Existing customer of years questioning price

Roofing Business Talk
#1

Never before has something like this happened but here goes.

A good customer that has given us work every year for the last 3 years was sticker shocked by the final invoice of some work we did for them. They basically said to go “sharpen your pencil” and send something else since after we completed the job (not a big one) they felt that we overcharged them.

Then they proceeded to go get 5 estimates from other companies.

The task: Remove 2 skylights, Alter roof framing to close existing skylight holes up. Install decking in those spots. Ice and water area. Install 6 bundles worth of shingles (tie in to existing shingles which are in horrible shape (arc’s that are heavily worn and delaminating). Go inside, remove drywall ceiling under the area. Insulate where the skylight was removed. Install 1/2" rock on the ceiling, mud and tape, prime & paint.

Now it’s on an apartment building so there is 4 units like this (8 skylights 6.6 sq). I suggested to just rid the place of the skylights (as they are all rotten around the frames, tar covered and promote horrible ice damning since the upper roof drains on this one). I gave a price for doing all 4 at once, they declined the price giving the excuse they didn’t want to disrupt the tenants blah blah blah.

My price for 1 unit was $1,600. The price for all 4 was $3,400. I purposely priced 1 higher to push them to do all at once since the shingles are in such rough shape. It would have taken less time to just re deck the whole thing vs. trying to patch this and that which I hate doing. Also the ceiling work inside would have all been hung/taped/painted in a sequence of revisits. The same revisits we would have to do even to do one… so in my mind no extra trip charges.

They received bids from the other companies to do all 3 places that remain for a total of $2,800 - $3,000.

Am I wrong by charging what I did in comparison to the other companies and screwing a good customer/friend… or are they just being difficult and having buyers remorse?

I’ve never run into this with them before.

Kind of a odd question I guess…

#2

Sounds like a crappy job with lots of running around. I hate those kind of jobs, suck up your time and there’s a lot more things that can go wrong than can go right. I wouldn’t consider doing that job for what you quoted. I’d tell them to have a happy and have the other contractor do the work. If I misunderstood and you already did the work, your bid is still within reach of the other guys so I’d tell them to pay up. If I misunderstood further and you did the work without a quote upfront, honestly, shame on you.

Good luck, I hope it works out for you.

#3

Dad,

We quoted the work, and completed just removing the 2 skylights in the one unit. It came with a invoice amount of $1,600.

Off the other bids from other contractors (for removing the rest after the fact) I could tell he was looking for me to take their $3,000 bid and divide it out by 3 units and charge $1,000 for the job total. If he was to use the same logic they would have been around $3,800-$4,000 for the 4 units, and I would have been around $3,400-$3,600. When I explained this to him he said “well if I knew that I would have just done that…” Which basically I said, I couldn’t understand why you didn’t. Except he had some excuse when I submitted the two bids to him that he wanted to just do them as they presented issues and what not.

He is really comparing apples to oranges. Since if he contracted me after someone did what I did and I didn’t have to tie into nonsense of old shingles my price would have been right about their bid including ripping off the shingles I just did and going all new. Having a finisher come for a small job or one that is 16 sheets costs not all that much more.

I’m just extremely pissed at this current moment about it I guess, because mainly the way he went about it. If he approached me after I gave the estimate and said “listen I had X budgeted, and this is way higher than I was expecting…” I probably would have been fine with working on a lower price for the single unit if I could make the numbers work. I’m a fair and reasonable guy. But to remind me that it’s apparent there isn’t much work out there, and the past amounts he has given me to date in business pisses me off. Especially that saying “go sharpen your pencil and do what ever you need to do”… urggg.

After I’ve given him stellar deals on some things I have done for him. I guess I’ve given him far too great of prices on a lot of things.

I’m not sure why people currently are thinking in my area single servings should be sold at bulk pricing. I wouldn’t expect to go to the store and buy a single can of coke for the price of a 12 pack divided by 12.

To appease him, as I probably am one of the last people who believe “the customer is always right”… and I would rather collect something than nothing…

What I did was sent him over a itemized bill for time and materials removing profit and overhead as basically he said he would not pay the bill I submitted which really pisses me off to no extent. I don’t understand how people think you can run a business to just make a wage, tools/trucks/gas/insurance/planning/material pickup/skill/education/experience must be worth nothing to some.

It’s just another nail in my coffin in this industry. I’m about at my ends wit with people haggling, arguing, and not paying timely. This is the 4th job we have done this year that payment has not been timely, and the people are playing games like this. It’s making a terrible cash flow situation.

Lesson learned, friends and family can go find other people to do their projects… is the moral of this story I guess.

Not sure if I’m looking for advice or just ranting.

#4

That’s when you look them right in the eye & say sarcastically; “Oh, you want the 1974 prices. Not the 2014 prices.” People suck, submit the bill & get paid. Don’t knock any off & Don’t do any more work for them. Allready it sounds like you have to 30, 60, & 90 them to death to get paid. You don’t need that craps.

#5

Even after reading all of that, I’m still unsure if, since he was a regular client, you just went over and did the work and then sent him a bill or if you gave him a set price upfront, he agreed to it and then you went over and did the work. If it’s the latter, then he owes you the full amount of the agreed upon price. If it’s the former, then he can refuse to pay and you would be stuck.

When I did the selling but not the work, I would have a similar issue from time to time. Even though I really didn’t think it was right, I would bite the bullet and give them a couple hundred off every now and then just to ease the stinky situation. Since I’ve done my own work for the last several years, I have not had this problem. Sometimes they might think the charge was a bit high but with me standing right there and having just finished the work, they always write me a check for the full amount. No one has asked me to lower the price.

I charge for ALL of my time and costs. This includes all driving time. Picking up materials, driving to the job, driving back from the job. etc. Materials, Insurance, Auto Fuel, Advertising, the whole works. Yes, unfortunately many people don’t understand that you can’t be in business without charging a reasonable amount that will allow you to stay in business PLUS make a fair profit. Often upon completing a job, I get this: “Well, that didn’t take too long”. They are only considering the time it took to do the actual work and only the cost of the actual work without overhead. I just don’t say anything because that topic of conversation can not go anywhere good.

I do not break down costs for anyone including insurance companies. The charge will be XXX amount for the whole thing. It’s really that simple. If you want it broken down, call someone else. I’m alright with that. That way you can break them down instead of me. I broke down a job quote for a lady many years ago, she looked it over, turned red in the face and angrily yelled at me, quote: “I don’t see why I have to pay for YOUR insurance”. I said right then, that would be the last time I ever go to all the trouble of breaking down a quote. And it was!

#6

I just did 100’ of fence for $2100. The neighbor asked how much to do 50’. I told him $1500. He balked at first, but when I explained that both of them will take a day out of my schedule. I can do one in 8 hours, and the other in 6. What the hell am I supposed to do with the other 2 hours.

Little jobs cost more. They take the same amount of running around and headache, and often I am stuck doing little dumb fixes that would be easier if I just tore the whole thing out and started over.

Don’t feel bad. You aren’t screwing anyone. In my neck of the woods, I would be looking at $400 in materials, and a bunch of running around. Add to that, the actual time, and I would be making $500 ish for the day. No way in heck I am going to put a couple guys on a roof for $500 and pay myself… NO WAY!!!

#7

Thanks guys. At least it is comforting to know that I’m not just out raping and pillaging people.

I ended up itemizing the bill for him and taking some money off it since we did some other items at the property too that well a hassle but not super “costly”.

Overall I took 21% off the job. Basically my profit and overhead to just get the job paid up. At this point we are starving for the money from being stiffed on final payments so much frequently.

Lucky, I send a estimate, he agreed we did the work on short notice with a pending deadline on a inspection from the town looming 3 days in the future. It included a Saturday and Sunday visit to tie up the drywall work inside. Overall it was 4 days of visits… We still made money but nothing to write home about.

We aren’t just salesman either, we are there working. I don’t think I could ever just be the salesman, since I like to know how something is being put together. Usually we would have other people working as well, but since tough times have fallen on us every employee is gone. We are back down to two business owners trying to scrape up $30,000 gross a year for each of us. We are at a whopping $2400 gross each so far on month 4/12. I’m thinking this is the year we go out of business.

In my area, I’ve placed over 40 bids out on everything from bathrooms, roofs, to decks and consistently I’ve been responded to with “We choose to go with the other contractor since their price was drastically less and more in our budget”. I don’t know how these guys are doing it, or why.

I lost an addition on a house (16x14), the house to strip aluminum siding off (16 sq job), then reside it with vinyl, rip the 14 sq roof off and re do it… obviously roof and side, soffit and fascia the addition as well. Then cut in a 14’ opening into the house, redo the rear gutters… Our price was at $34,320… including removing the existing 14x16 deck, and doing the foundation as a crawl space with footings at 4’… I was outbid at $21,900. I figured with materials, trash, permits, testing at about $18,000. Maybe I’m on drugs and think my price was very fair…

Maybe my prices are high… maybe people in my area will work for way way less. I’m not sure. I just really can’t take it anymore.

I’ve been outbid on roofing jobs and when I calculate my price I’m looking to get ($300-350/sq… with about $166/sq in material/trash) Other companies are bidding at $225 sq/- $250/sq. That’s for 2 layers off 1 on. Walkable or not. I’m thinking im spinning my wheels here…

Last year I was at $350/sq walkable, and other companies were touching $400-425… Why the hell did they roll it back years and years?

Am I overpriced or what?

#8

[quote=“JakeD”]I just did 100’ of fence for $2100. The neighbor asked how much to do 50’. I told him $1500. He balked at first, but when I explained that both of them will take a day out of my schedule. I can do one in 8 hours, and the other in 6. What the hell am I supposed to do with the other 2 hours.

Little jobs cost more. They take the same amount of running around and headache, and often I am stuck doing little dumb fixes that would be easier if I just tore the whole thing out and started over.

Don’t feel bad. You aren’t screwing anyone. In my neck of the woods, I would be looking at $400 in materials, and a bunch of running around. Add to that, the actual time, and I would be making $500 ish for the day. No way in heck I am going to put a couple guys on a roof for $500 and pay myself… NO WAY!!![/quote]

Itemized out, I found every last material cost I was at $730 for the materials, and $350 in a finisher who included his own supplies.

The other work we did in the place was cutting out 21’ of rock that was water damaged that was 3’ high, and a 4’x5’ area of another ceiling that was water damaged. Tie in, new baseboard on that area, Paint to match existing walls & ceilings. I had charged $425 for this work.

So total the bill was $2020 or so including the other drywall/repair work and the roofing work. I ended up dropping the bill down to $1618 basically eating the other work.

Leaves the taste of crap in my mouth… and he want’s a bid for the upper roof (of course only 1 of the 2 sides)… replace 4 skylights, 6 pipes, 14sq the idiots who redid the roof the last time plywooded over 2 layers of existing shingles then shingled on that leaving the skylights flashed under the plywood. Not even sure if I will return a bid on this. How am I to remove 1.5" of material and make the peak look normal? We usually use 2" drip on new work (1.5" bent up)… there is 4" drip on the other side.

#9

These days roofing seems to be all about production. How many jobs can you sell and how fast can you get them done? If you bid low, sell a lot of jobs and get them done fast, you can make good money. Insurance work is about the same thing except your not bidding but if your doing the work for “what insurance pays”, it is still at a low rate and you will have to build a lot of jobs to make a nice profit. If you already know that your not going to be selling a lot of jobs then you have no choice but to bid high enough on each job that you can make your profit doing less jobs. The only way two guys are going to turn out a lot of jobs is by them doing the selling and then subcontracting out the work.

When it got to the point that I had to bid 10-15 roofs in order to get 1 job, I gave up. For the last several years, I have specialized in repair work. This is not easy either. It’s tough out there. I won’t even bid a full roof job for a stranger at all anymore. Only repeat clients and referrals qualify for a roof replacement estimate. I tell them upfront that I will not be the cheapest price. Basically, I only work for quality oriented buyers. Not price shoppers. If all they want is “cheap”, I prefer to not waste more than 30 seconds talking on the phone with them.

#10

[quote=“LuckyChucky”]These days roofing seems to be all about production. How many jobs can you sell and how fast can you get them done? If you bid low, sell a lot of jobs and get them done fast, you can make good money. Insurance work is about the same thing except your not bidding but if your doing the work for “what insurance pays”, it is still at a low rate and you will have to build a lot of jobs to make a nice profit. If you already know that your not going to be selling a lot of jobs then you have no choice but to bid high enough on each job that you can make your profit doing less jobs. The only way two guys are going to turn out a lot of jobs is by them doing the selling and then subcontracting out the work.

When it got to the point that I had to bid 10-15 roofs in order to get 1 job, I gave up. For the last several years, I have specialized in repair work. This is not easy either. It’s tough out there. I won’t even bid a full roof job for a stranger at all anymore. Only repeat clients and referrals qualify for a roof replacement estimate. I tell them upfront that I will not be the cheapest price. Basically, I only work for quality oriented buyers. Not price shoppers. If all they want is “cheap”, I prefer to not waste more than 30 seconds talking on the phone with them.[/quote]

Lucky,

Agreed. It’s getting to that point. I used to bid 3 roofs to get 3 or 2. We had 70% close rate or above.

Have you always lived in Birmingham, AL? My gf/hopefully fiancé soon grew up outside Birmingham, al in double spings, AL about 1 hour or so away.

I went down there last summer and loved it down there. People are so friendly and happy. It was a total change of pace for me. I’ve been looking at homes down that way and jobs… dreaming of moving. I don’t much care for tornados and snakes, but I think I can deal as long as I get all my gun rights back, and every step I make isn’t taxed 3 times. You guys sure know how to cook too.

Think it’s a good place to live?

#11

I’ve been here 20 years but I live in the country side, not the Birmingham Metro area. If by saying (“I went down there last summer and loved it down there. People are so friendly and happy.”), you meant that you visited the small town of Double Springs, I can relate. However, the Birmingham Metro area is the largest area in the state and not much different than any other large city in the country. It’s nickname is “Little Atlanta” but it’s not so little any more. If you get $350 sq. down here it means you were the only bidder. :badgrin:

The suburbs or country side is a great place to live. Can’t say that the closer you get to downtown. Gotta go turn the pork chops over on the grill and add a little more sauce. Take care! :slight_smile:

#12

Lucky,

I was just amazed by the size of Birmingham, AL when I drove up towards it to head west to Jasper/Double Springs. It felt like a mirage out, since we drove for hours through nothing.

I liked the more country setting. I think it’s just the freedom of everything in the South that seems better.

I doubt I would be looking to get $350/sq when i’m not being gang banged every which way to make a dollar. Your guys materials, and cost of living are so much less.

How would you say the economy is down there? It’s rough up here in upstate NY. I’m thinking about hanging up the tool belt and getting a 7-4 job. We haven’t had work in a while now, and the jobs we would have had we lost to other contractors with lower prices much lower than i’m willing to do it for… Then the last few didn’t pay up, it’s the perfect storm to learn to get out I think.

Want to hire a day laborer? :)? I’ll pick up all the shingles with a smile on my face.

#13

Birmingham is the biggest metro area in the state. The average is around $200 sq. for a 1-layer walkable tear off job. :shock: