PDA

View Full Version : Lowballers


icex
05-05-2011, 10:44 PM
Just a question, how in the hell can someone make it trying to hire 4-5 employees running equipment for $55 a hour (two machines at once for $55 a hour)?

A job im on right now the guy told me today that before I started this job that a competitor of mine came in trying to get the job with two machines at $55 a hour.


I mean seriously, how do they even stay afloat with 4 guys working with him and fuel so high?..

bobw
05-05-2011, 11:00 PM
The easy answer is that they aren't trying to stay afloat for the long term. Sometimes they just need cashflow to keep the lights on until there is good paying work. And, sometimes, they don't realize that they're bleeding to death financially at that rate until the bank takes their machines.

ccstrebe
05-06-2011, 10:27 AM
Robbing Peter to pay Paul, it is a viscious cycle and as long as you stay away from doing that and they don't, then they will either go belly up or become a non-factor as your competition because typically the and service becomes very bad when when doing work for cashflow.

Your goal should be to give the very best price you can for a quality job and you will be the last man standing.

blowerman
05-06-2011, 03:01 PM
Sometimes they know the numbers real well and run a lean operation! Everyones numbers are different.

bobcat_ron
05-06-2011, 07:49 PM
It starts with siphoning the competitor's diesel tanks when they aren't looking.

treemover
05-06-2011, 08:52 PM
Sometimes they know the numbers real well and run a lean operation! Everyones numbers are different.


This is one of those guys that do it.....idiots

allinearth
05-06-2011, 09:27 PM
Sometimes they know the numbers real well and run a lean operation! Everyones numbers are different.

And when their equipment breaks down, they don't have the money to fix it.:hammerhead:

meets1
05-06-2011, 10:10 PM
Being lean, knowing numbers heck I think I am lean and know numbers. But its a joke what some work is going for in my area as well. I a better off at shop/home with family and letting machine's sit than spin my wheels for nothing.

I ask one guy yesterday how the H he is doing it - he told all he is doing now is bidding to keep the lights on in the shop.

I figure, if that machine is sitting - therefore not taking fuel, not putting 20-50 hours on a week - that machine should last that much longer for me in the long run.

stuvecorp
05-06-2011, 10:14 PM
I got no hate for a guy trying to survive. Lets be honest clients don't have the money. I'm working for numbers I would have laughed at years ago just trying to survive another week or month.

icex
05-06-2011, 10:26 PM
I got no hate for a guy trying to survive. Lets be honest clients don't have the money. I'm working for numbers I would have laughed at years ago just trying to survive another week or month.

I think my pricing is fair at $65 a hour for the excavator, skid steer and $85/hour for a JD 120D. Not bad, is it?

treemover
05-06-2011, 10:32 PM
and it takes a lot years to get prices up. New guys get in at low prices and think it is the norm, then go even lower to get work. its a bad circle. keep your prices up

stuvecorp
05-06-2011, 11:17 PM
I think my pricing is fair at $65 a hour for the excavator, skid steer and $85/hour for a JD 120D. Not bad, is it?

I don't think right now fair matters as guys are just trying to hang on.

icex
05-06-2011, 11:19 PM
I don't think right now fair matters as guys are just trying to hang on.


Well things aren't bad down here as far as economy wise. I just do this as a side business, although I would love to go full time but equipment don't move for no less.

AWJ Services
05-07-2011, 08:57 AM
Every buisness has different costs so it can be hard to judge other companies charges.

There will always be competitors who come in very low and very high on bids. It will always be this way as long as there is competing buisnesses.

AWJ Services
05-07-2011, 09:01 AM
Sometimes they know the numbers real well and run a lean operation! Everyones numbers are different.

This a valid point.
For example I purchased a new item for my excavator that allows us to do the same job in 30-40% less time. So I could now lower my prices 10% and still make the same profit as before.

MOREDIRT
05-07-2011, 09:22 AM
If you are working by the hour you are not going to make it. It is funny watching all of these guys buying 50k+ skid steers and running them for 50-65 an hour. The only way these faster more productive machines pay off is when you are bidding work. If I worked by the hour I would have old slow equipment it's all the same to the home owner type customer.
Posted via Mobile Device

AWJ Services
05-07-2011, 09:47 AM
If you are working by the hour you are not going to make it. It is funny watching all of these guys buying 50k+ skid steers and running them for 50-65 an hour. The only way these faster more productive machines pay off is when you are bidding work. If I worked by the hour I would have old slow equipment it's all the same to the home owner type customer.
Posted via Mobile Device

If I was working by the hour I would sell my Takeuchi in get Case..........:dancing:

I have worked in the past by the day or half day rates but I have worked by the hour only once that I can remember. I prefer to just bid jobs and I have found my profit margins are much higher this way.

icex
05-07-2011, 11:38 AM
It is better here in WV to bid it by the hour due to the large enormous rock that we encounter. I did a gas line job last year in the fall and estimated three hours to dig a 500ft 2ft deep trench, lay the line and cover it up and it took 6 hours total to do it due to the rock, so if I would of bid for 3 hours I would of went in the hole.


This current job I am on is nothing but rock. They got it all hauled in from a creek so it is like concrete trying to deal with it were it has sat so long.



Moredirt, I diden't just go buy a $50k machine. This one was used and is already paid off.

raschmid07
05-07-2011, 09:00 PM
It is better here in WV to bid it by the hour due to the large enormous rock that we encounter. I did a gas line job last year in the fall and estimated three hours to dig a 500ft 2ft deep trench, lay the line and cover it up and it took 6 hours total to do it due to the rock, so if I would of bid for 3 hours I would of went in the hole.


This current job I am on is nothing but rock. They got it all hauled in from a creek so it is like concrete trying to deal with it were it has sat so long.



Moredirt, I diden't just go buy a $50k machine. This one was used and is already paid off.

If you work with a lot of rock, all you need to do is bid the whole job assuming no rock, then put in a line item for mass rock/ trench rock removal at $ per yard.
Posted via Mobile Device

icex
05-07-2011, 10:31 PM
If you work with a lot of rock, all you need to do is bid the whole job assuming no rock, then put in a line item for mass rock/ trench rock removal at $ per yard.
Posted via Mobile Device


I think i'll stick with hourly rates for now.

AWJ Services
05-08-2011, 11:08 AM
I think i'll stick with hourly rates for now.

When you are starting out the hourly rate is much safer. Better to make a decent profit rather than no profit!

icex
05-08-2011, 12:20 PM
When you are starting out the hourly rate is much safer. Better to make a decent profit rather than no profit!


Yeah, I bid on gabion baskets on a fixed price, but as far as other jobs its straight $per hour

AEL
05-08-2011, 04:17 PM
85 an hour for a 120d? Serious? I can get 85 an hour for a t190 and 90 an hour for. 50d. And I very rarely bid work by the hour. If I'm costing a job my hourly figures are quite a bit higher then that...
Posted via Mobile Device

icex
05-08-2011, 11:43 PM
People in WV won't pay over that. They will barely even pay that..