Walking the ethics line

[jason2]

Was out tyring to drum up some business today. Stopped at a business and inquired about submitting a bid. The manager was interested. I asked about bid specifications. The manager than asked if I would like a copy of a competitors proposal. Naturally I accepted the copy.

Sitting here at home, looking at the competitions bid. I almost feel guilty. I could slightly underbid and probably land the account. But also wondering if the client handed me over the bid just so they would get a lower price. And if that is the case, I don't know if I want them.

What I find most useful, is seeing the way the competition is bidding jobs. Even though I feel a bit uneasy about it, I'll probably underbid it a bit. I'm hungry for work, and still trying to become established.

[Skookum]

That's exactly what the manager wants. You give a lower bid, then he lets the other guy know he has a lower bid then back and forth until one of you stops lowering the price.

It's Business! It's the way the world runs. Free enterprise, It's GREAT!

[HOMER]

It's a dog eat dog world ain't it????????
You didn't ask for it it was offered, maybe for a reason, maybe because the oferrer didn't know any better (:confused:), for whatever reason you are now armed with information you need to submit a bid on the property, do what you need to do. You may not be the only one thats going to happen to so don't be sad if things don't go your way! I had a property manager from a real estate company give me all the prices from the previous year once, I over bid every one of them and didn't get anything. I was hoping the others might raise their prices----------they didn't!

[Greenkeepers]

The manager gave it to so that he could have some leverage with the other company. Just think that if he did it to them he will do it to you next year. I would give my own bid and if it you get it good, if not you at least have some knowledge of what your competitors are charging. Plus you have their name/number to call them and tell them to raise their prices because of what the guy is doing.

[mowerman90]

This is one of the reasons I won't bid commercial properties. Had a friend of mine who also owned a lawn service, loose 1/4 of his monthly business because he was underbid by less than $100 on a large property. I don't want to have to live with that threat always hanging over my head. Commercial property managers are making whores out of a lot of lawn services. Just my .02, had to vent.

[pace lawn care]

If I turned in a bid, I"d only have a total amount, so others won't see how you break down your bid.

[kutnkru]

Its a rareity when I am able to see a competitors bid, so I usually ask what they were paying the previous year for grounds care and 9 out of 10 times they throw a figure at me.

I never try to under bid the competiton. If the competitors price is comparable to what I would have charged I throw an added service in for the same price.

For instance, if they were having the pavement and walks trimmed every week, I offer to use a blade edger on the walks once per month for free. So instead of using a line trimmer the first week of the month I use the stick edger. (but he has a 3.5hp edging machine in his head)

Just a thought.
kris

[TGCummings]

Bid the job according to your pricing policy, whether it's less or more than the competition. As long as you understand your own job-costing that shouldn't be a problem, and there's no ethics question involved.

Don't just underbid the guy because you have his proposal. Your proposal will undoubtedly be handed to the other guy shortly after turning it in. Be a professional.

Having his proposal should help you to understand some of the pricing in your area, and can become a guideline in understanding your own pricing policies better. If you bid the job lower than your regular rate just to beat him out and get this one job then yes, you should feel guilty...

-TGC

[kutnkru]

TGC -- Great point about learning what your market will bear.

Kris

[Charles]

Thats incredible Homer! I have a real estate manager ride me around and show me the companies properties and then give me the price list of what the other LCO was doing it for. I bid the same thing the other LCO was doing it for lol. I didnt want to make LESS money than he was making just to get the account. He was making the correct amount anyway. Of course they never called me and the manager was probably pissed at me. Now as I look back on it though it would have been a great account to have. Some 20 properties. Kinda confusing. But i am not going to start lowballing and I surely think I am worth the same or more than the other company. The bottom line is dont let people play you into working for less than you are worth

[John DiMartino]

Just dont forget,what comes around-goes around.I doubt you will ahve this property long at all,from the way the manager handed you the current bid.I am not sure id try to get that site by under bidding,look at his bid,use it to your advantage,not to beat his bid,but to make your proposal more accurate for your income needs.If you come out higher-bid it or let it go,better to let it go than work to cheap,then quality suffers.You arent going to be doing this job long anyway from the looks of it,so keeep your pride and keep looking for the manager that will appreciat your hard work,not try to use you to get a lower price from his current contractor.

[Eng Mwr Guy]

A suggestion:

I have run several non-lawn related but cut-throat market type business' and have from time-to-time been given a competitor's information.

I usually try to meet the price and sell on my merits rather than being a low price provider of services aka cheap. This gives the person a feeling of fair market price was given also.

I have tried in several business' to be the cheapest and it usually doesn't work out too well. All the competition price slashing will put everyone out of business.

Good luck.

[kutnkru]

Thats so true e-m-g. This is the reason why $45 lawns are going for $22 a cut. People have to remember that just like my parents say ... things happened in the 60's because of the majority. If everyone went out in 2001 and raised the pricing structure from $35 a cut to $50 a cut we would all loose some customers. However when they kept getting $50 a cut as the answer they would slowly trickle back into the market.

LOWBALLING slahes EVERYONES throat. Alot of people say that IM outrageous in pricing or I cant get that much where I am. I have just one question???

How much is it worth for you to miss your daughters first steps, their first words.
More importantly, how much is the time away from your family worth??

Kris

[Eng Mwr Guy]

To kutnkru:

Which is why I am back to working for "the man".

One particular capital intensive business did me in.

And for what? I was interested in growth but at what price? I was written up in local newspapers and even made honorable mention in Inc. magazine as on of the fastest growing business. Big f***ing deal. My 2 kids are more important than growth of a business. My kids are my legacy so I should spend my time with/on them.

Sorry for the rant. I am passionate about this subject.

I do have some side business that kick off some spending money and tax benefits. I am thinking of doing some part, part, part time lawn cutting to understand this market better.

Thanks for reading

[Edited by Eng Mwr Guy on 01-09-2001 at 10:28 AM]

[kutnkru]

There are many factors we have to deal with in our pricing structures. When I first started mowing while in college I was starving and would eat the tail out a cow for $5-LOL. I used to bartend and bounce for bars when I was younger and didnt think about image. I was one of the 90% you would find at a pub after 430 with the truck parked nearby a local establishment -- NOT COOL. But now Im WISER and am concerned with company image. Haveing a family I have to take the lack of time with them into consideration when I'm bidding.

I have even lost major commercial bids because my girls were with me when I went after hours to measure properties for grounds care and they wont let us re-bid. Thats fine. And then again some of the corp's actually get to see what we are capable of and this doesn't become a factor any longer. For most, they now know to expect the three of us in the evening hours if they are looking for our bids. Irony is, they couldnt care less when my girls are with me at 5am to make sure the lots are cleared though - go figure.

Just my .04
Kris

[turfman99]

So your pricing policy and bidding strategy is just to look at the compitition's bid and then under bid to get the job?? If you have a pricing strategy and know your costs and profit needs, you'll throw the damn bid out and bid it at your price. The guy is trying to work you...

Your really helping the industry and your own business out but doing that type of emotionally based, non quantified don't have a freaking clue if I'll make any money type bidding.

Try developing a system that recovers your cost's, your overhead, ( and you do have it) and gives you a return on investment that exceeds what you can make if you took the same amount of money you have invested in equipment and invested in conventional market investments.

If you continue to undercut and low bid, you will never make a profit in this business and you will go out of business in less than 3 years.

[kutnkru]

I wasnt telling people to lowball, just trying to explain why I may be higher than some and how I have justified it was all.

You are correct about emotions as having a value. True they do not, but it is part of how I bid for my time. XXX dollars per hour for myself (+) crews (+) equipment (+) overhead etc.etc.etc.

Kris

[Edited by kutnkru on 01-09-2001 at 08:53 PM]

[bob]

I went to a home to leave an estimate. There on the ground in front of the house was a competitors proposal. I looked at it and mine was slightly cheaper. I saved the customer the trouble of having to decide.