused this video at 11:48 because the subject rather reminds me of that hilarious comedy "The Money Pit", starring Tom Hanks and Shelly Long. The crew they hired to refurbish their classic, old home was a motley bunch who seemed better at demo than actual building. best lines: (paraphrased) "How much longer until you're done?" and "Two weeks!" I strongly suggest watching this flick if you haven't, already. (Or re-watch it!)
Yes... good movie .. my line 220-221 whatever it takes .. Another classic , older from the 40's .. Mr Blandings Builds His Dream House (Cary Grant)
“Aren’t you going to offer me a drink?”
“Oh, yes! What was I thinking? It’s almost noon. You must be parched!!”
This is my favorite RUclips channel. Scott is an IDEAL version of a man!
Spot on! As a supplier I can find the bottom feeders and the guy getting it right just in talking.
As a remodeling general contractor who works in homes that are 100+ years old 90% of the time, we provide estimates rather than hard quotes and do our work on a cost plus basis. We build in the overhead and profit in the hourly rates, and most of the time we are within 10% of the estimated price barring changes of scope (which happen all the time- once someone has a competent contractor in their home they don't want to let go of them). The biggest problem we have related to that is what it does to our schedule; when we have someone add a ton of work to the plate it can really wreak havoc with customers who are waiting for us to start the project. This is one reason we won't take deposits until a week or so before I KNOW we are going to start the project. Of course, when cabinets are already ordered etc. that changes the game so we make it happen no matter what.
true. when i do an estimate, I am interviewing the customer, not the other way around
pricing tree work after the storm yesterday in NC, i think you all should come here and start a tree service. some competition would get the prices down!!
Can you do a video from the other perspective; how can a customer/client pick the right contractor? Also, what behaviors should a customer/client avoid and/or irritates contractors?
iirc he actually does have that video. It's called Hiring a Contractor: 9 Things You Should Know
I can start tomorrow morning. Really bad news. I might be able to fit you in the winter. Really good guy.
@@Prodmullefc And also a a book to purchase
Communicate what you want as early as possible. Try not to change your mind 25 times throughout the course of a project. Pay promptly.
Contractors want to get it right the first time just as much as you do.
this man gives us hope, thank you
Great reminders that just because many of us work with our hands AND our minds that we should charge for that value and those skills!
The instructor at the contracting school I went to said “figure your materials and double it, figure your labor and triple it”. I could never go that far, but that P&O percentage you speak of can make or break you.
Very appropriate "big picture" discussion. A little short on specifics, but a good start. The first topic, finding good clients. Less experienced GC's might not have that list of questions that identify the "20%". So were do they find that list and how should they ask without alienating the potential client their interviewing. This may be obvious to an experienced operator but not so to those less seasoned practicioners. After all GC,s are trained crafts people not counselors. The answers would make a good topic for another separate video.
You're saving my life right now. Thanks for these wise words.
Man, I wish this video came out when I started. Super validating information here.. the law of reciprocity is an art form
Just a quick word on change orders, always get them signed. I always signed my own when I had the contractor sign it and that way everyone was on the same page and agreed to what needed to be done. As a side note to a change order, make sure that you write in it exactly what you are going to do including who pays for material and the labor to complete the job. I’ve seen jobs where the amount of money the change orders cost exceeded the cost of the original contract so make sure you get them signed and keep them filed in a orderly manner.
I build IT systems. The idea is to build long term relationships. I have contracts that have been running for years with just change order after change order. The core contract has been done for years. Often, a new contract takes way too much time and paperwork. A change order might only take a local managers sign off, not involving several corporate depts. The government calls them indefinite quantity / indefinite delivery contracts. They are a beautiful thing if you actually serve your customer well.
Some contractors,will intentionally bid lower on jobs, bomb w/ change orders that wind up sometimes really hammer ing project cost. Calculating insane profit for them. Instead of including there nominal margins w/ original bid. I call it predatory bidding because they victimize clients delays,or plain job progression ceased until they uuhmmm, correct issues. Which in turn puts trades behind. There are legitimate offsets on projects that may not forseen or correctly planned, installed.lnspectors definitions of what is & not acceptable.very broad brushstrokes for them. Jurisdictions Remember code is absolutely minimum requirement in that particular area what ✅ here may not there. Some time you have to give them the knowledge that's holding up your part of job. The scouts teaching scout master how to start a fire so you can get merit badge. 43 yes. in const. seen a lot of WOW moments of being impressed & disbelief
@@kelturner5452, You are absolutely correct, I thought about including the fact that some contractors will low ball a bid, sometimes under costs and then once they have the job and are building it will start saying “That’s not my job” to all different aspects of the contract. They’ll come with their hands full of change orders, this is one of the problems with government contracts, where low bid wins.
The other commenter here Bill_N_ATX, makes a very valid point, Build long term relationships, this is what you want to aspire to, when contractors just call you to do a job you haven’t even bid on. They call because you do good work, on time, and you end up doing all their work. You know what you’re getting with them and they know what they’re getting with you, jobs get done and everyone makes some money. Just don’t get greedy on them, if you lose some money on a job, you know you’ll get more jobs with these long term relationships. Good luck out there and be careful!
Just adding another thank you. Thank you for sharing your valuable experience. Many contractors of your generation have not done a great job when it comes to mentorship. This is certainly actionable insight as well as encouragement at just the right time. I am three years into my GC journey in a very tough market (South Florida), learning every single day.
Really happy that you provide these videos
Your closing statements are spot-on. (See my prior statements, below). There's no such things as being "over-prepared" or paying yourself what you know you're worth, Love these videos!
Excellent advice, EC. Thanks for sharing your knowledge and experience with us.
Hindsight is a gift. Thanks for sharing what we all know but fail to act on. We have to eat after all is said and done..
The comment about “if you’re getting 100% of the jobs you bid, you’re not charging enough” is gold. I used to tell a former employer this all the time. They would scoff at my comments and act like I didn’t know what I was talking about. They would get most of the jobs they bid and we would go over budget on most of them. They were betting on best case scenario which is rarely the case.
I left that company a few years ago and they seem to be faltering to this day.
Priceless advice, thanks.
In the UK we have a “can you just” note pad for calculating extras in. Amazing how many customers expect extras for free.
Although if they don’t, & the job goes well, invoicing less than the quote makes for a happy customer & gets you recommended.
Thanks for a good video. As a subcontractor (excavation), my bids and estimates are so much easier… but I still hate doing them. I try and do time and materials whenever possible, it seems it is always the cheapest option for the client and I don’t have to worry about change orders. Although, I see I might not be fully managing the uncertainty.
I have always struggled with charging the full amount. I also don’t have relationships with competitors- which would be really good when I turn down work (mostly due to an already full schedule). I’ll have to work on those.
For newbies- If you’re the lowest bid, that’s not bad. When you don’t have referrals or equal experience, having a low bid is a great way to start getting work… but when the schedule gets busy, move up the rate as appropriate.
Something about what you said reminds me to an line of Scotty in Star Trek in Star Trek Next Generation Session 6 Episode 04, "Relics", What it takes to be thought of as a miracle worker. Scotty explained that to Kirk in one of the Star Trek movies; I think it was Scotty took the time estimate and multiplied it by a factor of four, but he was dealing with Captain Kirk, who halved the time frames.
I love the sound in this video.
It’s like you’ve been watching me write up my quotes! I tend to do higher end work for wealthy clients in the counties outside of London. I’m forever under pricing jobs. All too often because I’ve gone off best case scenario
We vet our potential clients by checking thier social media prior to bidding. Surprisingly effective and saves time.
Bingo! 10-15 minutes of due diligence online and some carefully asked questions will weed out 90%+ of the poor quality prospects.
@@BRLnSEE Exactly
I have had signed contracts unpaid at the end. even with the threat of litigation. A lawyer buddy helped me with a few, and said the game is, if the debt is 10-15k or less, you will spend more fighting to get it back. Even then you may not get paid.
I try to keep the final payment at $5k or less, which is the small claims court max in my state.
Staged payments are a must. And, the balls to walk at the first time they balk at paying. Respect must exist on both sides of the project.
You set that concrete spike deep with that advice, it took me a long time to learn from that experience
I needed my roof done recently. Got several bids all over the place. Took the lowest bid and got a great job done. Completely satisfied. Just because someone bids high doesn't mean they will do the best job.
Good for you, not for your roofer though. How long has he been in business? Did he make enough enough profit to help him get through the winter?
@@GuldeScott No clue if roofer I used makes enough to not work during winter. All that I know and all I care about is that I got a fine roof at about half of what other roofers wanted.
@@gwb8445 I'm thinking that you should throw that guy a few more dollars. He's probably struggling because he works too cheap.
At just under 10yrs in as an electrical contractor, I am just now learning that most customers respond better when you are up front and honest about the costs. I have always been hesitant to tell them how much it was really going to cost, afraid that I would lose the job if I was too high. I get more jobs now just telling them how high it's actually going to be. Also, customers are forever grateful if you overbid and then charge them less. Do the right thing and if a job went silky smooth then cut the customer a break. It'll come back to you in future business and referrals!
One way to look at it is, the people I want to work with are the ones that know the lowest bid is usually for crap quality or by someone that doesn’t value their own work.
The part where he said refer bad clients to your competitors says it all haha good riddance if you’re into low balling
As a homeowner, I say keep your prices reasonable, with everyone charging so much it has led me to RUclips to learn how to do everything myself which I would have been fine paying someone to do had the prices been reasonable.
For example got a quote to clean my carpet one guy 3,000 other guy $270 I went with the smaller number and he did a wonderful job, but my next step before I found a better price was can I find a used steam cleaner and do it myself. Keep your prices fair or you are going to create a bunch of DIYers which can also lead to competition.
As a contractor I say you are the exact kind of client I stay away from. 😂 Do I dislike DIY’ers? No, I think that learning how to do things yourself is really cool, but, if that is your inclination, if you would rather spend your free time, basically your overtime, the time you would get paid time and a half on your job, to do your own construction work, then you dont, won’t? value my time and my time, even more so than my skill, is what is my most valuable commodity and what I have for sale. In actual practice when a potential client starts talking about “reasonable” prices I’m headed for the door. Just saying
@@akbmunsell Just so you know even though I would rather do my own work than pay someone a ridiculous price, I do in fact value their time I just value what’s left in my account more than their time. And if you needed work done on your house, you’re going to pay someone else to do it so you can make more money on a job? Also when you need a subcontractor, you as a contractor know what a job should cost to be done and if a guy is charging way over what it should be are you going to use him because you value his time and skill or are you going to use the guy that’s not being greedy who is just as skilled?
We do not compete with DIY'ers. If you're capable, more power to you.
@@probuilder961 So if a guy try’s his hand at construction due to high prices, realizes he’s actually good at it and hones his craft and starts his own construction company, he’s now your competitor. In my part of the US a guy only has to answer his phone and clean up after he’s done and he would take the jobs from guys doing construction for years longer than him.
I grew up in a construction family and sadly I decided to go a different direction, but it’s hard to find someone that does quality work especially on what you can’t see. I bought a manufactured home, previous owner had mice and didn’t know how they were getting in, long story short the plumber didn’t seal any of the holes that were going into the house, why because you couldn’t see it, only reason I saw was because I upgraded to pex.
The first guy didn’t want the job. The second guy had to have it.
Great video EC! Your words apply to any industry. When you feel like you are in a race to the bottom, chances are your biggest competition is yourself. I’d also like to add that the importance of factoring your depreciation on the equipment being used can be overlooked or under estimated quite often - equipment wears out and it isn’t getting any cheaper to maintain or replace.
Sound advice. I'm retired now but I underpriced my work just to get a toehold in the biz. It did get me some work. Small stuff. I was afraid of Remodeling because of the potential for bad surprises. A good friend got burned for $20,000 by a customer who directed lots of extra work but refused to pay for. He was too trusting and lost in court. I've turned away a few. Just threw them a high price. I wish I had priced my work better from the start.
In my business. I find it very difficult. Most will love the race to the bottom game. I have found that pricing usually isn’t the issue. Its the people you are trying to serve. The right people will pay your price period!
Thank you Scott! This is the type of content that is so hard to find but is genuinely life changing. I can mill a board any which way in my sleep but I struggle so much with 'the business end of the stick. If you or anyone else had some suggested reading on the topic I would appreciate it, and would surely pass on any knowledge I could glean from it.
Well, you know, ... there are some of the more experienced Contractors who simply refuse to work on a fixed bid basis. These "time & materials" guys don't get themselves into those no-win situations. But, of course, they also have to be willing to pass on a LOT of jobs. But THAT'S A GOOD THING, if the alternative is to work for nothing. And the time spent working-up all the info on a job has to be covered by the overhead, too. Personally, ... here in Southeastern Pennsylvania, ... ( where you are often bidding against Amish crews, with their unique overhead situation ) I've found that a deceptively simple formula ( materials X 3 ) will get you just as close as any other, without all the HOURS of paperwork.
I encourage my contractor friends often that even the Bible agrees with this mindset. 1 Timothy 5:18 says "The laborer deserves his wages."
Great video, appreciate the practical advice!
This ^^ !!!!
Keep up the good work.
this is a great video in general for speciality contractors
I love listening and learning from you over the years ,thank you for great advice ❤
Great advice as always, Definitely finding the right customers is key
Thank you for the great heartfelt advice!
Excellent advice, I spent 20 years in roofing, and building houses and the other trades during the winter time in Iowa, roofing was the best here is the price $ what color do you want 🤔 that was pretty much the extent of the conversation, I miss those days 99% of the time I got the job, it was all about reputation and a fair price.
Now I am 49 and doing Windows and siding -house additions - etc. I would say half of my work the people don’t even ask me for a price any more. now I have to put up with little old ladies telling me about their aunts cousins sister‘s boyfriends moms sister changing their wall color that they don’t approve of. Even at $60 an hour I can’t handle it, My advice would be to pick out one trade and be a true (craftsman) /professional at it. And do something unusual in this line of work be humble!!
Truly inspiring words, pretty good approach on the issue like always! 🙏🏽
In sizing up customers, here's my advice. Never work for someone over 45 who has more than three cats. Never work for a couple who are restoring an old house in an attempt to "strenghten" their relationship. And never work for an architect on their own home! Full disclosure, I did violate #3 and it turned out alright.
I've never been a general contractor, or any kind of building trades contractor, but my software development career included a good bit of contractor time, so some of this applies. On the first issue, I did a modified version of that. If I felt that a client was going to be more hassle than usual, I simply set a higher pay rate. I didn't want to close the door *completely*, but wanted to be sure it was worth my time. One client in particular, I'd worked for three times, and they were consistently an awful shop. I set a substantially higher rate for them than my usual, and that plan worked. They didn't bring me on again after the third time. I did good work for them, and they appreciated it, but other aspects of the situation just made it demand more pay. My third time with them was the highest charge rate I ever had. As expected, a lot of what Scott said applies well outside the building trades.
How did you find contract dev work? What 2 things did you dislike about it the most?
I’ve been thinking about doing it myself for awhile
@@floodo1 Mostly, the work found me, as I'd already built a reputation in the industry, and particularly in my fairly narrow niche. I *tried* finding new work at times, but that never seemed to go anywhere. In one case, I found where someone was trying to hire a bunch of hourly workers for something where I knew I could build tools that would greatly increase such workers' production rate, so they could pay me a bit to build the tools, then save a lot more than that on reduced manpower to get the work done. I described that to the hiring manager, with references to my prior work, but didn't get any response. As for what I disliked about contract work, the big thing is the unreliability. When you're between contracts, you may have no idea when the next one will be available. That depends a bit on your particular field. Mine was narrow enough that jobs came up infrequently, though when they did, very few people were qualified to do them. So if you need a steady income, that could be a problem. OTOH, once you get started contracting, you can stuff away a lot of money, living way below your income, and have that to fall back on while between contracts. The irregularity can also mean that you're just about to go on a trip, and get notice that someone wants you to do some work for them. Sure, you could turn down the work, or delay until after your return, but if you want a better reputation, you put your plans on hold and do the new contract. The second-worst thing about contracting is paying taxes. You have to pay taxes quarterly, *estimating* what you'll earn over the course of the year. You definitely don't want to underestimate, and send too little money in. AIUI (talk to a qualified tax attorney), even if you make all your money in the second half of the year, you need to send in taxes for the first two quarters as well.
Oh, one more thing about the taxes. When you're a W2 employee, the federal government lies to you about how much of your income you're paying in "payroll taxes", the income taxes that they don't want to admit are federal income taxes. Half of those are paid by your employer, on your behalf. But your employer isn't paying that out of the goodness of their hearts, and if you're contract (1099), they won't pay it. So instead, the feds require you to pay that "other half" yourself. You need to consider that when you set your rates.
@@BruceS42 lol they make you pay "the other half" because that is the medicare and social security portion
it is folley to go into business as a contractor without understanding basic tax law imo. Many people do it but at their own peril
@@floodo1 It looks like you misunderstand. Social Security and Medicare taxes ("payroll tax") are, for W-2 employees, split into two halves. One is deducted from the employee's paycheck, and you'll see those line items. The other half is paid by the employer, but of course they see it is part of the cost of employing you. This is a sort of scam, to make it look like those taxes are half what they really are. When you do 1099 work, the scam is revealed, and you have to pay that hidden tax yourself.
Best advice you have shared. Thank you.
Sounds like the camera audio and the mic are in the video giving the echo. Not too bad but just a heads up. Love the content and trust you above other youtube builders!
Strange audio on this one. Thank you for your advice and care.
Thank you.i needed to hear this specific info.iam handyman and need all the info I can get concerning this topic.
Market and profit a contractors guide revisited
This book is one of the best for learning about to calculate markup and margin.
Markup*
My biggest tip I can offer to people is put your work on RUclips. If people can actually see the high quality work that you are doing they will be more inclined to pay for it.
yup but you will still get cowboys
I remember a story about a small tender, named “Successful Bids”, attached to a beautiful sailboat named “Change Orders”.
Back in my early 20s (I'm 68 now), I took my confidence in my mastery of using a hammer and a circular saw to mean I could "break into the business" of contracting. I read up on some business-related stuff and boldly stepped forward into the unknown. Inside a year I was brutally taught that I certainly had no business in this business! The business stuff I read was the wrong stuff. I never sought guidance from a seasoned pro (looking back, my audacity was a fool's errand. Thinking I might be the next "bumbling dummy to stumble into mega-success"! Some years later I learned to chuckle about that. Now I belly-laugh about it!). Rule 1: know the BUSINESS of business first! Rule 2: know it from a successful "guru" of the craft. Or crash and burn like I did.
Your post reminds me of an old saying: The business of business is business.
EXACTLY the right advice at the right time!!!
Thanks Scott for all that you’ve done here and for all that you’re doing
SO VERY HELPFUL and uplifting
From another Oregon Scott 😀
Thanks for that video. I’m working on a bid right now for a 4 car garage.
Recently found your channel and thank you for all the wisdom!
I am an Arborist and have asked people for years why does everything take longer than it should?
And especially if the boss isn’t around?!?
Ps I want one of those hammers
Thank you for your inspirartion!
Really like your channel. FYI the audio is a little funky on this one. Love listening your thoughts! I’m an electrical contractor
Thanks for the tips! I follow from ensenada baja mexico
Nailed it. Thanks Scott.