View Full Version : Your Estimate is Over Customer's Budget
JimLewis
01-19-2007, 06:18 AM
Ok, so we've debated the topic of whether to ask for a budget first or not. And many here have said it's always best to ask for a budget at the first meeting. Still, many others here say they never ask for a budget. They just give estimates for the work the customer asked for.
I suppose this question is more for those who are in that latter camp - where you don't ask the customer for a budget.
My question is this; what do you do when you give a bid for a landscape installation and then you get this, "Wow. This all sounds great. We're very impressed with everything. It seems like your company does great work, and we're impressed with your references and how thorough your design and estimate is. But here's the deal. Your total bid came to $22,000. But all we have to work with is $18,000. Is there any way we can make this happen for $18,000?"
Before you answer - let's assume that doing the job in phases isn't an option. Let's also assume that cutting out a certain part of the project (e.g. lighting) isn't really an option either - there aren't really any "optional" aspects to this job.
How do you overcome this obstacle and still get the job?
EA Quinn
01-19-2007, 08:08 AM
in that case, we normally tell people to let us do the entire job. We already have all the equipment there. If we do it in phases it will cost the customer more because we have to bring all the equipment back to the site etc. etc. We usually just tell them to pay us the 18,000 now and when they get the rest of the money the following year to send it in. It has worked great for us in the past. Just make sure you have them sign the contract with the specific terms:)
It happens and here is what we do. We have a pricing system that is hard numbers based on our costs and experience, so we do not inflate prices which would then make it possible to trim the fat from. The price is for doing the exact work that is described on the plan and in the proposal. We can certain reduce the size of some of the plants, or reduce the number of plants in some areas, or reduce some other amenities to bring the job within the budget. What we have done is to design and price the landscape that we discussed and to use our experience and abilities to make that as nice as we can. We always make it a point to deliver the best plan for our clients with the understanding that they may want to reduce it to keep within budget, but that we don't want to deliver a lesser design.
That does two things right off the bat. The first is that it does not degrade your integrity by making it seem like you guestimate jobs based on the neighborhood or what cars are in the garage. The second is that it keeps you off of the very slippery slope of negotiating your profit. Nine times out of ten, they are just pressing for soft spots to reduce the price. When they don't find one and the design is everything that they really want, they find a way to pay for it very quickly. When you bring someone through the design process, they seldom want to hire someone else to build it. The rate of design jobs that turn into installations is extremely high - better than 90%. Our design prices will turn away tire kickers, leaving only viable prospects to continue. The type of design work is more involved than a quick foundation planting sketch, also.
MarcSmith
01-19-2007, 08:32 AM
I woudl bid in it phases....explaining that yes the final cost wil be higher. Another option would be bid it with smaller plant material. The design is still the same, but your "instant impact" would be somwhat less.
mrusk
01-19-2007, 11:20 AM
How can eliminating lighting not be a option? If you can't eliminate things from the proposal how can you bring the cost down 4k??
I'd eliminate lights, go with smaller plants, go from tumbled paver to no tumbled, maybe make the patio alittle smaller, make the bed smaller. There is alot of ways. But it is impossible to make it cheaper unless the customer is willing to give up something.
The customer could just be playing hard ball with you!!!
Matt
Team-Green L&L
01-19-2007, 11:39 AM
This is a good question Jim. I can't tell you how often this situation comes up when you don't have a budget up front. I just don't see how you can make a suitable proposal without a budget. I think I'll call a custom home builder (we are custom builders of a different trade) and tell them, "I want a new home. I don't have a budget, but if you would draw me a blueprint of whatever you think I should live in it would be great!" Would I get a shack or a mansion, and can I blame the builder if he gets mad at me for drawing up blueprints blind?
Team-Green L&L
01-19-2007, 11:40 AM
Oops, repost by accident. Sorry.
tjsquickcuts
01-19-2007, 11:41 AM
I always inflate my Bids, that way I have a little something to work with so that I can close the deal. I usually add a extra 15% to all of my Bids, that way if I hit a bump in the road, I have room to trim.....I have been very successful with this.....This also helps closed the deal, because if I have a customer that wants to think it over, I usually offer to give them a 15% discount if I can earn their business TODAY, not tomorrow, and not next week! Most customer will shop your bid around so this way I sorta make them make a impulse decision. Impulse spenders are the best, because they will spend first without much hesitation. On a $25k job, that gives the customer about $3700 discount. Giving a customer something is always a good way to sweet'n the deal. As far as asking for a budget, its good and bad. If you ask for a budget, then you sorta limit yourself because most people really dont know the true cost of a Pro install Landscape. I never ask for a budget, but during the second meeting I have a slide show on MSPowerpoint that I show them and I tell them what each project round about cost was so therefore it plants the seed. You can tell by a persons body language if you are out of their league or not.....and I have learned that people are always going to try and negotiate. Now for those they want it, but don't have $25k, my bank will finance the project as long as the customer meets a few requirements.....and this is actually better for me because I get paid up front, and the bank gives pretty good rates.....But I will never back off my original price, no matter what....and usually offer to refer them to another Landscape Co that might be able to give them a better price, but might not provide the same level of service and craftsmanship....
cleancutccl
01-19-2007, 12:02 PM
this is the exact reason that I always ask for a budget, and I always shoot a quick overpriced guess of what the job will cost that way the customer is not blown out of the water when the actual estimate comes in. When I give the guesstimate I also tell the customer that it is a guess and probably on the high side.
Team-Green L&L
01-19-2007, 12:18 PM
I think this thread is getting off-track. Jim is asking how (the people who DON'T ask for budgets) pick up when the customer is sticker-shocked. I may have gotten it off-track, but let's get back on board before we ruin this thread.
tjsquickcuts
01-19-2007, 12:45 PM
Its just like going to a Car Dealership, and finally seeing that car you have been waiting to come out, and then looking at the sticker.....:eek: ...yeah surprised.....Much more then you though.....But if the salesman has done a great job going over the details, options, etc....if you really want it, you will get it.....Same thing! You submit a design to a customer that they really really like, and sell the details and options, etc...you have a good chance to still close the deal without having to move off the original price....and trust me, when cars first come out, there is not much negotiating.....i.e. with the Chrysler 300c and Dodge Magnum R/T......everyone I know who purchased when they first came out, paid stick plus some.......
JimLewis
01-19-2007, 12:59 PM
How can eliminating lighting not be a option? If you can't eliminate things from the proposal how can you bring the cost down 4k??
Matt
Well, suppose the job entails doing sod (rototilling, amending soil, etc.), installing irrigation, and installing a paver patio. And that's the entire job. You can't eliminate lighting, because lighting isn't part of the job! And you can't really put off installing the sod and leave the irrigation and patio. Then you're left with a muddy mess and later you can't go back and rototill and amend because now there is pipe in the way. It wouldn't be smart to do irrigation later because it's just easier and smarter to do it right after you've tilled and amended the soil. Coming back later would unnecessarily disrupt the lawn. Besides, a newly sodded lawn would love some irrigation. And you can't get rid of the paver patio because it's the way to the turf area. Can't just leave a muddy mess between the house and the turf. And you can tell the customer wants a complete landscape.
The customer could just be playing hard ball with you!!! Yah. That could be true. And I guess you have to be good at being able to tell if they are sincere or not. But the risk is if you are wrong and start playing hardball back, they feel you are not trying to work with them and you lose an $18,000 job.
MarcSmith
01-19-2007, 01:05 PM
there are many different grades of pavers...scale down to a cheaper grade. install the turf and till, and do the irrigation at a later time. yes it harder, but Id be willingto give up a few grand of irrigation work to get a 15K job, only sodd the absolute minimun and hyroseed the rest....
Pavers are probably the most expensive aspects of the job....it be like buying a car without an engine....
tjsquickcuts
01-19-2007, 01:10 PM
Pavers are probably the most expensive aspects of the job....it be like buying a car without an engine....
Pavers are More like those 22in Giovanni Rims....They really make the car, but the Factory Rims will still be okay...lol....
Team-Green L&L
01-19-2007, 01:11 PM
Since we're using "car sales" as the comparison. Here's my view on "no budget" customers. I am buying a new car next month. I know I want a car, but I don't know what kind. If I walked onto the car lot and said "I need a car" the first thing out of the sales guy's mouth will be, "what are you looking at spending on your car today sir?". Then he will take me to his office and see what he can get me for that price, take me to the right section of the lot, and I won't be looking at a Lexus when I was budgeting a Chevy. If the sales guy HAD started showing me Lexus, BMW, and Mercedes then he just wasted both our time and I would go somewhere else.
The advantages I, as a consumer, have with a car purchase is that I do know what kind of car I can afford and what it should cost. Your customers will not have that advantage in most cases, so it is your job to point them to the right part of the "lot" based on what they want to spend. If they don't know what to spend then it is your job to find out. That, my friend, is sales.
Team-Green L&L
01-19-2007, 01:16 PM
Pavers are More like those 22in Giovanni Rims....They really make the car, but the Factory Rims will still be okay...lol....
I disagree, but this is the wrong thread for that. Giovanni rims do not function better than stock rims, they only look better. Pavers function much better than any other paving material. That is undisputed.
Now, stamped concrete, can be compared to Giovanni rims.
If the job is a sod and loam job, it is what it is. You can't rearrange reality because someone does not have, or is unwilling to pay for the money anymore than they should pay you more because your mortgage is due.
Lower budget jobs require more vigilance in finding out the budget than higher end work. No one likes to throw away money, but people with money know that things cost money and they know that when they want something they are willing to pay for it. They tell you the budget by what they ask for.
To use the car sales analogy some more ...
When you tell Joe Carsalesman your budget, the first thing he does is start to stretch your budget by upselling you, but keeping your car payments low, but over a longer time. He also does not give you your trade in value until he has you locking onto a specific car, so your budget is really very flexible as far as he is concerned.
He listens to what you want and pushes your dream along. He has you test drive a car that you really like, telling you that he thinks he can work a deal. After you drive it and get all horny over it, he will actually start crunching numbers and your trade in. By this time you have seen the car you want and you are trying to find a way to pay for it.
... then you buy it for $5,000 more than you were planning to spend and you like it.
That is a hell of a lot better for you and the salesman than if you bought that Hyundai that fit your budget.
mrusk
01-19-2007, 07:45 PM
Well, suppose the job entails doing sod (rototilling, amending soil, etc.), installing irrigation, and installing a paver patio. And that's the entire job. You can't eliminate lighting, because lighting isn't part of the job! And you can't really put off installing the sod and leave the irrigation and patio. Then you're left with a muddy mess and later you can't go back and rototill and amend because now there is pipe in the way. It wouldn't be smart to do irrigation later because it's just easier and smarter to do it right after you've tilled and amended the soil. Coming back later would unnecessarily disrupt the lawn. Besides, a newly sodded lawn would love some irrigation. And you can't get rid of the paver patio because it's the way to the turf area. Can't just leave a muddy mess between the house and the turf. And you can tell the customer wants a complete landscape.
Yah. That could be true. And I guess you have to be good at being able to tell if they are sincere or not. But the risk is if you are wrong and start playing hardball back, they feel you are not trying to work with them and you lose an $18,000 job.
Jim- Can't you subsitute sod vs seed? Seed is better than sod anyway and alot cheaper. Sell them a concrete patio. Irrigation? Come on doesn't it rain like hell in the northwest.
Honestly, if the people can't eliminate any options or won't spite the money up, there is nothing you can do.
You just have to walk. It is not your fault your customers can not afford the life style they want!!
Matt
tthomass
01-19-2007, 07:54 PM
"it is not our job to make it affordable, it is your job to afford it"
JimLewis
01-19-2007, 09:43 PM
Irrigation? Come on doesn't it rain like hell in the northwest.
Matt
Yah. And that's the problem. Perennial ryegress loves the regular water we get here for about 7-8 months out of the year. But when it stops raining (which it does, for about 4-5 months every year) then the turf doesn't like that so much. It's used to getting watered several times per week and then all of a sudden it's cut off? That's why irrigation is really so important here.
JimLewis
01-19-2007, 09:50 PM
Point of clarification - When I started this thread, I didn't have any specific job in mind. I was just curious how different people handled a situation like this.
I gave an example of a job, just for example purposes. My point was; suppose there is a job where nothing can really be cut out and you are slightly over the customer's budget, what do you do?
I figured the options were;
1) That's there problem. They need to come up with more cash somehow. I am on to the next bid.
2) Try to work with them to cut back some of the materials, use cheaper materials, decrease the sq. footage of one or more of the jobs, etc. Find a way to get them most of what they wanted and still stay within budget.
3) Lower your price, don't make as much money.
4) Have them pay for part of it later
5) Have them finance the job (e.g. John Deere Financing)
And those are pretty much the kinds of responses I got. I was just interested in hearing it.
I usually do either #2 or #1, depending on how busy we are. Usually we're so busy I don't have time to try to talk them into using us. I give a bid and if they can't afford it, I am on to the next bid. Sooner or later I always find someone who CAN afford it. And I work with them and leave the others behind. But I was thinking maybe I need to start doing #2 more often, and landing more bids. I just have to find a way to do it so that we don't lose money. Obviously, I can't lower my prices.
Travel'n Trees
01-19-2007, 09:54 PM
I use landscape 12 and customers usually see the design and either come up with more money or they do it in sections. Before pro 12 I would lose some now I don't. I am sold on it.
LB1234
01-19-2007, 10:25 PM
First off, great thread. I enjoyed everyones posts with some interesting answers.
I have a few questions.
Is this a repeat customer?
Was it a referral?
Is there oportunity for other jobs down the road?
Can this springboard you into a neighborhood (say by having your sign out on a busy highway...advertisement)?
Are you booked 6 mos/1 year in advance?
Is the customer worth moving the price?
Is the customer putting three kids through college and both parents working?
Can the customer truly not afford it or just looking to move on the price?
In general, I take the attitude my price is my price but of course there is an exception for everything.
tthomass
01-19-2007, 11:25 PM
I wish I could get a list of everybody who's kids are now out of the house and college........they have time and money to invest into their home. I also find new home owners, say 2-4yrs, are eager to jump.
I try to work with customers because I want the job (example being multiple projects at once) but if they just aren't being realistic there isn't anything left to do but to pass them off.\
Also, depending on the person they think everything is negotiable and will pull that just to get your price down, even if just a little. Now when you give a price and they take it no questions ask.........feels good, assuming you priced the job right.
Another thing to do is come up with an alternative solution for the landscape that is more affordable, but maybe totally different. Often, people get fixed on an idea and think it is the only thing that will work for them. You should be able to use your experience to come up with something else that they can do to take care of a problem.
What I don't like about that, or what I don't like about low budget jobs in the first place, is that you can easily spend more time and aggrevation to land lessr paying jobs that move less material. The time spent on these jobs is taken away from doing jobs that pay better and move more material. You only have so much time and it is foolish to burn it on things with low return. It is not so foolish to invest it on trying to land jobs that you have a good probability getting and which will move more product (= brings you more money).
It is like fishing. You cast your line, it bites or it does not. You might change your lure or presentation, but at some point you move on to the next fish. More importantly, it is best to fish where the fish are healthy and have a strong appetite. A dry creek is not such a place.
RockSet N' Grade
01-20-2007, 10:02 AM
This is a good thread. What I have found works for me is simply this: I review my origional price to make sure I am on track with my numbers and hold firm or I spend a limited amount of time to adjust the size of the job to fit their budget. I will not compromise on quality of material being installed or the quality of installation. In the past, every time I compromised my standards as to what I know to be the right way to do things, it bites me in either my bottom line or the customer trying to put blame on me for one aspect or another. If a job starts out bad....it usually goes downhill from there. Above all, maintain integrity and the work will come.......and it will come at the rates you have set for yourself.
JimLewis
01-20-2007, 06:43 PM
Nobody suggested the customer pitching in and doing some of the labor themselves.
That's sometimes a viable option. But in my experience, that usually just gets them thinking, "Um....I dunno about that...I think we can come up with the rest of the money afterall...."
tthomass
01-20-2007, 09:45 PM
liability but good for putting across a point
Nobody suggested the customer pitching in and doing some of the labor themselves.
That's sometimes a viable option. But in my experience, that usually just gets them thinking, "Um....I dunno about that...I think we can come up with the rest of the money afterall...."
JimLewis
01-21-2007, 03:00 AM
Laibility? A Customer digging a ditch or digging a hole or helping spread sod on his own property? I can't see any jury convicting me for that, sorry.
I still don't think it's a good idea most of the time - for many other reasons. But liability isn't one of them.
tthomass
01-21-2007, 03:17 AM
They're around you, you cause an accident and injure them.
Example to the extreme: Running a T190 and they walk close behind you and splat. Or using your "stuff" and injure themselves.....you didn't warn them or train them.......something a lawyer might could have fun with.
All together, if you don't work for me I don't want you around period.
Accu-cut Lawn Care
01-21-2007, 03:32 AM
If the job is a sod and loam job, it is what it is. You can't rearrange reality because someone does not have, or is unwilling to pay for the money anymore than they should pay you more because your mortgage is due.
Lower budget jobs require more vigilance in finding out the budget than higher end work. No one likes to throw away money, but people with money know that things cost money and they know that when they want something they are willing to pay for it. They tell you the budget by what they ask for.
To use the car sales analogy some more ...
When you tell Joe Carsalesman your budget, the first thing he does is start to stretch your budget by upselling you, but keeping your car payments low, but over a longer time. He also does not give you your trade in value until he has you locking onto a specific car, so your budget is really very flexible as far as he is concerned.
He listens to what you want and pushes your dream along. He has you test drive a car that you really like, telling you that he thinks he can work a deal. After you drive it and get all horny over it, he will actually start crunching numbers and your trade in. By this time you have seen the car you want and you are trying to find a way to pay for it.
... then you buy it for $5,000 more than you were planning to spend and you like it.
That is a hell of a lot better for you and the salesman than if you bought that Hyundai that fit your budget.
Then your question is rhetorical...And you've answered it yourself. If the design is unchangeable, it's take it or leave it. If it is ammendable, change a few of the plant sizes to adjust the price accordingly.
Accu-cut Lawn Care
01-21-2007, 03:33 AM
...meant to be a response to Jim Lewis' post.
JimLewis
01-21-2007, 10:25 PM
They're around you, you cause an accident and injure them.
Example to the extreme: Running a T190 and they walk close behind you and splat. Or using your "stuff" and injure themselves.....you didn't warn them or train them.......something a lawyer might could have fun with.
All together, if you don't work for me I don't want you around period.
See, all that stuff is avoidable. IF I was to have a customer do part of the work in order for him to save money and us still get the job, there would be some ground rules. First, I would never let him be on the site when we had heavy equipment around.
Second, probably most of the work he would do would be when we WEREN'T there. For instance, he could do the planting. I could provide the plants, place them, show him how to plant and amend the soil properly, and let him do the rest of the planting all weekend. Then we return on Monday and check on his work. Another scenario, maybe there are some areas that need to be trenched by hand. I paint out those areas, demonstrate how deep, how wide, and how clean we need the trench, and again leave for the weekend, while he finishes up that trenching on his own. Sod could be another thing he could finish on his own. The options are endless.
Third, if he was going to be doing work along side of us (something I'd do only as a last resort), then I'd make sure it was something relatively simple. Like he could be loading up sod or he could be spreading the mulch, or he could be installing nozzles....stuff like that.
There are usually lots of things the customer COULD be doing himself in order to save labor costs. And usually I'd rather be doing them myself. But if it means we still get a $18,000 job, as opposed to losing it, then it's something I'd at least consider.
LB1234
01-22-2007, 12:13 PM
IF you were to go the route of the customer performing the work I would have to think something we need to be in writing about the quality of the work, warranty, etc. I mean if customers are planting my trees/shrubs there is no way I'm placing a warranty on them. And then the trench...What happens if the trench is 15 inches in one spot but town requires 18 and you fail inspection...who is responsible for correction? I dunno seems like a lot of liability...and I'm not just speaking about insurance.
JimLewis
01-22-2007, 02:13 PM
True.
But in my area there isn't a code on depth of trenches. We just put pipe below the frost line. And here the frost line is pretty shallow - just a few inches. So standard depth for a trench is 8 or 10". And there is no inspection. So I'd just make sure he did the entire thing 8 or 10".
But you're right. There are warranty issues to negotiate.
I am just trying to foster ideas. That's just the way I think. I never think, "Oh. That can't be done." I always try to think like, "Well, that's not the way I'd prefer to do it. But it if must be done, how can we make it work?"
NNJLandman
01-22-2007, 02:59 PM
Tell them to pay you in quarters...have them give you 1/4 at the beginning of the job and pay you like that, that should give them time to invest the money in an ING fund maybe make a couple of bucks or tell them to take out a home equity loan or something...theres plenty of ways to pay for the work. IN the end I wouldnt change anything, I would tell them your sorry but thats the price you can do the job for without taking some things out of the proposal, and the reason your known for your great work is because of the materials you use, how you use them and etc....if you are to cut any corner to lower the price the job might not turn out as you had planned and leave you worried about it tell em somethin like that....cheaper materials = poor results.
Jeff
Tell them to pay you in quarters...
Jeff
One quarter weighs 0.01254lbs x 4 quarter in a dollar = 0.05016 x $18,000 = 902.88lbs
Sorry, I'm bored.
tjsquickcuts
01-23-2007, 07:19 PM
Tell them to pay you in quarters...have them give you 1/4 at the beginning of the job and pay you like that, that should give them time to invest the money in an ING fund maybe make a couple of bucks or tell them to take out a home equity loan or something...theres plenty of ways to pay for the work. IN the end I wouldnt change anything, I would tell them your sorry but thats the price you can do the job for without taking some things out of the proposal, and the reason your known for your great work is because of the materials you use, how you use them and etc....if you are to cut any corner to lower the price the job might not turn out as you had planned and leave you worried about it tell em somethin like that....cheaper materials = poor results.
Jeff
Billing in Quarters could be a disaster, if that customer decides either they paid too much, dont really like the work, or really couldn't afford it. If you have a good relationship with your Bank, see if your bank will workout some special Financing Packages for customers that meet certain requirements.....This way, you can get the Job and get paid, and the customers can have payments.....Therefore you don't have to worry about keeping track of their payments, or if they decide not to pay....the Bank I sure has more Lawyers and more experience with collecting....Only downside to this, if you get a lot of customers to skip or become bad payers, the Bank May not Finance any more work for you....
green horizons
01-26-2007, 09:15 PM
Jim,
I rarely ask for a budget unless I feel, after talking to the clients, that the scope of the work would require one. A few trees planted, the foundation mulch beds expanded a few feet and 12 yds. of mulch, then I'd just submit the estimate. If there were discrepancies with their budget, then we negotiate the scope of work. If it were truly a $20k job (or ANYHWHERE near that) I would absolutely discuss budgets up front. If they don't give a specific number, they should at least ballpark it. If they can't then I'm suspicious.
JimLewis
01-27-2007, 03:48 AM
My problem with asking about their budget up front is I often get a lot of people who either truly don't have one or they don't want to give me that information. I think it's usually the latter. But I know for sure that it's sometimes just because they don't care how much it costs.
I think when I ask people about budget, they feel like I am going to try to increase my prices to use up their entire budget or something. And even though they have up to $20,000 to spend from the recent home equity line they just opened, they are hoping the landscaping work is only going to be $10,000 or $15,000 so they'll still have enough left over for that hot tub or vacation to Hawaii they've been wanting to take.
Either way, when I do ask, I often don't get a clear answer. But I'll still often get the job.
Just today I asked a lady about her budget and she kind of back-pedaled a little and stammered and said, "Well, um....I don't know really...I mean, we're getting several estimates...and umm..." and then she kind of changed the subject. So I just dropped it. I went on to go over her ideas with her, work up some estimates, and later presented her with a bid that totaled around $15,000. And after my presentation she was so excited she almost wanted to give me the go-ahead right there. She still had to discuss it with her husband but I've been doing this long enough that I know we'll get that job - no question about it.
Still, she's one of those who wouldn't give me a budget, which seems to be fairly common. I ask for one sometimes. But at least 50% of the time or more, people seem unwilling to provide that information. As if it's none of my business. It's like their attitude is, "Why do you need to know how much money I have? Just give me a price and I'll tell you if it's within my budget."
So that's why I don't usually do it.
mountain man
01-27-2007, 06:30 AM
I don't ask for a specific budget since many customers may be thinking of spending "chevy" money when they can still afford the "buick" or "cadillac". When we come in with a great design we often upsale the job. A job that could of been done for $12k gets done for $15-$18k because of the creative things our designer adds to the plan.
I take the approach that we have plenty of work and if we don't get the job so be it - there are more fish in the sea. Until my closing ratio starts to drop dramatically then I am not going to worry about it.
Scaling back is an option. Renegotiating our price/ profit margin is NEVER an option. I am not a big fan of payments after the job. If they ask for this then it is a major red flag. I am not a bank or lending company. Payment in full for the balance is due at completion.
I have not used other financing programs such as John Deere, but one thing that works great for us is Visa and Mastercard. On all my jobs, I add an additional 2.4% to cover the service charge of visa. If they write me a check then my margins just went up. However once someone realizes they are getting points, they are often more willing to spend the extra money. I see this happen every week. This is also great on the smaller jobs that a final walkthrough is not necessary. We finish the job, call the office, our office manager sends an email stating we are done and will be charging their cc for the balance due. That way we have payment before the crew gets to the next job.
The great things about visa. The customer gets their new landscape and is happy. The customer gets their points. We get the work. We get paid timely with ZERO aging and we don't sacrifice our profit margins.
MarkintheGarden
01-27-2007, 06:58 PM
My problem with asking about their budget up front is I often get a lot of people who either truly don't have one or they don't want to give me that information. I think it's usually the latter. But I know for sure that it's sometimes just because they don't care how much it costs.
I think when I ask people about budget, they feel like I am going to try to increase my prices to use up their entire budget or something. And even though they have up to $20,000 to spend from the recent home equity line they just opened, they are hoping the landscaping work is only going to be $10,000 or $15,000 so they'll still have enough left over for that hot tub or vacation to Hawaii they've been wanting to take.
Either way, when I do ask, I often don't get a clear answer. But I'll still often get the job.
Just today I asked a lady about her budget and she kind of back-pedaled a little and stammered and said, "Well, um....I don't know really...I mean, we're getting several estimates...and umm..." and then she kind of changed the subject. So I just dropped it. I went on to go over her ideas with her, work up some estimates, and later presented her with a bid that totaled around $15,000. And after my presentation she was so excited she almost wanted to give me the go-ahead right there. She still had to discuss it with her husband but I've been doing this long enough that I know we'll get that job - no question about it.
Still, she's one of those who wouldn't give me a budget, which seems to be fairly common. I ask for one sometimes. But at least 50% of the time or more, people seem unwilling to provide that information. As if it's none of my business. It's like their attitude is, "Why do you need to know how much money I have? Just give me a price and I'll tell you if it's within my budget."
So that's why I don't usually do it.
This is exactly how many of my customers are. And of course most jobs can be done in several ways leading to a cost variable. So I often wonder if I could have sold a bigger project, or should have tried to sell a smaller project.
As for letting a customer do some labor to reduce costs this sounds like a bad idea. My dad did business with a contractor once who also thought it was a bad idea, my dad offered to do some of the digging involved for a lower cost. The contractor just looked my dad in the eye and said if you try to help I will have to charge you double, if you want to watch me and my crew do this work I will charge you 50% more.
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