View Full Version : Big Deal

Chris J
11-26-2007, 11:26 PM
Need some help from the big boys:
I've got an upcoming proposal to do on a very large marina/2nd phase to a very upscale neighborhood. The developer got my name from one of my customers in the neighborhood, and he tells me they are very interested in using me. They already have my proposal on a 12k renovation to their subdivision entrance lighting system, but now want me to bid on this extremely large project in this next phase of their property. They want to tie in the entrance cost with the 2nd phase costs, but the 2nd phase cost should be around 150,000.00 minimum.

Here is the question: I don't normally provide proposals of this caliber for free, but the developer is asking for "bids". This is going to take quite some time to figure out, but I don't want to cut my foot off by telling him that I need a deposit to create a design. If I provide my design time for free, and it all works out, this could be a nice job not to mention another good relationship with another developer..........What should I do? Put the time in now and hope for the best? Tell him I don't wan't to design it without a fee and risk being cut out of the loop? (He's never even heard of me except from my customer, who speaks highly).
I've always been one to walk away from these kinds of bid wars because it's just too much work for little reward.
No offense to anyone, but I don't need opinions here. I ask that only those of you who handle large jobs like this respond.

Thanks in advance.

Chris J.

Dodge Truck
11-26-2007, 11:32 PM
Tell him you need some money to design it for him, and tell him the reasons you just stated, if he doesn't understand that do you really want to do business with him?

Chris J
11-26-2007, 11:49 PM
Let me reiterate this just to be clear. This a is huge developer, and I'm sure he has many, many sources. He does not know me at this point. He only knows that one of my customers is very happy. I have not met him yet to discuss my plans. As I said before, I don't need uneducated opinions on this matter. What I need is true experience from true professionals. Thank you none the less.

11-26-2007, 11:50 PM
Go meet with him and feel it out. Be sure they know if they use you the "consultation fee" will be credited to thier acct.

if he finds someone to design a 150k system with no commitment to work I seriously doubt they will be happy with the end results of that system.

I would just state on projects of this size you collect a $XXXX consultation fee to begin the design and specification process. When you hire a lawyer to represent you its not uncommon to have to pay a retainer fee. I dont know any home designers that are designing for free.

I would have to say take the Gambino approach to this. If they refuse then its up to you to put together a bid if your still willing.

I know im not one of the big guys you speak of but I have done projects in other industries that were multi million dollar projects.

11-26-2007, 11:55 PM
I have dealt with developers quite a bit over the years with very large waterfall and landscape projects. Here is how I approach projects like this.

1. You need to ask the developer if he has an existing set of plans for the lighting design that is to be done. (I am sure he does not)

2. Explain to him that if he is to gather "bids", he needs to make sure everyone is bidding on the same apple, if you know what I mean. Otherwise obviously numbers are going to be all over the board and all that is going to do is muddy the water. Everybody has a different set of design criteria. Where one guy might put one light, I may put 4.

3. Most developers initially are only looking for a ballpark so they know what to set their budgets at. If you are comfortable doing so you may tell him, "I would forsee this project ranging between a minimum of 135k up to as high as 160k depending upon final design and overall difficulty of the project. (or whatever parameters you think is going to cover it).

4. He may want to see what you can do. Show him some of your work or better yet do a demo on a portion of his project so he can see how you operate and the kinds of effects he can expect to see.

5. If he is comfortable with your price range, tell him you can then design the lighting project for him on paper to get the numbers a little closer. Usually if you design it you will be installing it too. This design should be done with a good CAD program so you look very professional when you go over it with him. You will want to get the current landscape plan from his architect in a CAD format so you can see what plant material to highlight in your design.

Chris, on large projects like that you have to leave yourself some room for creative license. As you and I both know, things drawn on paper don't always translate across acurately to the actual product. You may need to add additional lights you were not expecting to. This is why it is important to use ranges in pricing on larger projects like yours. Explain it to him like this and he will understand.

The Lighting Geek
11-27-2007, 12:00 AM
I agree with Billy. Feel them out and see what direction they want to go. I would not design it for free, I did one free and had the landscaper get the job to install my plan (275 fixtures). It takes alot of work and it takes you away fom other profitable things you could be doing. I would charge him a design fee and credit it back if you land the job.

11-27-2007, 12:02 AM
Chris, I forgot to add on point 5 you will want to set a design price per hour. I Charge around 120.00 per hour for all on site and CAD design work. I wouldn't charge an initial consult fee with this guy, homeowners are one thing, but developers expect you to cater to them a little bit if they are going to hand you an enormous contract. However, don't waste time designing until you give him the ballpark numbers he is looking for, otherwise you may just be wasting a whole lot of time.

The Lighting Geek
11-27-2007, 12:03 AM
geeez...OK, I agree with Tim too. You guys are a good!

[Tommy scribbles notes]

Chris J
11-27-2007, 12:05 AM
Thank you for the info. This is something that I can relate to. I'll get back with you shortly.....

The Lighting Geek
11-27-2007, 12:08 AM
Tim, very sound advice.

INTEGRA Bespoke Lighting
11-27-2007, 12:49 AM
Excellent advice from Tim.

I would take the risk and do the design, specification and quote for free. I would present that package to the developer and their team, but I would not leave any information behind. If they want the design, spec. and contract left behind to contemplate it, then I would insist on a fee of 10% of the value of the project. You wouldnt catch an architect leaving behind their plans without a contract or a fee being paid for that work.

If the developer is in fact tendering the job out for bids, then they should have a package available for all bidders that fully describes the scope of the work etc. This ensures a level playing field between all bidders.

Chris, you may want to look at this as a marketing opportunity. To get the chance to do this work, and put it in front of the whole community will only do great things for your business. I have direct experience in a situation much like this and will discuss it with you privately if you want.

Have a great day.

11-27-2007, 02:31 AM
Good approach Tim! I agree
Chris, Where did the 150K minimum come from? I assume like others they have no lighting plan for everyone to bid on. If the initial price range doesnt make him blink and he is still interested ask if he needs a detailed plan done which will require an extensive amount of your time and you would have to charge for. He will then own this plan and the fees will be deducted when your proposal is accepted. Sounds like a great opportunity and I wish you the best of luck!

11-27-2007, 02:22 PM

You realize that you have to take some risk here bud. You need to take a chance to get a head in the world. You know this. I'd never be selling thousands of light fixtures, bulb, etc...a day if i never would have taken a chance. This is a big deal for you. Just design it, and prepare your sales presentation well...this is what it comes down to...can you close it...cover all your basis, read James favorite book tonight....if you can be a purple cow...you got it

Chris J
11-27-2007, 03:51 PM
I've got the purple cow book, but I haven't read it yet. After sleeping on this last night, I have come to the conclusion that I will not shoot myself in the foot by demanding consultation fees. I think this would simply be "looking a gift horse in the mouth", and it's my feeling that I should just put forth the effort to win the proposal without asking for anything at this time. I'm already one step ahead due to the fact that I have the President of the HOA backing me with his recommendation. I've scheduled a meeting with the developer this Friday where he will provide me with the plans for the project. I'll keep my fingers crossed.
Thanks for the help everyone!

INTEGRA Bespoke Lighting
11-27-2007, 04:20 PM
Chris.... READ that book!

ICT Bill
11-27-2007, 05:19 PM
OK, you guys got me...........what in the world is the purple cow book?

11-27-2007, 05:50 PM
Good luck Chris. You'll do fine.

INTEGRA Bespoke Lighting
11-27-2007, 06:57 PM
Bill... It really is a great read. Purple Cow by Seth Godin. It is a book on marketing your business 'outside of the box', focussing on how to make yourself and your business "REMARKABLE"

Bill Locklin gave me my copy a few years ago, I read it in Palm Springs one afternoon and I have to say, it actually changed my business and my life. It is a remarkable book.

Have a great day.

Eden Lights
11-27-2007, 08:36 PM
Every time you talk to this guy you should be educating him about yourself and your work. You should start talking to him about things like a bid is useless without a equipment spec and design which you should provide. Remember if your already busy with work this job will not make you anywhere near the profit margins as your day to day bread and butter work. Find out about increased insurance requirements and etc. before you work a deal for a 150K job: monthly draws, change orders, cost of damage and work slowdowns due to other contractors, and etc. Yes you should be excited and proud, but don't get $$ blinded. I have been there and lost money already.

pete scalia
11-27-2007, 09:45 PM
You can ask for design fees and they will probably tell you to go crap in your transformer. That is expected from Builders and HOA's. Give it your best shot but understand that they will be getting at least 3 bids. More times than not with this ilk it's the lowest one that gets the bid unless it's an ultra high end community. The problem is that your competitors better worse or equal are willing to give free bids so you will be expected to do so as well. good luck.

Chris J
11-28-2007, 08:39 AM
Thanks Pete. Thanks Eddie.
Yes, I'm sure they will want an increased amount of insurance coverage and I have that on my list of questions to be answered. It is a high end community, and they have already experienced lighting work from some of my competitors, so it is my belief that they are now ready to take the advice of my customers and use me for the project.
Eddie, I understand what you are saying about not making the profit margins on these larger jobs. I normally don't like the larger jobs for this very reason. I find it is much easier, and more profitable, to do five 50-fixture installations than it is to do one 250 fixture job. I've done a few of these "huge" jobs, and in hind-site, I could have done many jobs in the time it took me to design and sell the big ones.
Again, thanks for all of this great info!

pete scalia
11-29-2007, 12:28 AM
Think about large jobs as a number of small jobs altogether and approach them as such. yes they take more time to estimate but you could/should be more profittable with them. Less travel time, less marketing, less selling costs, less personalities to deal with (unless the large site owner is a real pita), less billing and collection time, makes scheduling easier as you know where your crews will be over an extended period. For me I'd rather have 50, 50K customers (maybe someday) per year than 200 12,500 jobs. Don't get me wrong I'm appreciative of them all but I find the larger ones more challenging and rewarding. salute :)

Chris J
11-29-2007, 12:56 AM
Yes Pete, I appreciate your observation. I believe, however, that there are few contractors in the world (like us) who command 50 jobs at 50k per year. That is just an insane numer of installations, and I would be impressed to know the person who may be doing it. I'm sure that someone who has the market could pull this off, but his company would probably have to be pretty big to be pulling down 2.5 mil in lighting per year. Again, this is only my observation. Please straighten me out if I'm wrong!

pete scalia
11-29-2007, 01:21 AM
Yes Pete, I appreciate your observation. I believe, however, that there are few contractors in the world (like us) who command 50 jobs at 50k per year. That is just an insane numer of installations, and I would be impressed to know the person who may be doing it. I'm sure that someone who has the market could pull this off, but his company would probably have to be pretty big to be pulling down 2.5 mil in lighting per year. Again, this is only my observation. Please straighten me out if I'm wrong!

I don't know of any personally but they may exist. If they don't they should. The market is very mature now it's not like it's brand new it's really picked up.
Anyone out there doing 2.5 please stand up . Please stand up.

11-29-2007, 08:06 AM
im sure some of these multi state companies (not going to mention names but they are in my area doing merc vapors all over the place now) are doing quite a bit more than 2.5

I do know one guys doing about 1.5m with 2 crews. its not impossible altho I doubt a 1 man band could ever do it or even a guy with a crew.

11-30-2007, 06:32 PM

Get the plans and send them into us. I will have my guy design the job for you and then if you land it you can change it around and do whatever you want. Then you dont have to worry about wasting any time!!

Chris J
11-30-2007, 09:42 PM
Very gracious of you Joey! I'll keep the gesture in mind, and I'll let you know if I need any help.
Thanks for the offer!

11-30-2007, 09:46 PM
No sweat. We got a really cool in house designer working for us and he does a great job on the specification and design side. He was an installer for about 3 or 4 years so he really understands how a job should be laid out vs someone who just throws out dots on a plan. Let me know.........By the way Congratulations on achieveing Chief Luminary Officer! Nate is going to be extremley jealous of this as he has prided himself on being a Master Illuminoligist. He would love to achieve that title I am sure!!

Chris J
11-30-2007, 09:49 PM
I stole that title from a friend of mine in South FL. There is no credentials to go with it, it's just all fun and games.

11-30-2007, 09:54 PM
It's very creative and I for one think that having a catchy title weather self appointed or accredited is a good thing.