August 11, 2025 • 58 mins
Clark and James tackle the challenges of estimating for profit in the contracting business, exploring strategies to price jobs appropriately while competing with lowballers and maintaining healthy margins.
• Detailed estimates showcase expertise and help filter out price-focused clients
• The "cream rises" philosophy: focus on attracting clients who value quality over price
• Communicate transparently about potential issues competitors might not mention
• Three-phase estimation: desk estimate, site estimate, and final quote
• Present yourself as a guide on the renovation journey rather than a product seller
• Consistent follow-up (Tuesdays and Fridays) dramatically improves client conversion
• When handling changes, present options that might offset costs elsewhere
• Let the calendar be "the bad guy" instead of appearing desperate for work
• Be upfront about changes between estimate stages to build trust
• The better contractors collectively become, the better for the whole industry
If you want to talk about your business or how you can grow, go to ProStruct360.com and contact us to schedule a 30-minute call. Try our ProStruct360 software with a free two-week trial - it's month-to-month with no contracts at $199 or $89 depending on what level you need.
Join us January 11–13 in Nashville for the Chart the Course 2026 Planning Retreat. Sign up now and get three free coaching sessions before the event to finish 2025 strong and hit 2026 with a clear game plan. At the retreat, you’ll tackle systems, hiring, marketing, and leadership alongside ambitious contractors, leaving with a blueprint for growth. Spots are limited—visit prostruct360.com to learn more!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to Contractor Cuts, where we cover the good,
the bad and the ugly of growinga successful contracting company
.
Speaker 2 (00:13):
Hi, welcome to Contractor Cuts.
My name is Clark Turner, I'mJames McConnell.
Thanks for joining us againthis week.
So today we are talking aboutestimating for profit.
How do you build your estimates?
How do we make profit?
How do you price out a job?
And the main thing that we'recovering, or that we're trying
to solve, is where, on the scale, do you put your pricing from?
(00:38):
I'm losing a lot of jobsbecause I'm pricing to the
profit I want to make versus I'mworking for too cheap, versus
I'm submitting bids knowing I'mgoing to change order the crap
out of this person, right?
And that's who I'm competingwith.
And so we're going to talkabout pricing, how to price
estimates, how to handle it, andthen we're going to walk
through every single stage in ajob that pricing comes up and
(01:02):
how we deal with it differently.
So we'll we'll kind of gothrough that.
So, starting off, though, james,I'm going to ask you, cause you
do a ton of pricing.
You, you are like the estimatorof all estimators.
In my opinion, you're reallygood at building estimates and
being being like Mr Estimator.
(01:22):
We'll get you a hat.
Stop it.
When you're building anestimate, I mean, I know you
don't think through competitionand what they're bidding.
You are bidding for you, right.
You are bidding for what we cando it for.
But what is?
How do you combat the guys thatare low-balling change orders?
(01:44):
How do you combat the bids thatjust come in lower than you and
they're just one-man show thatisn't making profit.
He's just getting paid for histime and that's it.
How do you build your estimateto combat that?
And then also, how do you dealwith the customer to combat it
as well.
Speaker 1 (02:01):
Okay, it's a lot of questions, no, but I understand
and I think I can answer thisthe and again.
This might be a littlecontroversial and I think
there's times maybe in the lifecycle of a company or a season
where you're like we're gonna,we're gonna shift a little bit,
we're going to make a little bitof an adjustment here because
(02:22):
we're not landing enough bids.
I'mids I'm a little bitconcerned about the pipeline,
but ultimately the way I feelabout that is the cream rises
and you want a certain type ofclient, Even if people that are
(02:45):
reasonable can understand whenyou explain to them why your
price is where it is.
When somebody gets my estimateand somebody receives a desk
estimate from me, eight timesout of ten there's a comment
about how detailed it is and howmuch time looks like it's been
(03:08):
spent in there, and part of thatis we've got stuff prebuilt in
the software, not only lineitems, but now with like copying
an estimate and then adjustingit from there.
So there's like an anincredible amount of detail in
the estimate.
Speaker 2 (03:20):
Yeah, and what.
What James is saying is just todouble down on the, on the
software, what you're talkingabout.
You can duplicate an estimate,you can.
We have job templates whereJames has built out like some
really detailed job templatesthat, hey, this is kind of our
kitchen renovation, this is ourbasement renovation, this is our
addition template that you canuse.
(03:40):
But the cool part that that wealso have is when you're
starting a new project, you cancopy any job you've ever done.
So if I, if I'm doing anaddition, it's like, oh, this is
just, like you know, statestreet that we did three months
ago, three years ago, you cansay, hey, I want to copy state
street and that's going to be mytemplate that I'm going to use.
So that allows you to instantly, on a $200,000 addition, have a
(04:05):
fully detailed scope thatyou're starting with and all you
got to do is edit it.
Yeah, right, so 20 seconds?
Speaker 1 (04:10):
Yep, 20 seconds.
I've already got somethingbuilt out that I need to tweak
now, yep, and you can spend anhour tweaking that, or two hours
for a $200,000 job, like ifyou've got the space and the
time, and that that's where someof this comes down is how much
time do you have to do something?
Speaker 2 (04:29):
And and there's an art to it too, cause it's like
you're you're reading the clientand how committed they were.
Speaker 1 (04:33):
Are they ready to go?
Did they come to you withdrawings?
Yeah, if they came to you withdrawings, taking time, take some
time because they are ready togo.
They're showing you that theyare, they're active.
When somebody doesn't havedrawings and they are kind of
we're thinking about doing this,we're thinking about doing that
, that's a slower approach andyou can kind of hold their hand
(04:55):
through that and it's going totake a lot more time to
materialize.
But if somebody comes to youwith with stuff they've already
spent five, six, $7,000 on,they're moving On the other end
of that.
Speaker 2 (05:06):
All the other contractors you're bidding
against are doing the same.
So they're all licking theirchops when they see drawings and
so you've got to be on top ofit.
But the good news is the otherpeople that are like, I don't
know, I'm doing an addition offthe side of my house, why, well,
my parents are going to move inand four to five years, and
we're trying to get more spacefor them.
Well, what are you looking todo, I don't know?
(05:27):
Just more space, right, and sothat when, when you're taking
your time, most contractors arelike not calling those people
back.
Yeah, so you, you have a littlemore leeway on that job to kind
of talk numbers and kind ofthrow some stuff out.
But really, that jobconsistency lands it where the
other one where you're gettingdrawings like here are our
blueprints, this is what wethink we're doing.
(05:49):
Can you put a price on it?
You got to be quick, you got totake the time, but they're
serious because someone'sgetting this job in the next two
weeks, someone they're going tosign with soon.
Speaker 1 (06:00):
Sorry, go ahead.
So you've got people that theymight tell you that they're.
A lot of other facets areimportant to them, but I am not.
I am not worried about goingafter people that are really
looking for the best price,because I'm going to price
things out so that we can getthe job done, the guys that work
(06:27):
for us are getting paid welland that we're making the profit
that we need to make.
Uh, when I build out anestimate and it has all this
detail and the client wants, uh,you know they already tell me
that they're working there.
They've got other bids comingin I always make it a point to
number one.
(06:48):
I'm not going to just send themthat estimate, I'm going to
review it with them because Iwant to talk through the notes
that I've already put in there.
And again, very, very often andthis isn't just smoke very,
very often when I'm talkingthrough this job with a client,
there's things that nobody elsehas talked through with them.
Because of that, they don'twant to.
(07:08):
They don't want their price tojump.
So I was talking with a guy theother day and this is a job
we're not going to land rightnow.
It might be down the road, buthe wanted to do essentially two
additions and nobody had spokenwith him about permits.
Nobody had spoken with himabout permits.
Nobody had spoken with himabout foundation.
Nobody had spoken with himabout foundation footers.
(07:31):
Nobody had spoke with him aboutLVLs.
It was just cosmetic buildsthat he was getting bids for
essentially.
So we talked through all ofthose things and you know my bid
was probably 60,000 over thenext closest person.
Yeah, that's a big chunk.
(07:52):
No, you're not going to convincesomebody to spend another
60,000 with you A full car thatthey're going to give you, Right
, If somebody else is going todo it for them for 60 less, it
is my job at that point to belike totally get it.
Here's what I would look for,because I don't see a way to get
this done for the price thatthey're talking about.
(08:14):
Are are we getting?
Are we are we?
Are you looking at this?
Apples to apples.
Look at the framing.
Look at the MEPs.
What are they talking about?
Have they detailed out?
Okay, yeah, You're going to doa new kitchen and things are
going to kind of stay wherethey're where they're at.
But even though we're justmoving the sink over a little
bit, this is a concrete slab.
(08:34):
We need to cut into theconcrete slab.
So, right away, we need to.
We need to talk with anengineer.
So, even if you're not doingthe additions just by the nature
of cutting into your slab, weneed to at least talk with an
engineer and make sure thatthere's nothing else that we
need to consider in this spot.
And that's a $5,000 bill rightthere.
There's all of those.
(08:56):
And then pre-construction, thepermitting process.
Do we have to talk with anarborist?
Do we have to talk with anarborist?
Because the same guy.
He had a pool with a pump andthen a heritage tree in his
backyard.
That was a concern.
That's another potentially$3,000, $4,000 bill.
So already I'm close to $10,000over the next guy because I'm
(09:18):
anticipating potentially thesethings coming up.
Now I can either put those inthe scope or I can just put the
notes in the scope and say Ihaven't accounted for this, but
this is a possibility.
I haven't accounted for this,but this is a possibility and
maybe that's the route to go.
Me personally, I like to put itall in there and when I'm
talking with them, explain wemight not need the arborist.
(09:41):
I want to at least have thearborist come out there.
It's going to cost $300 to havethem give us an opinion and
then, if there's anything elsethat they need to address, it's
going to go up from there.
We're going to bring theengineer out.
It's going to be $2,000 minimumto have them come out and give
us some sort of whatever and,depending on what they say, it's
going to go up from there.
(10:02):
If I don't put those prices in,I at least need to talk with
them about it.
That's just me.
I don't.
I don't want to compete againstthe people that are not going
to give the clients a heads upand just kind of lock them into
a position where now they'vespent however much in due
diligence, maybe they've given adown payment to somebody, and
(10:25):
then they're kind of in a potcommitted situation.
Yeah, I don't like workingunder those parameters.
So I get the frustration of themore accurate I am, the less
bids I'm landing.
Yeah, the way I think about itis the more accurate I am, the
less bids I'm landing.
But the cleaner clients thatI'm working with, yeah, and that
(10:47):
experience, when you don't havea lot of bad clients clogging
up your pipeline, the pipelinemoves a lot smoother.
Speaker 2 (10:57):
It just does, yeah, well.
And some of this starts withhaving a good reputation and
clients coming through the doorand having good marketing.
And that's what side of it,because you can't be picky.
If you got one bid, yeah right,and so that I think that's
where some guys run and like,well, that's good for you, that
you can do that.
It's a it, it's, it's more thanjust one thing.
(11:18):
This is an entire company thatwe have to have from a good
reputation because we'retreating people well and we're
doing things right and we'reclosing out the job well.
So then people are tellingtheir neighbors so their
neighbors saw the work that wedid and want to use us.
And right, there's, there'sit's a waterfall of of things
happening that that affect eachother.
Yeah, so it's, that's some ofit of.
(11:39):
It's great that you can pickand choose and bid high and lose
20%, like you could if I wascoaching James on trying to sell
more jobs.
You can dumb down some of yourestimates and come in at a lower
price and hit them with changeorders.
That's not how we do things andthat's good.
(12:01):
That's a choice that we make interms of like.
We'd rather make it perfect,have the detail and impress them
and work with someone who getsit, than be the lowest bid,
because if we're the lowest bid,we're going to get the lowest
people that just care aboutprice and don't care about
quality, and they want us to cutcorners until the end and then
they want us to go back and fixall the stuff that the corners
(12:23):
were cut on for free.
And so it's a.
If you're living at the bottomtrying to chase the lowest
common denominator or the lowestbid, you're going to stay there
because you're going to dealwith those people and you're
going to get a bad reputation.
It's like it's it waterfallsthe other way, right, right, and
so I think it's.
(12:44):
The hard part is to lose bids.
Right, like we had.
We had a, a, a job that that weall worked on together.
That was a $2.4 million newconstruction home, and we lost
it because the other people camein and, like our competition,
they went with a guy that bidlike 2 million and it's like,
yeah, we could bid it at 2million, like this is just
(13:05):
conceptual right now, like wecould be at 2 million if you
want us to be, but we bid it at2.4 because it's like we viewed
it when you built that estimate,you viewed it like if this was
my house.
I do built that estimate.
You viewed it like if this wasmy house, I'd do it this way and
I want it this way and I wantit nice, and this is your
retirement home and this is, andso the the reason that we lost
(13:26):
that job is the exact samereason that we win a lot of
other jobs, because you took thetime, the effort to view it as
your personal house, not tocheck a box, to send an estimate
out, cause it's gotta be outtoday, but to take the time,
build it out right and then wewalk them through it on a call
and talk through this and thisand this is how we're going to
do this.
And so I'd rather lose that jobthan land that job and then
have to change order the crapout of him up to 2.4, because
(13:49):
that's what we know that hereally wanted.
Yeah, right.
And so I think that's themindset that we're looking for
in the desk estimate phase andwhat you're doing there.
I think the other side of thisis what you mentioned earlier
and what we kind of assume, butmost guys don't do, is what are
we selling that customer.
(14:10):
If you're selling the customerthe lowest price, build your
estimate, whether it's a $10,000job or $2 million job.
If you're just selling on price, build the estimate, send it by
email over to them and let themsee the price.
If we're selling on ourknowledge, who we are, our
education, our ability to viewtheir home like us, don't send
(14:31):
them the estimate via email.
Set up a Zoom and let me showmy value and my thought and how
much I care about this projectand why I'm thinking and why I
price it this way on a Zoom call, like we do.
And so you get them on the call.
You walk them through theestimate and the footnote during
that call.
About 45 minutes in, as we getto the bottom of the estimate,
(14:54):
they can see their total.
But that's not what we'releading with, because that's not
what we want them to buy.
We want them to buy our thought, our ability to identify that
an arborist might be needed.
Speaker 1 (15:05):
We want them to the knowledge that we have in the
industry is why they want tospend more with us and the first
question you ask somebody whenyou're talking with them about
their project is what is thegoal?
Like, you ask somebody whenyou're talking with them about
their project is what is thegoal?
Like, what is the?
What is the end goal?
Like you were talking aboutearly might've been on the
previous podcast, but, um,you're trying to, you're doing
(15:26):
an addition, why?
Well, mom's moving in and yada,yada, yada.
Well, what's, what do we?
What do you need?
Is there ADA requirements here?
Like I don't know?
Okay, so let's talk about that.
Like, do we need to considerthat?
What?
How long are you going to livein the house?
Or is there?
Do we need to consider?
How much do we need to considerresale right now?
(15:46):
Is that a?
Is that?
Speaker 2 (15:48):
an imperative Access points.
Do we need to put an elevatorin if your parents, all of the
stuff that people don't thinkabout, they just?
I bid the blueprints you sentme.
Yeah Well, the blueprints arewrong.
Speaker 1 (15:57):
If you ask, if you ask what the goal is, and, as
you're building the scope out,there's a lot of notes that you
can put in there because youhave all the experience.
You're like well, have youconsidered this?
Have you considered this?
Have?
Have you?
Have you thought through whatyou're going to do for storage?
(16:19):
Have you thought throughparking, like all of these
things that don't show up on thearchitectural blueprints
because the client didn't knowto talk to the architect about
that.
The client, in the blueprintsthemselves, might have all this
prebuilt stuff that thearchitect just puts in there.
That's like have you readthrough this?
Do you know that they're?
They're wanting to same withthe, the $2.4 million job yeah,
(16:39):
there was.
That was value engineered onthe upside for energy efficiency
and green building.
Yeah, so all of the materialthey were calling out was like
top dollar material, and thatwas one of the and he didn't
know the response.
They were calling out was liketop dollar material.
Yeah, and that was one of the.
And he didn't know the response.
(17:01):
He didn't know that number one,that those things were included
, and he didn't know what heactually wanted.
Yeah, and so there was a lot ofthere's a lot of stuff like
that that you need to be able towalk clients through.
But the there's.
We talk about doing the threedifferent phases your desk
estimate, site estimate, siteestimate and then the final one,
and we've tried to startcoining this as the quote.
Speaker 2 (17:25):
So all of these are estimates.
Converts it from an estimate toa quote.
Speaker 1 (17:28):
So once we go, the desk estimate, site estimate and
then the quote, and so a lot ofpeople will ask you okay, well,
what is your?
What's the percentage changefrom your desk estimate to your
quote or your site estimate toyour quote?
And my response is always thesame I can't give you that
number because from the deskestimate to the quote, there are
(17:49):
so many changes that you'regoing to make that affect this,
this price, that it's not achange that I'm necessarily
making.
It's.
We are going through a processnow of figuring out.
You have a concept.
I know how to build whateveryou want.
Now we have to figure out whatthat budget is.
(18:12):
Yeah, that's, that's the gamehere.
We need to figure out what youactually want, because I can
build you what you're asking forfor 2 million.
I can probably build it for 1.8million, but the fact of the
matter is you have a thousanddecisions to make between here
and then, and all of those aregoing to affect the price.
(18:32):
So I can't give you apercentage.
But what I can tell you is, ifyou want to go ahead and spend
$2,000 to $5,000 in duediligence right now, we'll
forget all of the other stuff.
We're just going to get all thecrews out there and start
walking and see where we end upto other people.
(18:53):
I can give you my best numbers,but until I get to that final
quote price I'm not going to be.
I don't feel right abouttelling you hey, this is where
we're going to be, because Idon't know, I can't read your
mind.
Speaker 2 (19:07):
Yeah, if I price for a three tab shingle and you say
hey, I want slate roofing, okay.
(20:10):
That's three times as much, okay, so yeah, it depends on you and
how clear you are at this point.
I think something else that youknow if if you came on last
last retreat in January and orif you're coming on this this
coming retreat in January onething that I loved that we did
was you did a live desk estimatewith somebody.
(20:31):
We walked them through it andit took 45 minutes an hour and
you walk through and we allwatched, we put up on the TV and
watched it happen and I think alot of guys got a lot out of
that, because there is really anart to presenting, to talking
and to asking those questions.
And I think one thing that youdo well is you put detail in
(20:52):
your estimates.
But more importantly thanhaving everything detailed out
is I want five to 10 goodquestions on that call.
I don't want, I don't need youto think to price out and spend
three hours pricing out ADAupgrades and an elevator shaft
to get them to the second floor.
Just ask that question and justknow, hey, that's going to
(21:12):
increase this and that's goingto increase that, and just know,
hey, that's going to increasethis and that's going to
increase that.
I don't need to spend the timebuilding that because they
didn't request it, but they kindof made hints that their in
(21:34):
questions, zeroing in with themon what they're looking for and
by end of the call I have a fullconcept and the numbers I have
here about what we talked about.
Or, hey, I got to revise thisbecause you want this, you want
that, you went to slate roofing,you went to that.
Like, all of that stuff isgoing to change this price.
This is just a call for me topull more information out of
your brain and really startasking those questions that are
(21:56):
also making you question mycompetition.
Right, they're thinking, oh man, no one's asked me that.
Oh man, I didn't even thinkabout that.
Oh, I don't, I don't know ifthat's on the other guy's quote,
yeah, right.
And so then they go ask otherguys and say, hey, did you quote
for ADA?
Speaker 1 (22:16):
And the guy's like, oh, that guy doesn't understand.
Not only did I quote for 88.
Speaker 2 (22:18):
I quoted for 90a.
Yeah, I mean, but literallythere's contractors that are
like that, that don't understandthat and that's okay.
That's that should build, uh,in your client's brain like, oh,
this is why I should go withthis guy, this is why these guys
are the guys I should choose,because they've thought through
this, they know this, they'vedealt with this before, and so
(22:39):
it's not we're talking them intospending 60 grand more with us.
It's we're trying to show themthey're going to spend that 60
grand with somebody We'vethought about it ahead of time.
That guy's going to changeorder.
You, yeah, or I can get that 60down, but you've got to
sacrifice on what you're lookingfor because that's what that
guy's bidding to.
So I think the desk estimate isthe most difficult part of guys
(23:04):
coming in to grasp andunderstand what they should be
doing differently, because like,yeah, oh, I do that.
I kind of screen my, I vet myclients, make sure they're not
tire kickers, and then I'd shootthem an estimate and then we go
from there and it's like that'son what we're doing, this isn't
.
It does vet them going throughthis process, but I'm not
presenting them with numbers.
I'm presenting them with anexperience of how they're gonna
(23:26):
be treated, how they get mybrain thinking through their
project, how they get from us afull experience.
Oh, and there's also a price onthe bottom of this.
But let's talk through whatI've thought through on already
on your project.
Yeah Right, so I think that'sthe desk estimate phase.
That's competing.
I'm not competing with numbers,I'm competing for knowledge.
(23:46):
I'm competing for attention,and if someone values that,
they're going to be a greatclient for us and we're going to
grow this company.
If they don't value that andthey're like well, you're more
expensive, okay, and if I can't?
Speaker 1 (23:57):
if I go from the desk estimate and I can't get on
site because my price is toohigh, yeah, okay, like that's.
That's the really lackluster,not sexy answer to your initial
question is, for me, if I do adesk estimate and I feel pretty
confident about how I'm puttingthese together and I can't get
(24:19):
on site because my price is toohigh, I will plant that seed of
doubt for the other guys.
But it's not like well, I'mgonna.
Well, you gotta make sure thoseguys are gonna screw you.
It's like that's not, it, it'sI'm going to make those guys
better by giving my client someammo and maybe they don't go
(24:39):
with me.
Maybe they go with that guy,maybe they show my estimate to
that guy and say bid me thisexact thing and he comes $10,000
under.
I never get the opportunity.
Okay, that'll, that mighthappen, I don't know.
But at the end of the day, if Ican't get on site because my
price is too high from the jumpand that client's just looking
for best price, I'm going to be,I'm going to be battling that
(25:01):
person from the very front tothe very backend and I'll do, I
will, I will do it, I will do it.
But most of the time thosepeople, uh, they remove
themselves from the equation.
It's a lot less headache and wecan, and we can put all of our
efforts and energy to making theclients happy.
That are the ones that we want,yeah, and not the ones that
we're having to babysit thewhole time and say remember this
(25:23):
, remember that you have to getme the selections.
Yeah, we're invoicing.
Where's the money?
I invoiced you a week ago.
You haven't paid me.
We talked about this.
If me, we talked about this.
If you want to do that, let'sdo a draw system.
I don't.
There's too much going on.
There's too many variablesalready in our industry to add
on the headache of a client thatdoesn't give a shit about how
(25:46):
you do your thing.
Yeah, it's like I'm I.
It's a very frustrating aspectof the of the job when somebody
says to you well, that justseems really high for demo.
It's like based on what?
Based on what experience areyou?
You have to have a Bobcat comeout.
We have to have a guy thatknows what he's doing so he's
not tearing up your plumbing oryour gas line or breaking your
(26:08):
foundation.
He's got to dig this out.
Then we have to prep the slabspace, then we have to tie all
the metal together and make surethat the guy is reading the
engineer notes.
Well, this other guy bid $1,500for the demo.
That's great.
Who's doing it?
His 15-year-old cousin.
Three dudes from outside HomeDepot, that's what's going to
happen and then somethinghappens and change orders arise
(26:29):
from those types of situations.
Change orders arise from thosetypes of situations, yeah, like
if the person that's giving youthat other bid doesn't even have
in their foundation or gradingline that if we hit rock which
we were going to probably hitsomething, then there's going to
be change orders.
That's a problem.
Like you know that when you digin the ground, very seldom is
(26:53):
it perfect situations.
Yeah, and depending on whereyou are geographically like
Kentucky, ton of rock, nashville, ton of rock like there's gonna
be issues there.
So you should tell people aboutthat.
Where are you gonna be whereyou feel really confident that
you're not gonna hit anyunderground issues?
Speaker 2 (27:09):
Or we dug out a basement and it rained every day
for three months and so it keptfilling up like a pool and like
like that's all costs money topump that out and to reframe,
like there's so much, there's somany variables that they need
to understand.
But most guys aren't, given Iwould say also say I don't.
I don't sow seeds of doubt inin the competition.
(27:33):
I'm not going to talk crapabout these guys and like, oh,
I'll go.
I'm not trying to scare theperson, but my go-to line every
time when the person mentionsprice in somebody else, my go-to
line is hey, listen, I'm goingto be three to five percent
higher than the average guybecause of our quality, because
of the amount of communicationwe do, because of how we run our
(27:54):
project so well, and I'm notwilling to just pick guys up off
the street to do my work, but Ihire professionals with us.
I get it if we're three to 5%over somebody, if I'm 10 to 20%
over.
This isn't apples to apples.
They're not bidding stuff thatI've caught, and so let's sit
down and have a more thoroughdiving into the numbers of what
(28:15):
you're looking to get done.
And if I bid something, if Ibid demo for 9,000 and they bid
it for 1,500, there's somethingoff.
Either I overbid, because Ididn't understand what you
wanted, or they are way underbidding that and you're going to
end up paying maybe eight, likeyou will pay more, but eight
over nine, right?
(28:36):
And so I'm thinking through thisstuff and and, like you said,
like if they find value in mythought process and protecting
them, they're going to want togo with us, right?
And so I think that's kind ofthe seeds that I'm talking about
, sowing of doubt, of likethat's not accurate, like, like
this doesn't make sense, like Iunderstand if I bid it at 85,000
(28:56):
and they're at 79.
Yeah, we're, we're, we'rehigher value than than them and
that's okay.
That's.
That's the difference of asteak at a really nice steak
house and a steak at Chili's.
Like they're going to bedifferent prices for different
qualities for the same for steak, right.
And so trying to help themunderstand that side of it, as
opposed to being like, well,that guy's just going to screw
(29:17):
you, right.
Speaker 1 (29:17):
And that's exactly what I mean is not just, it's
not this you don't know whoyou're bidding against.
So letting them know, hey, beon the lookout for these things,
I'm saying that makes the guyyou're bidding against, makes
them better, because maybe theclient takes your scope and
shows them and they have to.
(29:37):
Okay, yeah, here here, here, atthe end of the day, if you, if
all of the people in our world,the better we all get
collectively about showing upthe way we say we're going to
show up, the better it is foreverybody.
Because it's no secret thatwhen you go into a job, you go
(30:02):
into a bid, you already have ading against you because of
you're a GC, you're a contractor.
These guys don't answer, theychange order.
You, they do this, they do that.
The better we can all get, theeasier that transition is for
everybody.
The better we can all get, theeasier that transition is for
everybody.
Speaker 2 (30:18):
Rising tides raise all ships, type of thing.
Yeah, I also one other notethat we haven't said part of
this process on the front endand we're going to talk about a
couple more things, but on thisdesk estimate that we're talking
about, one of the things that alot of people miss is it's even
if you do that first call well,I had a call, I did this.
It is all about the follow-up.
How quickly, how on top?
(30:40):
How do I manage it?
Most guys send out the bid,talk through it.
Hey, let me know if you needanything.
Three weeks later, hey, uh, Ineed work now.
Hey, can you?
Uh, where do you, where are youat with my bid?
Like, are we ready to moveforward?
It's like, no, no, they've.
They're dating someone elsewhile you're out of state.
(31:01):
Like, you're, you're out oftheir, their brain and they're
gone.
And they've had fourconversations with this other
contractor because he's on topof his communication with them.
A simple email, a simple phonecall.
Hey, just checking in on this,wanted to see.
I mean, and all we're doing islaying out our next steps, every
single contact point is layingout, trying to make them take
one step.
I'm not trying to get asignature today.
I'm trying to get you for aside estimate, I'm trying to get
(31:21):
you to do a zoom so we can talkthrough this.
I'm trying to get you to sitdown and let's talk through some
finishes that you're lookingfor, because that's the last
thing we need to finalize thisfrom an estimate quote, right,
and so all we're doing is tryingto take them on the next date,
not marry them, and that's whereguys miss it because they're so
busy and I'm on the job siteand I'm doing like if you had
(31:42):
twice a week.
Tuesdays and Fridays is where Ialways try to push guys.
I sit down and I email everysingle job on Tuesdays and
Fridays, whether it's an openestimate, all the way through a
invoices around.
I final payment.
Guys, if you can just do that,twice a week Tuesdays and
Fridays you sit down and emailthose and have those
conversations on every singlejob.
The person that you send a bidout is going to hear from you
(32:05):
Tuesday and then Friday and thenagain next week, and they got
three communications in eight tonine days from you, where every
other contractor out there isjust waiting for them to get
back to them, right, and so ifwe can increase that side of the
customer service, of planningthe seat in their head of oh man
, james is on top of this.
James, I mean this guy would begreat to work with because he's
(32:25):
communicating a lot with me andthat's what I need.
Once I start the project, everyaction is really telling the
story of what their experienceis going to be like when they
say yes to you.
So we're trying to get thoseactions as well.
So it's kind of lining all thisstuff up.
It's trying to do all of thisstuff well and all of this takes
space.
All of this takes some time andthat's okay.
(32:46):
Take the time to do that.
And I know you're out runningjobs.
I know you're out on job sites.
Sometimes some of you guys areprobably swinging hammers on job
sites.
It doesn't hurt to say hey,client, just so you know.
I know I'm doing the work hereTuesdays.
I don't get here till 11.
And so because I got to dooffice work and I got to
organize myself and clients like, oh great, I need you organized
, that's perfect.
(33:07):
And I say that before I startthe job.
And every Tuesday I show up at11 because I spent three hours
in the morning, four hours inthe morning, following up,
sending estimates, you know,touching base with all my
clients, ordering materials,making sure that everything's
going well.
So it's, it's not.
We're not looking for you tospend 40 hours a week in the in
the office.
Give me three to four hours onTuesday, two hours on Friday and
(33:31):
that's it.
That's going to solve a lot ofthis and sell more jobs for you.
Speaker 1 (33:34):
I think some guys are worried about seeming like
thirsty and like too needy tofollow up, and so one thing that
I always do is whether it's thedesk estimate or the site
estimate, wherever we're at inthe process, and they need some
time and they need to look itover, they want to redline it or
whatever.
I say, not a problem, Itypically follow up on Tuesdays
(33:58):
or Fridays or whatever it is.
I typically follow up once aweek.
Is that a good?
Would that be good for you, ordo you need extra time, like
some people?
Like it's summer, we're goingon vacation, we're doing this,
kids have baseball, girls havesoftball or volleyball, whatever
it is.
They've got travel sports andthey don't want to think about
(34:19):
it.
They just want to have that andjust stew on it.
Can?
Speaker 2 (34:23):
we talk November 1st.
Speaker 1 (34:25):
Not a problem, on my calendar, I sent you an invite
so that when they and if theydon't accept it, hey, can you
accept that invite.
I just want to make sure thatwe have a spot to touch base.
Yep, you can follow up then.
It's not thirsty, it'sprofessional.
You need to follow up with them, make it your responsibility
(34:47):
and ask them is it all rightwith you if I follow up in two
weeks?
Is it all right if I follow upwith you every week?
Speaker 2 (34:54):
We're out of town for the summer.
August 1st I'm going to sitdown and start looking kind of
thinking through this.
Once the kids get back inschool, you do the invite on the
calendar, like James said, youset it up and then you go to
their job in the software andyou put it on hold and what that
does it takes it off yourscreen.
You pick a date when you put iton hold as to when I want to
deal with this again and you'resetting up a task for that day.
(35:16):
So the end of July, cause we'rewe've already got on our
calendar for August 1st.
It pops back on my screen.
I get a task that pops up and Ijust say, hey, just excited to
talk with you on the 1st, threedays beforehand.
I'm going to send thatfollow-up email.
I'm going to re-engage, I'mgoing to look over that estimate
that popped up on my screen.
I'm going to handle it.
Speaker 1 (35:34):
I had someone pop on my task list today.
I forgot who they were.
I I don't remember their name,but they're on my task list for
today to follow up with themabout an estimate.
I don't remember what it was,but it's on there.
Speaker 2 (35:46):
Hi, hello, I'm James and you needed an estimate, I
think, along with thosefollow-ups and setting it and
not looking desperate.
The other thing that I alwayslean on is let the calendar be
the bad guy, not yourdesperation for needing work,
(36:07):
right.
And so it's always like, hey,our calendar is filling up and I
want to make sure that Ireserve a spot for you, because
we've talked about you wantingto get started in a few weeks
and I wanted to make sure thatthere was space for that.
But I also want to let you knowwe've got some other
commitments that are coming up.
So should we put you down tostart around then, or do you
need more time to think about it?
We'll push it off, right, andso I'm not desperate, I'm just
(36:27):
trying to protect you.
So we're ready for you, yeah,and if you go with that angle,
every single, I mean I don'tcare if I have no jobs on the
calendar, like hey, starting tofill up for next month, can.
So why don't we go ahead andhave a call next week to
finalize a figure out if this isgoing to be?
And so the calendar is the badguy and you're you're the good
(36:49):
guy, protecting them fromsomething bad happening from
them losing that spot Right, andso I don't reserve your spot on
the calendar until I get asignature on the estimate.
But I'm going to pencil you inbecause I know that you really
need this done and you gotfamily coming in for
Thanksgiving, so it's got to bedone by then and that those sort
of conversations to where it'snot a desperation, it's I'm
looking out for you typeconversation All right, now that
(37:11):
we're past the desk estimate,we've got that.
They like it.
You've gone on site On aaverage hundred thousand dollar
job, eighty thousand dollar job,whatever it is somewhere in
there.
You go on site, you print outyour desk estimate, not you.
You're sending it to yourproject managers.
(37:32):
But if it was you, we walk onsite with the printed out desk
estimate that we've already kindof discussed and gone over with
them.
We're not going to go over howto do a site estimate on this
podcast, but you go througheverything.
You deal with the customer onsite.
How much time are you spendingto revise it at that point?
Cause we're not at therevisions to convert it into a
quote with the signature, wherewe're doing the due diligence
(37:52):
and picking out finishes.
But what are you, what are youediting at that time and how are
we looking at pricing fortrying to make sure that our
pricing's there and we'reediting that where.
Where do you adjust pricing atthat point and what are you
doing like with the customer tolet them know and have those
conversations?
Speaker 1 (38:09):
Well, the biggest thing is on the desk estimate.
Most times you don't haveaccurate linear footages or
square footages.
Like this might be too much.
I think I have the luxury ofbeing able to spend more time on
these desk estimates than mostpeople, but I'm going like if
(38:31):
it's an addition, no, that's abad one.
If it's a renovation, newkitchen, new kitchen and it's
going to bleed into the livingroom.
So it's kind of a little messy.
I'm using windows.
I'm using windows, I'm usingcabinets, I'm using doors where
I know general sizes todetermine what is the linear
foot of this wall, cause it's aninterior wall.
(38:52):
If it's an exterior wall, I'mgetting on Google earth and I'm
measuring the You're sayingbefore the site estimate, before
the site estimate, I've gotGoogle earth pulled up.
Depending on what it is.
If it's something where again,$100,000 job, I'm going to spend
10 minutes on Google Earthmeasuring because I'm not on
site to get a realisticunderstanding of what that looks
(39:14):
like.
It's a lot harder to find onthe municipality website.
If they do have a layout inthere, it almost never has
anything that's like actionable.
So, getting on Google earth andbeing able to find here's the
linear footage of this exteriorwall or using just your general
understanding of that's a 36inch exterior door.
(39:34):
So that means this is probablyanother three, six, nine.
This is a 12 foot wall.
Knowing that can help you kindof narrow down.
What is the square footage offlooring needed for here and
what is the square footage ofsheetrock needed?
And once we do that we're goingto affect the ceiling.
It's going to be a new lightplan, so the whole kitchen
really needs to have thesheetrock pulled out.
So I'm just putting roughnumbers on my desk estimate.
(39:58):
When we get to a site estimatethe project manager yourself,
whoever's doing it, pulling tape, pulling tape, getting
quantities and looking at thenotes that we've put in
Sometimes you don't even know.
The client can't even tell youif they're on a slab or a crawl
space somehow, and that affectsyour pricing pretty considerably
(40:23):
, especially if you're movingutilities.
So the things that are, thereare certain things that you
cannot do on a desk estimate.
Those things need to beexecuted on a site estimate.
Do not wait until you're in duediligence to land the plane on
things that can be landed on thesite estimate.
(40:44):
So quantities, linear footages,square footages you know what's
in the attic, what's in thepanel?
Do we need larger panel what's?
Are there HVAC requirementsthat are going to increase
because of what we're doing?
What's the size of the currentunits?
Because your client's neverreally going to know and you can
send those to your HVAC techlike the big ticket items that
(41:07):
you can probably get a prettygood idea of.
Hey, we're doing a 400 squarefoot addition on this house.
It's going to be a nine footceiling.
Hey, hvac, we already have twounits on site.
It's a 3,500 square foot house.
It's going to become a 3,900square foot house.
Speaker 2 (41:28):
Take a picture of just the little tag on the HVAC
unit that has the model and theskew and like the age.
Speaker 1 (41:31):
What are we going to need?
Yeah, what are we going to needis would a mini split work?
What's the price differencebetween a mini split in this?
It'll take you five minutes tosend your HVAC guy an email that
essentially is like your clientreaching out to you for a desk
estimate.
Hey man, what rough.
I'm not holding you to it.
You need to come on site atsome point if we get close.
(41:51):
But give me that number.
Talk to your flooring guy.
We got a tile that needs to comeup, but the whole project
deserves a lot of flooring.
Can you give me a good deal ondemoing all this tile and
installing new flooring?
You can have some of thoseconversations before you get to
due diligence.
You don't have to be pennypinching your time if it's going
to be a five minute expensewhere you're actually getting
(42:14):
very actionable, goodinformation.
So the desk estimate to thesite estimate.
I think that's one of myfrustrations with the, when
project managers aren't lookingat the work that's been put in
on the desk estimate.
Hey, we need to answer thesequestions.
This isn't just to get a good.
You get on site and you justget a good feeling.
Speaker 2 (42:36):
Which, on our desk estimates, we'll have questions
in the description of the lineitem that we want the project
manager to look at.
Or if you're doing it yourself,you're going out and that, oh,
I got to ask about this Becauseall of the stuff you just ran
through is so difficult.
It's especially for the newerguys to think about.
Like oh, I didn't even askabout the HVAC, oh, I didn't
even think about that, right?
Oh, they sent me a picture ofthe kitchen but I didn line of
(42:58):
cabinets behind where they tookthe picture.
So we just added 14 newcabinets to the quote.
That I need to capture and talkwith the homeowner.
Like, hey, if you look on thequote, I did 20 cabinets.
I didn't realize you had 14over there, so we're going to
need about 34.
It's going to double yourcabinet expense, right?
Speaker 1 (43:16):
And if you don't tell , them that and then you do the
revision and you send it andthey're like your cabinets
jumped up a lot Bait and switch.
Well, I didn't see the oneslike what are you talking about?
You were there on site, like,yeah, I was there on site, but
the desk estimate I did.
You can't get into that becauseit's just, it's, it's it.
You only sound petty, yeah,when you're coming at them with
(43:38):
like well, no, no, becauseremember if the desk, you
remember at the desk no, no, youowe me that money Cause I
thought of reason to tell youthat you owe me the money.
Speaker 2 (43:46):
Yeah Right, that's how it feels to them.
Speaker 1 (43:48):
And so you do need to make sure that when there's
differences in the in the deskestimate to the site estimate,
that that's a conversation, thatthat is, that is, uh, not just
a sticker shock when they getthe revisions, but that as
you're walking through the scope, it's like this is different
than kind of what we talkedabout on the desk estimate.
Here's why and maybe that losesyou the job, but again I'd
(44:13):
rather lose it than deal withthat.
That's okay.
You are going to lose jobs andyou are going to quote, unquote,
waste time, but I've said it ahundred times, you got to find
areas where you can double upyour efforts, so it's not a loss
.
Every time you go out to a siteestimate, every time that you're
interacting with a client,there's things that you're
(44:35):
learning, there's things thatyou can put in your tool belt,
add to your arsenal, and maybethings that you're like we might
need to change our approach alittle bit on jobs like this,
because we keep running intothis same issue over and over,
where a site estimate reallyjust doesn't even make sense
right now because they don'thave a full understanding of
(44:58):
what they even want to do withthe renovation, what they even
want to do with with therenovation.
So maybe the conversation ismore if you are you going to do
this project, regard like you'regoing to do something, like,
yes, great, let's work with anarchitect and an engineer,
because you're not committing tome, I will, I will run this as
part of due diligence.
We'll break all this out.
(45:18):
We'll get you a really good bid.
We'll work with the architect,we'll work with the engineer,
but I can't give you alegitimate bid until I know what
we're doing precisely.
Yeah, because you think theclient thinks that it's just
well.
It can't change much.
Based on what they just told mefrom the desk estimate, that's
not true.
Yeah, if you want to do an, ifyou want to do an addition and
(45:42):
there's I mean going back to aneasy one the foundation is
sitting on top of a heritagetree or a boulder.
We either need to change theplan and move the foundation
(46:03):
over, or we need to bust thatconcrete up, or we need to talk
with the arborist about makingchanges here, and so on a
hundred thousand dollar job, youjump to 115, 120, that's a 15
to 20% increase on your budgetjust because of one very
innocuous thing that turns intoa pretty significant change.
Yeah.
Speaker 2 (46:20):
Well, I think it's.
It's a couple of things.
When we're talking about makingsure we keep our profit, is
it's okay to have those changeorders or the changes in the
estimate?
We aren't to change orders yet.
We haven't started.
You need to discuss it with theclient on site.
We need to talk through itbefore I leave the desk estimate
.
If I leave the desk estimate andI go back and I'm sitting there
working on building out thisestimate, I'm sorry.
(46:41):
If I leave the site estimateand I go back and I'm sitting
there working on building outthis estimate, I'm sorry.
If I leave the site estimateand I go back and I sit at my
computer, I'm going to revisewhat I had already written and I
realize all the cabinets aredoubling.
I'm not going to send it tothem hoping they don't notice.
I'm going to call them beforethey get my estimate and say,
hey, I'm sitting here working onrevising assessment right now.
I originally put 20 cabinets inhere but when I got to the site
(47:02):
I counted we're at 34 cabinetswe need.
I think I missed this from thephotos.
The photos I'm looking at thatyou sent me was only from one
angle, so I just wanted to youknow, are we doing that whole
wall behind you?
Do you still want to do that?
And so I'm asking themquestions like I don't want them
to be, to be a part of merealizing that the price is
(47:24):
doubling for the cabinets.
Speaker 1 (47:26):
Yeah, and then they also they don't know what you
know.
So, okay, that bank of cabinetsthat wasn't in the pictures
also has a bridge cabinets abovewith glass, and none of the
other cabinets have it.
And you're just like, do you,is that something?
You also want the bridgecabinets?
Yeah, I definitely want thebridge cabinets.
Is that more of like anaesthetic thing?
(47:46):
Are you actually going to usethat storage space?
I don't know Like you'll beshocked at how quickly people
backtrack on what they know thatthey want.
Yeah, when it's like, okay,bridge cabinets, that's not just
like one cabinet, you have yourfive cabinets here and then
that's five more cabinets aboveplus the glass inserts.
Speaker 2 (48:05):
So it'll come $4,000 to $5,000 extra Do you need?
Speaker 1 (48:08):
that in your butler pantry, where no one's seeing it
, and that's the space whereit's kind of like away from
people that you prepare things.
Yep.
No, you know, actually I don't.
That's not super important tome.
Great, why don't instead we?
You do want to go to theceiling, though We'll add some
trim, we'll save maybe 2000bucks.
Instead of spending five, we'llspend two and it'll look great.
(48:28):
It's just not going to have theway it looks right now.
Yep.
Speaker 2 (48:31):
Yep, you're giving them options so they can pick
good, better, best, like none,trim glass, like what do you?
How?
How nice do you want it?
And we're good with any of them.
But here are your price pointsas opposed to why bid 28,000 for
cabinets and now they want thatand so now my profit's dropping
because I got to do that and wedidn't really talk about it.
But I did bid for the cabinets.
I just didn't know that.
Speaker 1 (48:51):
And that's.
That's another thing that youreally need to lean into with
your project managers, becauseit doesn't matter I mean,
however long I've been doing,for whatever reason project
managers get on site with a deskestimate and if there's changes
they're reluctant.
They're like, yeah, I'm justconcerned, man, because the
(49:13):
price on the desk estimate likeI don't see how that's going to
work.
It's like that's okay, that'swhat the site estimate is for.
You're not locked in.
I'm not sending you out therewith a desk estimate saying come
back with this price.
I'm saying check me, keepmolding.
I don't want to be 100%.
There's no way I'm 100% right.
Speaker 2 (49:31):
Well, I think the mindset that we try to change in
, guys is most contractorscoming in or most project
managers coming in to work foryou have this mindset of this
client is purchasing a productfrom me and I told them how much
the product is, and so we'relocked in on that and so I owe
(49:52):
them the product.
I'm selling them cabinets.
I'm selling them a product.
I quoted them $28,000 for this.
They want a little more, but Ialready quoted them, and so
there's already been anagreement of exchange of goods
here.
And what we try to switch fromthat mindset is I am the guide
on the journey of a renovation.
I'm your renovation shaman andI am walking beside you, and I
(50:17):
am here as the professional,with all the knowledge and the
know-how and the connections inmy crews to execute your vision
with your money.
And so I want to view this as Iam your shaman, your guide.
So here are the options.
We can do no bridge cabinets.
We can do the trim for 2000.
We can do five.
(50:38):
I think this will look good, butthat's up to you how much you
want to spend on it.
And so I am not makingdecisions and this isn't a.
I'm selling you how much youwant to spend on it, and so I am
not making decisions.
And this isn't a I'm sellingyou.
I'm trying to talk you in, I'mtrying to exchange of goods.
You this isn't a shop that I'mselling you something at.
I am your guide of how we'respending your money and I'm
trying to save you money as wego along.
And it's a simple mindsetchange, but it changes
(51:01):
everything in terms of theestimate through the final
invoice as to how we're talkingabout things.
Change orders are disappointingfor me, not like hey, you owe
me more money, but like oh noguess what.
Speaker 1 (51:12):
It's not like yippee, this is a change order.
It's like, shoot, we got badnews and it's, and it's truly,
truly it's.
It's truly frustrating becauseit's like ah, we already built
out the timeline, we already didthis, we already talked with
these guys and now we got to.
It's going to throw a wrench init, but it is what it is.
They made a decision that'sdifferent.
All right, you know whatever,but it's not a.
(51:34):
You're from the desk estimateto the site estimate and
everything up until you get asignature and a down payment for
due diligence.
You are figuring out what theproduct is.
This isn't.
They haven't given it to you.
Whether they think so or not,there's a thousand questions you
have to ask and get to thebottom of before you can say,
(51:57):
okay, this is the product thatwe are talking about and this is
the price for that product.
Up until then, it's like I wanta car, okay.
Speaker 2 (52:06):
All right, 50,000.
New SUV coupe yeah, what colorPT Cruiser Ragtop.
Speaker 1 (52:11):
What are you looking for?
Speaker 2 (52:12):
Ragtop PT Cruiser is exactly what I'm looking for.
Speaker 1 (52:15):
Dude sorry side note when I was getting rid of that,
do you remember that Chevy whiteMalibu?
Yes, when I was getting rid ofthat car, I brought it in and
this guy was like I think I knowjust the car that you're
looking for.
It was like this.
It was like the ball pit of thecar they had to.
(52:35):
Someone had to sell it.
He brings out this rag toppurple PT cruiser and I was like
pull up another one baby.
Speaker 2 (52:43):
I don't like it, I don't.
I don't want to one up you.
But for the first year of ourmarriage my wife drove a PT
cruiser because she worked at areal estate office and they had
it wrapped and they said you candrive it for free and we needed
a car.
So we're like we'll take it forfree.
Speaker 1 (52:58):
I'm not a car guy, but that is the ugliest vehicle
I've ever seen.
Speaker 2 (53:03):
Anyways, sorry if you drive a PT Shoot there's people
listening to this but they'reawesome vehicles, high quality,
all right.
So landing the plane on thisone change order is kind of the
last part, where you lose moneyand drop the profit from the
estimate, right.
And so, with the mindset thatwe're talking about, it's okay
(53:27):
to hit people with change orders, as long as you do it before
the work gets done and in theright way, with options.
Whenever I come up with achange order, whenever there's a
change order that has to happenon a job, I look at the rest of
the job and say, okay, wherecan I sacrifice money elsewhere
to make up for this?
So, that being said, I'mlooking.
I'm like, oh, I know thatthey've, this is going to suck.
(53:49):
We found termites.
They're going to need to spendthree grand on this.
I'm looking around saying, hey,they have some really high end
granites that they're pickingout.
I'm going to go to them withsome lower end selection so it
could be a wash, so they don'thave to spend extra money.
Now, do they usually do that?
No, normally people are like,just fine, pay the extra, but
for them, I'm their guide to tryto get them down the road.
(54:09):
So I'm trying to think optionshere.
Okay, where can we not hurt youfinancially?
Where every other contractor islike cha-ching, cha-ching,
cha-ching, give me that extramoney For me?
I'm saying, hey, no, I'm tryingto save you money here.
We could do that if you wereokay with downgrading that.
They're going to say, no,that's fine, let's keep that.
I understand there's termites,that's fine, that's going to
(54:29):
happen.
So I am again the mindset of I'myour guide, I'm the leader here
.
I always the metaphor I've saida hundred times I'm driving a
car and I want my client to sitin the passenger seat and so I'm
saying, hey, we're driving tothe destination.
They say, hey, turn left hereand say, well, actually, I know
(54:50):
there's construction on thisroad, we're going to go to the
next one and turn left.
If I'm steering and driving,we're on the journey together,
though I'm not outside thevehicle.
I'm not trying to me and mycrews versus them as a customer,
but instead I am theirrepresentative in getting this
done, and I view it that way.
The conversations change, theattitudes change, the way that
we treat each other changes towhere they have a really good
(55:12):
experience because I'm caringfor them and I'm guiding them
down that and at the same time,I'm not losing profit, because
they understand it, because myverbiage is not hey, you owe me
money and now we're clashing andthey're not going to pay me,
but instead like, oh, there'shonestly, like I missed
something on the estimate.
I didn't realize we needed this.
If we would have seen that wewould have had to charge you
(55:34):
then it would have been on there.
I've got to charge for it.
I'm going to do this, this andthis.
I'm going to cut the price downa little bit, but it's
something that we need to addonto the quote.
Right, those are the hard ones.
It's easy to talk about termites.
It's hard to say I didn't putshingles on the quote.
I know we were doing anaddition and I didn't put
roofing anywhere for thataddition.
We missed it and we got.
(55:55):
We got to add it on this, whatI'm going to do.
But that conversation is has tobe had in the front end, not you
owe me money, tough luck, yougot you, you.
You now have a roof, right?
You want me to put no roof onthat, like?
Instead it's a.
Hey, I missed it, you know.
This is why I wanted both eyesto look through and review the
quote, but we don't have a roofroofing call for anywhere.
(56:15):
If you can find it in here,we'll cover it, but I can't just
give free roofs, and thatshould have been on the quote,
right?
So having those conversationsas early as possible where
you're, where you'redisappointed with them, um
allows you to charge for thestuff that you're doing, make
the profit of what you're doing,be able to stick to what the
agreement was.
So any other comments aboutother vehicles that you don't
(56:37):
like.
Speaker 1 (56:40):
Um no, I mean, suzuki Samurai is a cool car, cool car
, uh, what was your firstvehicle you ever drove?
Jeep wrangler, oh you, hey, Ihad to have the transmission
rebuilt.
That's right, didn't it getstolen?
My sister left it somewhere,shady yeah, and when I needed it
the most it was gone.
Speaker 2 (57:00):
It was gone I drove a geo storm.
That's another cool car.
It was not too bad.
It got crushed like a soda canin a very, very minor accident.
Anyways, thanks for joining usthis week.
If you want to talk what?
Car talk?
Car talk uh, that's our nextone.
We're going to record the.
(57:20):
If you guys want to talk I lovethat hop on a on a phone call
with you.
If you go to ProStruck360.comand go to contact us, we can
schedule a 30 minute call whereme and you talk directly.
Talk about your business, talkabout how you can grow.
Love to chat with you.
If you want to talk, do that.
If you want some software theProStruck360 software go to
ProStruck360.com.
Some software the ProTruck360software go to ProTruck360.com.
(57:42):
Free trial for two weeks.
It's month to month, nocontracts.
It's $199 or $89 depending onwhat level.
You need Really good software.
Hop on it.
Thanks so much for listening.
We'll talk to you next week.
Bye, bye, bye, bye, bye, bye.
Welcome to Contractor Cuts, where we cover the good,
the bad and the ugly of growinga successful contracting company
.
Speaker 2 (00:13):
Hi, welcome to Contractor Cuts.
My name is Clark Turner, I'mJames McConnell.
Thanks for joining us againthis week.
So today we are talking aboutestimating for profit.
How do you build your estimates?
How do we make profit?
How do you price out a job?
And the main thing that we'recovering, or that we're trying
to solve, is where, on the scale, do you put your pricing from?
(00:38):
I'm losing a lot of jobsbecause I'm pricing to the
profit I want to make versus I'mworking for too cheap, versus
I'm submitting bids knowing I'mgoing to change order the crap
out of this person, right?
And that's who I'm competingwith.
And so we're going to talkabout pricing, how to price
estimates, how to handle it, andthen we're going to walk
through every single stage in ajob that pricing comes up and
(01:02):
how we deal with it differently.
So we'll we'll kind of gothrough that.
So, starting off, though, james,I'm going to ask you, cause you
do a ton of pricing.
You, you are like the estimatorof all estimators.
In my opinion, you're reallygood at building estimates and
being being like Mr Estimator.
(01:22):
We'll get you a hat.
Stop it.
When you're building anestimate, I mean, I know you
don't think through competitionand what they're bidding.
You are bidding for you, right.
You are bidding for what we cando it for.
But what is?
How do you combat the guys thatare low-balling change orders?
(01:44):
How do you combat the bids thatjust come in lower than you and
they're just one-man show thatisn't making profit.
He's just getting paid for histime and that's it.
How do you build your estimateto combat that?
And then also, how do you dealwith the customer to combat it
as well.
Speaker 1 (02:01):
Okay, it's a lot of questions, no, but I understand
and I think I can answer thisthe and again.
This might be a littlecontroversial and I think
there's times maybe in the lifecycle of a company or a season
where you're like we're gonna,we're gonna shift a little bit,
we're going to make a little bitof an adjustment here because
(02:22):
we're not landing enough bids.
I'mids I'm a little bitconcerned about the pipeline,
but ultimately the way I feelabout that is the cream rises
and you want a certain type ofclient, Even if people that are
(02:45):
reasonable can understand whenyou explain to them why your
price is where it is.
When somebody gets my estimateand somebody receives a desk
estimate from me, eight timesout of ten there's a comment
about how detailed it is and howmuch time looks like it's been
(03:08):
spent in there, and part of thatis we've got stuff prebuilt in
the software, not only lineitems, but now with like copying
an estimate and then adjustingit from there.
So there's like an anincredible amount of detail in
the estimate.
Speaker 2 (03:20):
Yeah, and what.
What James is saying is just todouble down on the, on the
software, what you're talkingabout.
You can duplicate an estimate,you can.
We have job templates whereJames has built out like some
really detailed job templatesthat, hey, this is kind of our
kitchen renovation, this is ourbasement renovation, this is our
addition template that you canuse.
(03:40):
But the cool part that that wealso have is when you're
starting a new project, you cancopy any job you've ever done.
So if I, if I'm doing anaddition, it's like, oh, this is
just, like you know, statestreet that we did three months
ago, three years ago, you cansay, hey, I want to copy state
street and that's going to be mytemplate that I'm going to use.
So that allows you to instantly, on a $200,000 addition, have a
(04:05):
fully detailed scope thatyou're starting with and all you
got to do is edit it.
Yeah, right, so 20 seconds?
Speaker 1 (04:10):
Yep, 20 seconds.
I've already got somethingbuilt out that I need to tweak
now, yep, and you can spend anhour tweaking that, or two hours
for a $200,000 job, like ifyou've got the space and the
time, and that that's where someof this comes down is how much
time do you have to do something?
Speaker 2 (04:29):
And and there's an art to it too, cause it's like
you're you're reading the clientand how committed they were.
Speaker 1 (04:33):
Are they ready to go?
Did they come to you withdrawings?
Yeah, if they came to you withdrawings, taking time, take some
time because they are ready togo.
They're showing you that theyare, they're active.
When somebody doesn't havedrawings and they are kind of
we're thinking about doing this,we're thinking about doing that
, that's a slower approach andyou can kind of hold their hand
(04:55):
through that and it's going totake a lot more time to
materialize.
But if somebody comes to youwith with stuff they've already
spent five, six, $7,000 on,they're moving On the other end
of that.
Speaker 2 (05:06):
All the other contractors you're bidding
against are doing the same.
So they're all licking theirchops when they see drawings and
so you've got to be on top ofit.
But the good news is the otherpeople that are like, I don't
know, I'm doing an addition offthe side of my house, why, well,
my parents are going to move inand four to five years, and
we're trying to get more spacefor them.
Well, what are you looking todo, I don't know?
(05:27):
Just more space, right, and sothat when, when you're taking
your time, most contractors arelike not calling those people
back.
Yeah, so you, you have a littlemore leeway on that job to kind
of talk numbers and kind ofthrow some stuff out.
But really, that jobconsistency lands it where the
other one where you're gettingdrawings like here are our
blueprints, this is what wethink we're doing.
(05:49):
Can you put a price on it?
You got to be quick, you got totake the time, but they're
serious because someone'sgetting this job in the next two
weeks, someone they're going tosign with soon.
Speaker 1 (06:00):
Sorry, go ahead.
So you've got people that theymight tell you that they're.
A lot of other facets areimportant to them, but I am not.
I am not worried about goingafter people that are really
looking for the best price,because I'm going to price
things out so that we can getthe job done, the guys that work
(06:27):
for us are getting paid welland that we're making the profit
that we need to make.
Uh, when I build out anestimate and it has all this
detail and the client wants, uh,you know they already tell me
that they're working there.
They've got other bids comingin I always make it a point to
number one.
(06:48):
I'm not going to just send themthat estimate, I'm going to
review it with them because Iwant to talk through the notes
that I've already put in there.
And again, very, very often andthis isn't just smoke very,
very often when I'm talkingthrough this job with a client,
there's things that nobody elsehas talked through with them.
Because of that, they don'twant to.
(07:08):
They don't want their price tojump.
So I was talking with a guy theother day and this is a job
we're not going to land rightnow.
It might be down the road, buthe wanted to do essentially two
additions and nobody had spokenwith him about permits.
Nobody had spoken with himabout permits.
Nobody had spoken with himabout foundation.
Nobody had spoken with himabout foundation footers.
(07:31):
Nobody had spoke with him aboutLVLs.
It was just cosmetic buildsthat he was getting bids for
essentially.
So we talked through all ofthose things and you know my bid
was probably 60,000 over thenext closest person.
Yeah, that's a big chunk.
(07:52):
No, you're not going to convincesomebody to spend another
60,000 with you A full car thatthey're going to give you, Right
, If somebody else is going todo it for them for 60 less, it
is my job at that point to belike totally get it.
Here's what I would look for,because I don't see a way to get
this done for the price thatthey're talking about.
(08:14):
Are are we getting?
Are we are we?
Are you looking at this?
Apples to apples.
Look at the framing.
Look at the MEPs.
What are they talking about?
Have they detailed out?
Okay, yeah, You're going to doa new kitchen and things are
going to kind of stay wherethey're where they're at.
But even though we're justmoving the sink over a little
bit, this is a concrete slab.
(08:34):
We need to cut into theconcrete slab.
So, right away, we need to.
We need to talk with anengineer.
So, even if you're not doingthe additions just by the nature
of cutting into your slab, weneed to at least talk with an
engineer and make sure thatthere's nothing else that we
need to consider in this spot.
And that's a $5,000 bill rightthere.
There's all of those.
(08:56):
And then pre-construction, thepermitting process.
Do we have to talk with anarborist?
Do we have to talk with anarborist?
Because the same guy.
He had a pool with a pump andthen a heritage tree in his
backyard.
That was a concern.
That's another potentially$3,000, $4,000 bill.
So already I'm close to $10,000over the next guy because I'm
(09:18):
anticipating potentially thesethings coming up.
Now I can either put those inthe scope or I can just put the
notes in the scope and say Ihaven't accounted for this, but
this is a possibility.
I haven't accounted for this,but this is a possibility and
maybe that's the route to go.
Me personally, I like to put itall in there and when I'm
talking with them, explain wemight not need the arborist.
(09:41):
I want to at least have thearborist come out there.
It's going to cost $300 to havethem give us an opinion and
then, if there's anything elsethat they need to address, it's
going to go up from there.
We're going to bring theengineer out.
It's going to be $2,000 minimumto have them come out and give
us some sort of whatever and,depending on what they say, it's
going to go up from there.
(10:02):
If I don't put those prices in,I at least need to talk with
them about it.
That's just me.
I don't.
I don't want to compete againstthe people that are not going
to give the clients a heads upand just kind of lock them into
a position where now they'vespent however much in due
diligence, maybe they've given adown payment to somebody, and
(10:25):
then they're kind of in a potcommitted situation.
Yeah, I don't like workingunder those parameters.
So I get the frustration of themore accurate I am, the less
bids I'm landing.
Yeah, the way I think about itis the more accurate I am, the
less bids I'm landing.
But the cleaner clients thatI'm working with, yeah, and that
(10:47):
experience, when you don't havea lot of bad clients clogging
up your pipeline, the pipelinemoves a lot smoother.
Speaker 2 (10:57):
It just does, yeah, well.
And some of this starts withhaving a good reputation and
clients coming through the doorand having good marketing.
And that's what side of it,because you can't be picky.
If you got one bid, yeah right,and so that I think that's
where some guys run and like,well, that's good for you, that
you can do that.
It's a it, it's, it's more thanjust one thing.
(11:18):
This is an entire company thatwe have to have from a good
reputation because we'retreating people well and we're
doing things right and we'reclosing out the job well.
So then people are tellingtheir neighbors so their
neighbors saw the work that wedid and want to use us.
And right, there's, there'sit's a waterfall of of things
happening that that affect eachother.
Yeah, so it's, that's some ofit of.
(11:39):
It's great that you can pickand choose and bid high and lose
20%, like you could if I wascoaching James on trying to sell
more jobs.
You can dumb down some of yourestimates and come in at a lower
price and hit them with changeorders.
That's not how we do things andthat's good.
(12:01):
That's a choice that we make interms of like.
We'd rather make it perfect,have the detail and impress them
and work with someone who getsit, than be the lowest bid,
because if we're the lowest bid,we're going to get the lowest
people that just care aboutprice and don't care about
quality, and they want us to cutcorners until the end and then
they want us to go back and fixall the stuff that the corners
(12:23):
were cut on for free.
And so it's a.
If you're living at the bottomtrying to chase the lowest
common denominator or the lowestbid, you're going to stay there
because you're going to dealwith those people and you're
going to get a bad reputation.
It's like it's it waterfallsthe other way, right, right, and
so I think it's.
(12:44):
The hard part is to lose bids.
Right, like we had.
We had a, a, a job that that weall worked on together.
That was a $2.4 million newconstruction home, and we lost
it because the other people camein and, like our competition,
they went with a guy that bidlike 2 million and it's like,
yeah, we could bid it at 2million, like this is just
(13:05):
conceptual right now, like wecould be at 2 million if you
want us to be, but we bid it at2.4 because it's like we viewed
it when you built that estimate,you viewed it like if this was
my house.
I do built that estimate.
You viewed it like if this wasmy house, I'd do it this way and
I want it this way and I wantit nice, and this is your
retirement home and this is, andso the the reason that we lost
(13:26):
that job is the exact samereason that we win a lot of
other jobs, because you took thetime, the effort to view it as
your personal house, not tocheck a box, to send an estimate
out, cause it's gotta be outtoday, but to take the time,
build it out right and then wewalk them through it on a call
and talk through this and thisand this is how we're going to
do this.
And so I'd rather lose that jobthan land that job and then
have to change order the crapout of him up to 2.4, because
(13:49):
that's what we know that hereally wanted.
Yeah, right.
And so I think that's themindset that we're looking for
in the desk estimate phase andwhat you're doing there.
I think the other side of thisis what you mentioned earlier
and what we kind of assume, butmost guys don't do, is what are
we selling that customer.
(14:10):
If you're selling the customerthe lowest price, build your
estimate, whether it's a $10,000job or $2 million job.
If you're just selling on price, build the estimate, send it by
email over to them and let themsee the price.
If we're selling on ourknowledge, who we are, our
education, our ability to viewtheir home like us, don't send
(14:31):
them the estimate via email.
Set up a Zoom and let me showmy value and my thought and how
much I care about this projectand why I'm thinking and why I
price it this way on a Zoom call, like we do.
And so you get them on the call.
You walk them through theestimate and the footnote during
that call.
About 45 minutes in, as we getto the bottom of the estimate,
(14:54):
they can see their total.
But that's not what we'releading with, because that's not
what we want them to buy.
We want them to buy our thought, our ability to identify that
an arborist might be needed.
Speaker 1 (15:05):
We want them to the knowledge that we have in the
industry is why they want tospend more with us and the first
question you ask somebody whenyou're talking with them about
their project is what is thegoal?
Like, you ask somebody whenyou're talking with them about
their project is what is thegoal?
Like, what is the?
What is the end goal?
Like you were talking aboutearly might've been on the
previous podcast, but, um,you're trying to, you're doing
(15:26):
an addition, why?
Well, mom's moving in and yada,yada, yada.
Well, what's, what do we?
What do you need?
Is there ADA requirements here?
Like I don't know?
Okay, so let's talk about that.
Like, do we need to considerthat?
What?
How long are you going to livein the house?
Or is there?
Do we need to consider?
How much do we need to considerresale right now?
(15:46):
Is that a?
Is that?
Speaker 2 (15:48):
an imperative Access points.
Do we need to put an elevatorin if your parents, all of the
stuff that people don't thinkabout, they just?
I bid the blueprints you sentme.
Yeah Well, the blueprints arewrong.
Speaker 1 (15:57):
If you ask, if you ask what the goal is, and, as
you're building the scope out,there's a lot of notes that you
can put in there because youhave all the experience.
You're like well, have youconsidered this?
Have you considered this?
Have?
Have you?
Have you thought through whatyou're going to do for storage?
(16:19):
Have you thought throughparking, like all of these
things that don't show up on thearchitectural blueprints
because the client didn't knowto talk to the architect about
that.
The client, in the blueprintsthemselves, might have all this
prebuilt stuff that thearchitect just puts in there.
That's like have you readthrough this?
Do you know that they're?
They're wanting to same withthe, the $2.4 million job yeah,
(16:39):
there was.
That was value engineered onthe upside for energy efficiency
and green building.
Yeah, so all of the materialthey were calling out was like
top dollar material, and thatwas one of the and he didn't
know the response.
They were calling out was liketop dollar material.
Yeah, and that was one of the.
And he didn't know the response.
(17:01):
He didn't know that number one,that those things were included
, and he didn't know what heactually wanted.
Yeah, and so there was a lot ofthere's a lot of stuff like
that that you need to be able towalk clients through.
But the there's.
We talk about doing the threedifferent phases your desk
estimate, site estimate, siteestimate and then the final one,
and we've tried to startcoining this as the quote.
Speaker 2 (17:25):
So all of these are estimates.
Converts it from an estimate toa quote.
Speaker 1 (17:28):
So once we go, the desk estimate, site estimate and
then the quote, and so a lot ofpeople will ask you okay, well,
what is your?
What's the percentage changefrom your desk estimate to your
quote or your site estimate toyour quote?
And my response is always thesame I can't give you that
number because from the deskestimate to the quote, there are
(17:49):
so many changes that you'regoing to make that affect this,
this price, that it's not achange that I'm necessarily
making.
It's.
We are going through a processnow of figuring out.
You have a concept.
I know how to build whateveryou want.
Now we have to figure out whatthat budget is.
(18:12):
Yeah, that's, that's the gamehere.
We need to figure out what youactually want, because I can
build you what you're asking forfor 2 million.
I can probably build it for 1.8million, but the fact of the
matter is you have a thousanddecisions to make between here
and then, and all of those aregoing to affect the price.
(18:32):
So I can't give you apercentage.
But what I can tell you is, ifyou want to go ahead and spend
$2,000 to $5,000 in duediligence right now, we'll
forget all of the other stuff.
We're just going to get all thecrews out there and start
walking and see where we end upto other people.
(18:53):
I can give you my best numbers,but until I get to that final
quote price I'm not going to be.
I don't feel right abouttelling you hey, this is where
we're going to be, because Idon't know, I can't read your
mind.
Speaker 2 (19:07):
Yeah, if I price for a three tab shingle and you say
hey, I want slate roofing, okay.
(20:10):
That's three times as much, okay, so yeah, it depends on you and
how clear you are at this point.
I think something else that youknow if if you came on last
last retreat in January and orif you're coming on this this
coming retreat in January onething that I loved that we did
was you did a live desk estimatewith somebody.
(20:31):
We walked them through it andit took 45 minutes an hour and
you walk through and we allwatched, we put up on the TV and
watched it happen and I think alot of guys got a lot out of
that, because there is really anart to presenting, to talking
and to asking those questions.
And I think one thing that youdo well is you put detail in
(20:52):
your estimates.
But more importantly thanhaving everything detailed out
is I want five to 10 goodquestions on that call.
I don't want, I don't need youto think to price out and spend
three hours pricing out ADAupgrades and an elevator shaft
to get them to the second floor.
Just ask that question and justknow, hey, that's going to
(21:12):
increase this and that's goingto increase that, and just know,
hey, that's going to increasethis and that's going to
increase that.
I don't need to spend the timebuilding that because they
didn't request it, but they kindof made hints that their in
(21:34):
questions, zeroing in with themon what they're looking for and
by end of the call I have a fullconcept and the numbers I have
here about what we talked about.
Or, hey, I got to revise thisbecause you want this, you want
that, you went to slate roofing,you went to that.
Like, all of that stuff isgoing to change this price.
This is just a call for me topull more information out of
your brain and really startasking those questions that are
(21:56):
also making you question mycompetition.
Right, they're thinking, oh man, no one's asked me that.
Oh man, I didn't even thinkabout that.
Oh, I don't, I don't know ifthat's on the other guy's quote,
yeah, right.
And so then they go ask otherguys and say, hey, did you quote
for ADA?
Speaker 1 (22:16):
And the guy's like, oh, that guy doesn't understand.
Not only did I quote for 88.
Speaker 2 (22:18):
I quoted for 90a.
Yeah, I mean, but literallythere's contractors that are
like that, that don't understandthat and that's okay.
That's that should build, uh,in your client's brain like, oh,
this is why I should go withthis guy, this is why these guys
are the guys I should choose,because they've thought through
this, they know this, they'vedealt with this before, and so
(22:39):
it's not we're talking them intospending 60 grand more with us.
It's we're trying to show themthey're going to spend that 60
grand with somebody We'vethought about it ahead of time.
That guy's going to changeorder.
You, yeah, or I can get that 60down, but you've got to
sacrifice on what you're lookingfor because that's what that
guy's bidding to.
So I think the desk estimate isthe most difficult part of guys
(23:04):
coming in to grasp andunderstand what they should be
doing differently, because like,yeah, oh, I do that.
I kind of screen my, I vet myclients, make sure they're not
tire kickers, and then I'd shootthem an estimate and then we go
from there and it's like that'son what we're doing, this isn't
.
It does vet them going throughthis process, but I'm not
presenting them with numbers.
I'm presenting them with anexperience of how they're gonna
(23:26):
be treated, how they get mybrain thinking through their
project, how they get from us afull experience.
Oh, and there's also a price onthe bottom of this.
But let's talk through whatI've thought through on already
on your project.
Yeah Right, so I think that'sthe desk estimate phase.
That's competing.
I'm not competing with numbers,I'm competing for knowledge.
(23:46):
I'm competing for attention,and if someone values that,
they're going to be a greatclient for us and we're going to
grow this company.
If they don't value that andthey're like well, you're more
expensive, okay, and if I can't?
Speaker 1 (23:57):
if I go from the desk estimate and I can't get on
site because my price is toohigh, yeah, okay, like that's.
That's the really lackluster,not sexy answer to your initial
question is, for me, if I do adesk estimate and I feel pretty
confident about how I'm puttingthese together and I can't get
(24:19):
on site because my price is toohigh, I will plant that seed of
doubt for the other guys.
But it's not like well, I'mgonna.
Well, you gotta make sure thoseguys are gonna screw you.
It's like that's not, it, it'sI'm going to make those guys
better by giving my client someammo and maybe they don't go
(24:39):
with me.
Maybe they go with that guy,maybe they show my estimate to
that guy and say bid me thisexact thing and he comes $10,000
under.
I never get the opportunity.
Okay, that'll, that mighthappen, I don't know.
But at the end of the day, if Ican't get on site because my
price is too high from the jumpand that client's just looking
for best price, I'm going to be,I'm going to be battling that
(25:01):
person from the very front tothe very backend and I'll do, I
will, I will do it, I will do it.
But most of the time thosepeople, uh, they remove
themselves from the equation.
It's a lot less headache and wecan, and we can put all of our
efforts and energy to making theclients happy.
That are the ones that we want,yeah, and not the ones that
we're having to babysit thewhole time and say remember this
(25:23):
, remember that you have to getme the selections.
Yeah, we're invoicing.
Where's the money?
I invoiced you a week ago.
You haven't paid me.
We talked about this.
If me, we talked about this.
If you want to do that, let'sdo a draw system.
I don't.
There's too much going on.
There's too many variablesalready in our industry to add
on the headache of a client thatdoesn't give a shit about how
(25:46):
you do your thing.
Yeah, it's like I'm I.
It's a very frustrating aspectof the of the job when somebody
says to you well, that justseems really high for demo.
It's like based on what?
Based on what experience areyou?
You have to have a Bobcat comeout.
We have to have a guy thatknows what he's doing so he's
not tearing up your plumbing oryour gas line or breaking your
(26:08):
foundation.
He's got to dig this out.
Then we have to prep the slabspace, then we have to tie all
the metal together and make surethat the guy is reading the
engineer notes.
Well, this other guy bid $1,500for the demo.
That's great.
Who's doing it?
His 15-year-old cousin.
Three dudes from outside HomeDepot, that's what's going to
happen and then somethinghappens and change orders arise
(26:29):
from those types of situations.
Change orders arise from thosetypes of situations, yeah, like
if the person that's giving youthat other bid doesn't even have
in their foundation or gradingline that if we hit rock which
we were going to probably hitsomething, then there's going to
be change orders.
That's a problem.
Like you know that when you digin the ground, very seldom is
(26:53):
it perfect situations.
Yeah, and depending on whereyou are geographically like
Kentucky, ton of rock, nashville, ton of rock like there's gonna
be issues there.
So you should tell people aboutthat.
Where are you gonna be whereyou feel really confident that
you're not gonna hit anyunderground issues?
Speaker 2 (27:09):
Or we dug out a basement and it rained every day
for three months and so it keptfilling up like a pool and like
like that's all costs money topump that out and to reframe,
like there's so much, there's somany variables that they need
to understand.
But most guys aren't, given Iwould say also say I don't.
I don't sow seeds of doubt inin the competition.
(27:33):
I'm not going to talk crapabout these guys and like, oh,
I'll go.
I'm not trying to scare theperson, but my go-to line every
time when the person mentionsprice in somebody else, my go-to
line is hey, listen, I'm goingto be three to five percent
higher than the average guybecause of our quality, because
of the amount of communicationwe do, because of how we run our
(27:54):
project so well, and I'm notwilling to just pick guys up off
the street to do my work, but Ihire professionals with us.
I get it if we're three to 5%over somebody, if I'm 10 to 20%
over.
This isn't apples to apples.
They're not bidding stuff thatI've caught, and so let's sit
down and have a more thoroughdiving into the numbers of what
(28:15):
you're looking to get done.
And if I bid something, if Ibid demo for 9,000 and they bid
it for 1,500, there's somethingoff.
Either I overbid, because Ididn't understand what you
wanted, or they are way underbidding that and you're going to
end up paying maybe eight, likeyou will pay more, but eight
over nine, right?
(28:36):
And so I'm thinking through thisstuff and and, like you said,
like if they find value in mythought process and protecting
them, they're going to want togo with us, right?
And so I think that's kind ofthe seeds that I'm talking about
, sowing of doubt, of likethat's not accurate, like, like
this doesn't make sense, like Iunderstand if I bid it at 85,000
(28:56):
and they're at 79.
Yeah, we're, we're, we'rehigher value than than them and
that's okay.
That's.
That's the difference of asteak at a really nice steak
house and a steak at Chili's.
Like they're going to bedifferent prices for different
qualities for the same for steak, right.
And so trying to help themunderstand that side of it, as
opposed to being like, well,that guy's just going to screw
(29:17):
you, right.
Speaker 1 (29:17):
And that's exactly what I mean is not just, it's
not this you don't know whoyou're bidding against.
So letting them know, hey, beon the lookout for these things,
I'm saying that makes the guyyou're bidding against, makes
them better, because maybe theclient takes your scope and
shows them and they have to.
(29:37):
Okay, yeah, here here, here, atthe end of the day, if you, if
all of the people in our world,the better we all get
collectively about showing upthe way we say we're going to
show up, the better it is foreverybody.
Because it's no secret thatwhen you go into a job, you go
(30:02):
into a bid, you already have ading against you because of
you're a GC, you're a contractor.
These guys don't answer, theychange order.
You, they do this, they do that.
The better we can all get, theeasier that transition is for
everybody.
The better we can all get, theeasier that transition is for
everybody.
Speaker 2 (30:18):
Rising tides raise all ships, type of thing.
Yeah, I also one other notethat we haven't said part of
this process on the front endand we're going to talk about a
couple more things, but on thisdesk estimate that we're talking
about, one of the things that alot of people miss is it's even
if you do that first call well,I had a call, I did this.
It is all about the follow-up.
How quickly, how on top?
(30:40):
How do I manage it?
Most guys send out the bid,talk through it.
Hey, let me know if you needanything.
Three weeks later, hey, uh, Ineed work now.
Hey, can you?
Uh, where do you, where are youat with my bid?
Like, are we ready to moveforward?
It's like, no, no, they've.
They're dating someone elsewhile you're out of state.
(31:01):
Like, you're, you're out oftheir, their brain and they're
gone.
And they've had fourconversations with this other
contractor because he's on topof his communication with them.
A simple email, a simple phonecall.
Hey, just checking in on this,wanted to see.
I mean, and all we're doing islaying out our next steps, every
single contact point is layingout, trying to make them take
one step.
I'm not trying to get asignature today.
I'm trying to get you for aside estimate, I'm trying to get
(31:21):
you to do a zoom so we can talkthrough this.
I'm trying to get you to sitdown and let's talk through some
finishes that you're lookingfor, because that's the last
thing we need to finalize thisfrom an estimate quote, right,
and so all we're doing is tryingto take them on the next date,
not marry them, and that's whereguys miss it because they're so
busy and I'm on the job siteand I'm doing like if you had
(31:42):
twice a week.
Tuesdays and Fridays is where Ialways try to push guys.
I sit down and I email everysingle job on Tuesdays and
Fridays, whether it's an openestimate, all the way through a
invoices around.
I final payment.
Guys, if you can just do that,twice a week Tuesdays and
Fridays you sit down and emailthose and have those
conversations on every singlejob.
The person that you send a bidout is going to hear from you
(32:05):
Tuesday and then Friday and thenagain next week, and they got
three communications in eight tonine days from you, where every
other contractor out there isjust waiting for them to get
back to them, right, and so ifwe can increase that side of the
customer service, of planningthe seat in their head of oh man
, james is on top of this.
James, I mean this guy would begreat to work with because he's
(32:25):
communicating a lot with me andthat's what I need.
Once I start the project, everyaction is really telling the
story of what their experienceis going to be like when they
say yes to you.
So we're trying to get thoseactions as well.
So it's kind of lining all thisstuff up.
It's trying to do all of thisstuff well and all of this takes
space.
All of this takes some time andthat's okay.
(32:46):
Take the time to do that.
And I know you're out runningjobs.
I know you're out on job sites.
Sometimes some of you guys areprobably swinging hammers on job
sites.
It doesn't hurt to say hey,client, just so you know.
I know I'm doing the work hereTuesdays.
I don't get here till 11.
And so because I got to dooffice work and I got to
organize myself and clients like, oh great, I need you organized
, that's perfect.
(33:07):
And I say that before I startthe job.
And every Tuesday I show up at11 because I spent three hours
in the morning, four hours inthe morning, following up,
sending estimates, you know,touching base with all my
clients, ordering materials,making sure that everything's
going well.
So it's, it's not.
We're not looking for you tospend 40 hours a week in the in
the office.
Give me three to four hours onTuesday, two hours on Friday and
(33:31):
that's it.
That's going to solve a lot ofthis and sell more jobs for you.
Speaker 1 (33:34):
I think some guys are worried about seeming like
thirsty and like too needy tofollow up, and so one thing that
I always do is whether it's thedesk estimate or the site
estimate, wherever we're at inthe process, and they need some
time and they need to look itover, they want to redline it or
whatever.
I say, not a problem, Itypically follow up on Tuesdays
(33:58):
or Fridays or whatever it is.
I typically follow up once aweek.
Is that a good?
Would that be good for you, ordo you need extra time, like
some people?
Like it's summer, we're goingon vacation, we're doing this,
kids have baseball, girls havesoftball or volleyball, whatever
it is.
They've got travel sports andthey don't want to think about
(34:19):
it.
They just want to have that andjust stew on it.
Can?
Speaker 2 (34:23):
we talk November 1st.
Speaker 1 (34:25):
Not a problem, on my calendar, I sent you an invite
so that when they and if theydon't accept it, hey, can you
accept that invite.
I just want to make sure thatwe have a spot to touch base.
Yep, you can follow up then.
It's not thirsty, it'sprofessional.
You need to follow up with them, make it your responsibility
(34:47):
and ask them is it all rightwith you if I follow up in two
weeks?
Is it all right if I follow upwith you every week?
Speaker 2 (34:54):
We're out of town for the summer.
August 1st I'm going to sitdown and start looking kind of
thinking through this.
Once the kids get back inschool, you do the invite on the
calendar, like James said, youset it up and then you go to
their job in the software andyou put it on hold and what that
does it takes it off yourscreen.
You pick a date when you put iton hold as to when I want to
deal with this again and you'resetting up a task for that day.
(35:16):
So the end of July, cause we'rewe've already got on our
calendar for August 1st.
It pops back on my screen.
I get a task that pops up and Ijust say, hey, just excited to
talk with you on the 1st, threedays beforehand.
I'm going to send thatfollow-up email.
I'm going to re-engage, I'mgoing to look over that estimate
that popped up on my screen.
I'm going to handle it.
Speaker 1 (35:34):
I had someone pop on my task list today.
I forgot who they were.
I I don't remember their name,but they're on my task list for
today to follow up with themabout an estimate.
I don't remember what it was,but it's on there.
Speaker 2 (35:46):
Hi, hello, I'm James and you needed an estimate, I
think, along with thosefollow-ups and setting it and
not looking desperate.
The other thing that I alwayslean on is let the calendar be
the bad guy, not yourdesperation for needing work,
(36:07):
right.
And so it's always like, hey,our calendar is filling up and I
want to make sure that Ireserve a spot for you, because
we've talked about you wantingto get started in a few weeks
and I wanted to make sure thatthere was space for that.
But I also want to let you knowwe've got some other
commitments that are coming up.
So should we put you down tostart around then, or do you
need more time to think about it?
We'll push it off, right, andso I'm not desperate, I'm just
(36:27):
trying to protect you.
So we're ready for you, yeah,and if you go with that angle,
every single, I mean I don'tcare if I have no jobs on the
calendar, like hey, starting tofill up for next month, can.
So why don't we go ahead andhave a call next week to
finalize a figure out if this isgoing to be?
And so the calendar is the badguy and you're you're the good
(36:49):
guy, protecting them fromsomething bad happening from
them losing that spot Right, andso I don't reserve your spot on
the calendar until I get asignature on the estimate.
But I'm going to pencil you inbecause I know that you really
need this done and you gotfamily coming in for
Thanksgiving, so it's got to bedone by then and that those sort
of conversations to where it'snot a desperation, it's I'm
looking out for you typeconversation All right, now that
(37:11):
we're past the desk estimate,we've got that.
They like it.
You've gone on site On aaverage hundred thousand dollar
job, eighty thousand dollar job,whatever it is somewhere in
there.
You go on site, you print outyour desk estimate, not you.
You're sending it to yourproject managers.
(37:32):
But if it was you, we walk onsite with the printed out desk
estimate that we've already kindof discussed and gone over with
them.
We're not going to go over howto do a site estimate on this
podcast, but you go througheverything.
You deal with the customer onsite.
How much time are you spendingto revise it at that point?
Cause we're not at therevisions to convert it into a
quote with the signature, wherewe're doing the due diligence
(37:52):
and picking out finishes.
But what are you, what are youediting at that time and how are
we looking at pricing fortrying to make sure that our
pricing's there and we'reediting that where.
Where do you adjust pricing atthat point and what are you
doing like with the customer tolet them know and have those
conversations?
Speaker 1 (38:09):
Well, the biggest thing is on the desk estimate.
Most times you don't haveaccurate linear footages or
square footages.
Like this might be too much.
I think I have the luxury ofbeing able to spend more time on
these desk estimates than mostpeople, but I'm going like if
(38:31):
it's an addition, no, that's abad one.
If it's a renovation, newkitchen, new kitchen and it's
going to bleed into the livingroom.
So it's kind of a little messy.
I'm using windows.
I'm using windows, I'm usingcabinets, I'm using doors where
I know general sizes todetermine what is the linear
foot of this wall, cause it's aninterior wall.
(38:52):
If it's an exterior wall, I'mgetting on Google earth and I'm
measuring the You're sayingbefore the site estimate, before
the site estimate, I've gotGoogle earth pulled up.
Depending on what it is.
If it's something where again,$100,000 job, I'm going to spend
10 minutes on Google Earthmeasuring because I'm not on
site to get a realisticunderstanding of what that looks
(39:14):
like.
It's a lot harder to find onthe municipality website.
If they do have a layout inthere, it almost never has
anything that's like actionable.
So, getting on Google earth andbeing able to find here's the
linear footage of this exteriorwall or using just your general
understanding of that's a 36inch exterior door.
(39:34):
So that means this is probablyanother three, six, nine.
This is a 12 foot wall.
Knowing that can help you kindof narrow down.
What is the square footage offlooring needed for here and
what is the square footage ofsheetrock needed?
And once we do that we're goingto affect the ceiling.
It's going to be a new lightplan, so the whole kitchen
really needs to have thesheetrock pulled out.
So I'm just putting roughnumbers on my desk estimate.
(39:58):
When we get to a site estimatethe project manager yourself,
whoever's doing it, pulling tape, pulling tape, getting
quantities and looking at thenotes that we've put in
Sometimes you don't even know.
The client can't even tell youif they're on a slab or a crawl
space somehow, and that affectsyour pricing pretty considerably
(40:23):
, especially if you're movingutilities.
So the things that are, thereare certain things that you
cannot do on a desk estimate.
Those things need to beexecuted on a site estimate.
Do not wait until you're in duediligence to land the plane on
things that can be landed on thesite estimate.
(40:44):
So quantities, linear footages,square footages you know what's
in the attic, what's in thepanel?
Do we need larger panel what's?
Are there HVAC requirementsthat are going to increase
because of what we're doing?
What's the size of the currentunits?
Because your client's neverreally going to know and you can
send those to your HVAC techlike the big ticket items that
(41:07):
you can probably get a prettygood idea of.
Hey, we're doing a 400 squarefoot addition on this house.
It's going to be a nine footceiling.
Hey, hvac, we already have twounits on site.
It's a 3,500 square foot house.
It's going to become a 3,900square foot house.
Speaker 2 (41:28):
Take a picture of just the little tag on the HVAC
unit that has the model and theskew and like the age.
Speaker 1 (41:31):
What are we going to need?
Yeah, what are we going to needis would a mini split work?
What's the price differencebetween a mini split in this?
It'll take you five minutes tosend your HVAC guy an email that
essentially is like your clientreaching out to you for a desk
estimate.
Hey man, what rough.
I'm not holding you to it.
You need to come on site atsome point if we get close.
(41:51):
But give me that number.
Talk to your flooring guy.
We got a tile that needs to comeup, but the whole project
deserves a lot of flooring.
Can you give me a good deal ondemoing all this tile and
installing new flooring?
You can have some of thoseconversations before you get to
due diligence.
You don't have to be pennypinching your time if it's going
to be a five minute expensewhere you're actually getting
(42:14):
very actionable, goodinformation.
So the desk estimate to thesite estimate.
I think that's one of myfrustrations with the, when
project managers aren't lookingat the work that's been put in
on the desk estimate.
Hey, we need to answer thesequestions.
This isn't just to get a good.
You get on site and you justget a good feeling.
Speaker 2 (42:36):
Which, on our desk estimates, we'll have questions
in the description of the lineitem that we want the project
manager to look at.
Or if you're doing it yourself,you're going out and that, oh,
I got to ask about this Becauseall of the stuff you just ran
through is so difficult.
It's especially for the newerguys to think about.
Like oh, I didn't even askabout the HVAC, oh, I didn't
even think about that, right?
Oh, they sent me a picture ofthe kitchen but I didn line of
(42:58):
cabinets behind where they tookthe picture.
So we just added 14 newcabinets to the quote.
That I need to capture and talkwith the homeowner.
Like, hey, if you look on thequote, I did 20 cabinets.
I didn't realize you had 14over there, so we're going to
need about 34.
It's going to double yourcabinet expense, right?
Speaker 1 (43:16):
And if you don't tell , them that and then you do the
revision and you send it andthey're like your cabinets
jumped up a lot Bait and switch.
Well, I didn't see the oneslike what are you talking about?
You were there on site, like,yeah, I was there on site, but
the desk estimate I did.
You can't get into that becauseit's just, it's, it's it.
You only sound petty, yeah,when you're coming at them with
(43:38):
like well, no, no, becauseremember if the desk, you
remember at the desk no, no, youowe me that money Cause I
thought of reason to tell youthat you owe me the money.
Speaker 2 (43:46):
Yeah Right, that's how it feels to them.
Speaker 1 (43:48):
And so you do need to make sure that when there's
differences in the in the deskestimate to the site estimate,
that that's a conversation, thatthat is, that is, uh, not just
a sticker shock when they getthe revisions, but that as
you're walking through the scope, it's like this is different
than kind of what we talkedabout on the desk estimate.
Here's why and maybe that losesyou the job, but again I'd
(44:13):
rather lose it than deal withthat.
That's okay.
You are going to lose jobs andyou are going to quote, unquote,
waste time, but I've said it ahundred times, you got to find
areas where you can double upyour efforts, so it's not a loss
.
Every time you go out to a siteestimate, every time that you're
interacting with a client,there's things that you're
(44:35):
learning, there's things thatyou can put in your tool belt,
add to your arsenal, and maybethings that you're like we might
need to change our approach alittle bit on jobs like this,
because we keep running intothis same issue over and over,
where a site estimate reallyjust doesn't even make sense
right now because they don'thave a full understanding of
(44:58):
what they even want to do withthe renovation, what they even
want to do with with therenovation.
So maybe the conversation ismore if you are you going to do
this project, regard like you'regoing to do something, like,
yes, great, let's work with anarchitect and an engineer,
because you're not committing tome, I will, I will run this as
part of due diligence.
We'll break all this out.
(45:18):
We'll get you a really good bid.
We'll work with the architect,we'll work with the engineer,
but I can't give you alegitimate bid until I know what
we're doing precisely.
Yeah, because you think theclient thinks that it's just
well.
It can't change much.
Based on what they just told mefrom the desk estimate, that's
not true.
Yeah, if you want to do an, ifyou want to do an addition and
(45:42):
there's I mean going back to aneasy one the foundation is
sitting on top of a heritagetree or a boulder.
We either need to change theplan and move the foundation
(46:03):
over, or we need to bust thatconcrete up, or we need to talk
with the arborist about makingchanges here, and so on a
hundred thousand dollar job, youjump to 115, 120, that's a 15
to 20% increase on your budgetjust because of one very
innocuous thing that turns intoa pretty significant change.
Yeah.
Speaker 2 (46:20):
Well, I think it's.
It's a couple of things.
When we're talking about makingsure we keep our profit, is
it's okay to have those changeorders or the changes in the
estimate?
We aren't to change orders yet.
We haven't started.
You need to discuss it with theclient on site.
We need to talk through itbefore I leave the desk estimate
.
If I leave the desk estimate andI go back and I'm sitting there
working on building out thisestimate, I'm sorry.
(46:41):
If I leave the site estimateand I go back and I'm sitting
there working on building outthis estimate, I'm sorry.
If I leave the site estimateand I go back and I sit at my
computer, I'm going to revisewhat I had already written and I
realize all the cabinets aredoubling.
I'm not going to send it tothem hoping they don't notice.
I'm going to call them beforethey get my estimate and say,
hey, I'm sitting here working onrevising assessment right now.
I originally put 20 cabinets inhere but when I got to the site
(47:02):
I counted we're at 34 cabinetswe need.
I think I missed this from thephotos.
The photos I'm looking at thatyou sent me was only from one
angle, so I just wanted to youknow, are we doing that whole
wall behind you?
Do you still want to do that?
And so I'm asking themquestions like I don't want them
to be, to be a part of merealizing that the price is
(47:24):
doubling for the cabinets.
Speaker 1 (47:26):
Yeah, and then they also they don't know what you
know.
So, okay, that bank of cabinetsthat wasn't in the pictures
also has a bridge cabinets abovewith glass, and none of the
other cabinets have it.
And you're just like, do you,is that something?
You also want the bridgecabinets?
Yeah, I definitely want thebridge cabinets.
Is that more of like anaesthetic thing?
(47:46):
Are you actually going to usethat storage space?
I don't know Like you'll beshocked at how quickly people
backtrack on what they know thatthey want.
Yeah, when it's like, okay,bridge cabinets, that's not just
like one cabinet, you have yourfive cabinets here and then
that's five more cabinets aboveplus the glass inserts.
Speaker 2 (48:05):
So it'll come $4,000 to $5,000 extra Do you need?
Speaker 1 (48:08):
that in your butler pantry, where no one's seeing it
, and that's the space whereit's kind of like away from
people that you prepare things.
Yep.
No, you know, actually I don't.
That's not super important tome.
Great, why don't instead we?
You do want to go to theceiling, though We'll add some
trim, we'll save maybe 2000bucks.
Instead of spending five, we'llspend two and it'll look great.
(48:28):
It's just not going to have theway it looks right now.
Yep.
Speaker 2 (48:31):
Yep, you're giving them options so they can pick
good, better, best, like none,trim glass, like what do you?
How?
How nice do you want it?
And we're good with any of them.
But here are your price pointsas opposed to why bid 28,000 for
cabinets and now they want thatand so now my profit's dropping
because I got to do that and wedidn't really talk about it.
But I did bid for the cabinets.
I just didn't know that.
Speaker 1 (48:51):
And that's.
That's another thing that youreally need to lean into with
your project managers, becauseit doesn't matter I mean,
however long I've been doing,for whatever reason project
managers get on site with a deskestimate and if there's changes
they're reluctant.
They're like, yeah, I'm justconcerned, man, because the
(49:13):
price on the desk estimate likeI don't see how that's going to
work.
It's like that's okay, that'swhat the site estimate is for.
You're not locked in.
I'm not sending you out therewith a desk estimate saying come
back with this price.
I'm saying check me, keepmolding.
I don't want to be 100%.
There's no way I'm 100% right.
Speaker 2 (49:31):
Well, I think the mindset that we try to change in
, guys is most contractorscoming in or most project
managers coming in to work foryou have this mindset of this
client is purchasing a productfrom me and I told them how much
the product is, and so we'relocked in on that and so I owe
(49:52):
them the product.
I'm selling them cabinets.
I'm selling them a product.
I quoted them $28,000 for this.
They want a little more, but Ialready quoted them, and so
there's already been anagreement of exchange of goods
here.
And what we try to switch fromthat mindset is I am the guide
on the journey of a renovation.
I'm your renovation shaman andI am walking beside you, and I
(50:17):
am here as the professional,with all the knowledge and the
know-how and the connections inmy crews to execute your vision
with your money.
And so I want to view this as Iam your shaman, your guide.
So here are the options.
We can do no bridge cabinets.
We can do the trim for 2000.
We can do five.
(50:38):
I think this will look good, butthat's up to you how much you
want to spend on it.
And so I am not makingdecisions and this isn't a.
I'm selling you how much youwant to spend on it, and so I am
not making decisions.
And this isn't a I'm sellingyou.
I'm trying to talk you in, I'mtrying to exchange of goods.
You this isn't a shop that I'mselling you something at.
I am your guide of how we'respending your money and I'm
trying to save you money as wego along.
And it's a simple mindsetchange, but it changes
(51:01):
everything in terms of theestimate through the final
invoice as to how we're talkingabout things.
Change orders are disappointingfor me, not like hey, you owe
me more money, but like oh noguess what.
Speaker 1 (51:12):
It's not like yippee, this is a change order.
It's like, shoot, we got badnews and it's, and it's truly,
truly it's.
It's truly frustrating becauseit's like ah, we already built
out the timeline, we already didthis, we already talked with
these guys and now we got to.
It's going to throw a wrench init, but it is what it is.
They made a decision that'sdifferent.
All right, you know whatever,but it's not a.
(51:34):
You're from the desk estimateto the site estimate and
everything up until you get asignature and a down payment for
due diligence.
You are figuring out what theproduct is.
This isn't.
They haven't given it to you.
Whether they think so or not,there's a thousand questions you
have to ask and get to thebottom of before you can say,
(51:57):
okay, this is the product thatwe are talking about and this is
the price for that product.
Up until then, it's like I wanta car, okay.
Speaker 2 (52:06):
All right, 50,000.
New SUV coupe yeah, what colorPT Cruiser Ragtop.
Speaker 1 (52:11):
What are you looking for?
Speaker 2 (52:12):
Ragtop PT Cruiser is exactly what I'm looking for.
Speaker 1 (52:15):
Dude sorry side note when I was getting rid of that,
do you remember that Chevy whiteMalibu?
Yes, when I was getting rid ofthat car, I brought it in and
this guy was like I think I knowjust the car that you're
looking for.
It was like this.
It was like the ball pit of thecar they had to.
(52:35):
Someone had to sell it.
He brings out this rag toppurple PT cruiser and I was like
pull up another one baby.
Speaker 2 (52:43):
I don't like it, I don't.
I don't want to one up you.
But for the first year of ourmarriage my wife drove a PT
cruiser because she worked at areal estate office and they had
it wrapped and they said you candrive it for free and we needed
a car.
So we're like we'll take it forfree.
Speaker 1 (52:58):
I'm not a car guy, but that is the ugliest vehicle
I've ever seen.
Speaker 2 (53:03):
Anyways, sorry if you drive a PT Shoot there's people
listening to this but they'reawesome vehicles, high quality,
all right.
So landing the plane on thisone change order is kind of the
last part, where you lose moneyand drop the profit from the
estimate, right.
And so, with the mindset thatwe're talking about, it's okay
(53:27):
to hit people with change orders, as long as you do it before
the work gets done and in theright way, with options.
Whenever I come up with achange order, whenever there's a
change order that has to happenon a job, I look at the rest of
the job and say, okay, wherecan I sacrifice money elsewhere
to make up for this?
So, that being said, I'mlooking.
I'm like, oh, I know thatthey've, this is going to suck.
(53:49):
We found termites.
They're going to need to spendthree grand on this.
I'm looking around saying, hey,they have some really high end
granites that they're pickingout.
I'm going to go to them withsome lower end selection so it
could be a wash, so they don'thave to spend extra money.
Now, do they usually do that?
No, normally people are like,just fine, pay the extra, but
for them, I'm their guide to tryto get them down the road.
(54:09):
So I'm trying to think optionshere.
Okay, where can we not hurt youfinancially?
Where every other contractor islike cha-ching, cha-ching,
cha-ching, give me that extramoney For me?
I'm saying, hey, no, I'm tryingto save you money here.
We could do that if you wereokay with downgrading that.
They're going to say, no,that's fine, let's keep that.
I understand there's termites,that's fine, that's going to
(54:29):
happen.
So I am again the mindset of I'myour guide, I'm the leader here
.
I always the metaphor I've saida hundred times I'm driving a
car and I want my client to sitin the passenger seat and so I'm
saying, hey, we're driving tothe destination.
They say, hey, turn left hereand say, well, actually, I know
(54:50):
there's construction on thisroad, we're going to go to the
next one and turn left.
If I'm steering and driving,we're on the journey together,
though I'm not outside thevehicle.
I'm not trying to me and mycrews versus them as a customer,
but instead I am theirrepresentative in getting this
done, and I view it that way.
The conversations change, theattitudes change, the way that
we treat each other changes towhere they have a really good
(55:12):
experience because I'm caringfor them and I'm guiding them
down that and at the same time,I'm not losing profit, because
they understand it, because myverbiage is not hey, you owe me
money and now we're clashing andthey're not going to pay me,
but instead like, oh, there'shonestly, like I missed
something on the estimate.
I didn't realize we needed this.
If we would have seen that wewould have had to charge you
(55:34):
then it would have been on there.
I've got to charge for it.
I'm going to do this, this andthis.
I'm going to cut the price downa little bit, but it's
something that we need to addonto the quote.
Right, those are the hard ones.
It's easy to talk about termites.
It's hard to say I didn't putshingles on the quote.
I know we were doing anaddition and I didn't put
roofing anywhere for thataddition.
We missed it and we got.
(55:55):
We got to add it on this, whatI'm going to do.
But that conversation is has tobe had in the front end, not you
owe me money, tough luck, yougot you, you.
You now have a roof, right?
You want me to put no roof onthat, like?
Instead it's a.
Hey, I missed it, you know.
This is why I wanted both eyesto look through and review the
quote, but we don't have a roofroofing call for anywhere.
(56:15):
If you can find it in here,we'll cover it, but I can't just
give free roofs, and thatshould have been on the quote,
right?
So having those conversationsas early as possible where
you're, where you'redisappointed with them, um
allows you to charge for thestuff that you're doing, make
the profit of what you're doing,be able to stick to what the
agreement was.
So any other comments aboutother vehicles that you don't
(56:37):
like.
Speaker 1 (56:40):
Um no, I mean, suzuki Samurai is a cool car, cool car
, uh, what was your firstvehicle you ever drove?
Jeep wrangler, oh you, hey, Ihad to have the transmission
rebuilt.
That's right, didn't it getstolen?
My sister left it somewhere,shady yeah, and when I needed it
the most it was gone.
Speaker 2 (57:00):
It was gone I drove a geo storm.
That's another cool car.
It was not too bad.
It got crushed like a soda canin a very, very minor accident.
Anyways, thanks for joining usthis week.
If you want to talk what?
Car talk?
Car talk uh, that's our nextone.
We're going to record the.
(57:20):
If you guys want to talk I lovethat hop on a on a phone call
with you.
If you go to ProStruck360.comand go to contact us, we can
schedule a 30 minute call whereme and you talk directly.
Talk about your business, talkabout how you can grow.
Love to chat with you.
If you want to talk, do that.
If you want some software theProStruck360 software go to
ProStruck360.com.
Some software the ProTruck360software go to ProTruck360.com.
(57:42):
Free trial for two weeks.
It's month to month, nocontracts.
It's $199 or $89 depending onwhat level.
You need Really good software.
Hop on it.
Thanks so much for listening.
We'll talk to you next week.
Bye, bye, bye, bye, bye, bye.
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