Price

[Mike Sullivan]

Originally Posted by CarolinaProWash

Good thing they didn't call us....we'd have been doing CPR when they saw our bid. We wouldn't begin to clean and seal for only a $1.00! Even factoring in the large amount of square footage we'd have been higher by at least another .50/sq.

I know, I have never charged that little for wood before. My original price was $30,000. I went down to a $1 because of the competition. I will still make decent money if I get the job, because the wood is only a year old, hasn't even turned gray yet and it will clean up easy and fast. Sealer should spread well since the wood is not as dry as old wood. Probably about 200 square feet per gallon, I would guess. I usually charge $1.50 - $3.00 per square foot depending on product, height, and condition of wood for residential.

[CPW]

You don't know how glad I am to hear that Mike!

Celeste

[seymore]

Originally Posted by Mike Sullivan

Hey guys, I just bid on cleaning and sealing with one coat of Cabot's Natural Clear Solution at an apt. complex yesterday. I got a referral from a faithful client and talked me up pretty good to the apartment manager.

MY BID
25,800 square feet of wood - clean & seal at $1.00/square foot= $25,800

COMPETITOR 1
25,800 sq.ft - clean & seal at $0.72/square foot= $18,000

COMPETITOR 2
25,800 sq.ft - clean & seal at $0.32/square foot= $8,000

THERE IS NO WAY I SHOULD CHARGE LESS THAN a $1 per square foot to clean and seal wood with $20/gallon high quality sealer on commercial properties.

Would everyone agree????????????

WOW that's a lot of wood to clean and seal! How many guys you would have working that job?

I take it these are small decks and you will have to move all your equipment from building to building PITA huh ?

How old is the wood and no stripping just cleaning?

I would have to bid the cleaning estimating hourly but damm a job that big it would be hard to figure out till you actually get started and see how things go.

[Deck Guy]

Originally Posted by PressurePros

Larry, if your close ratio is 90% your prices are too low. 60% is considered an outstanding close ratio. If you go over that you are working harder not smarter (more jobs, same money)

60% is an outstanding close ratio in what business? Is it the same for pre-paid funeral plans as it is for mobile homes sales or home alarms? I wonder what the closing rate is for the guys who sell meat out of their trunk? I'd like to see some documentation on closing rates for deck restoration in Missouri (or better yet, my zip code). Now that would be informative! How does that percentage account for ad placement and design? I don't claim to be the best closer around but...

If your theory is right, everyone everywhere should advertise anywhere and everywhere it generates the most calls without regard to a targeted demographic, and let your 60% closing rate theory increase their business. Is it possible that I just get more calls from people who are truly interested due to my ad placement and design? Or is it possible some schmuck somewhere only closes 30% of his calls, so we average each other out?

My advertising theory (from here forward to be known as "The Larry Davis- Don't compete with your competition," theory)is this...I don't advertise beside pressure washing companies, even though the daily paper I run my ad in has a specific heading for that. If I did, I would only get the readers who are looking for a pressure washing company to work on their deck. I advertise under Home Improvements, and spend a bit for for color (not many do), double the ad size (not many do that either), and get position at the top of the page by purchasing at least three months at a time. If I decide to try Roof Cleaning, I will do it exactly the same. My ad stands out enough that people can't help but see it (the only Deck Restoration one in the paper), and it reminds them that they need my service. My ad finds them, not the other way around. A lot of my customers say they saw my ad, and were compelled to call. In other words, they weren't even looking for my service until they saw my ad! That's what keeps me from having to compete with other companies, and gets me the business. My customers call me first, and often don't look any further. I also keep my truck clean, try to present a professional appearance, and try to price the work fairly.

Given your 60% closing rate theory...Let's say you send out 1000 flyers and get 20 calls for bids. Would you expect the same closing rate from them as from as from customer referrals? Of course not. Some callers have greater potential than others, and those are the ones I look for.

I've talked to, and seen bids, from others in my area who do decks, and our prices are nearly identical. In fact, in the example given earlier in this thread, I believe they would be identical. Like I said earlier in this thread, I try for about $70 an hour on the job. That may not be enough for you to keep your head above water, but I have relatively low expenses, and only do decks. I have a cold water 4GPM machine (now three years old), airless sprayer (also three years old),chems from RPC and Pressure Tech, and stains from Sherwin Williams ($17 gallon) and Ready Seal. Of course I also have business licenses, insurance and such, but those costs are under $1000 annually. Another benefit of only doing wood is that I don't have to own a huge hot-water rig and trailer, along with the maintenence and other costs associated with them. Lower overhead means I can make more $$$ even if my pricing was identical with someone with the bigger rig and higher overhead.

I just re-read this before posting and see that I'm getting defensive. I'll let it go now.

[Don M.]

Hey Larry, you better hop on that roof cleaning in Cape before I do. LOL

[Mike Sullivan]

Originally Posted by seymore

WOW that's a lot of wood to clean and seal! How many guys you would have working that job?

I take it these are small decks and you will have to move all your equipment from building to building PITA huh ?

How old is the wood and no stripping just cleaning?

I would have to bid the cleaning estimating hourly but damm a job that big it would be hard to figure out till you actually get started and see how things go.

I will have two guys and myself.

They are wood walkways and steps with vinyl rails. Three story buildings. The second floor and third floor is wood, bottom is concrete. I will have to rinse all the vinyl and concrete. Wood is only one year old nothing on it, hasn't even turned gray yet. I will only need Sodium Percarbonate to clean the covered sections and brighten with oxalic on just the outside walkways exposed to the elements. Only one side per building, so my hoses will reach easily. "Did I just give too much information?" I hope my comp doesn't see this.

If a miracle happens and the red sea parts, and they call me to do it, this will be my largest job since I started in 1999.

[Deck Guy]

Originally Posted by Don M.

Hey Larry, you better hop on that roof cleaning in Cape before I do. LOL

Don,

I've seen a couple fail here (including a national franchise) already, which amazes me. At this point, I wouldn't even know who to call if I wanted it done. I have a logo and marketing plan (or several ideas, I guess), but no time to pursue it, and no place to find SH at a decent price locally. I have even found an affordable full-size van with a 40' boom, but no way can I leave my day job at this point. If you lived closer, I'd try to con you into letting me market and bid, you handle the work, and we both split the $$$ somehow!

I can get 10% for about $2.50 a gallon, but I was hoping to do better. I'm going to call a friend-of-a-friend who owns a local uniform company (Tipton's), and see if they buy drums or have a supplier. Even then...I just need more hours in the day!

[garcii2]

Mike, I would have to agree with you on that one. If somebody pays for cheap labor, they are taking a risk of loosing their money and a poor job. If someone pays good money on a contractor that has a good reputation, then they may loose a little money, but they recieved quality work. If you offer cheap labor to a company, and they referr your business, then you are stuck what price.

[PressurePros]

Larry, I understand how you could have misunderstood my meaning. Allow me to elaborate. The numbers tell the story. A little about me: I've been in business a lonnnng time (22 years worth of various ventures and corporate life). I have a degree in economics from what is often the top business school in the country. I've done professional sales and have trained hundreds of guys as a corporate sales trainer. I study stats and my life is analyzing numbers. I also have hundreds of hours logged in seminars and consultation with some of the best salespeople and statisticians of our time. I didn't pull that number from my rear end. If your close ratio is over 60% you need to raise your prices. That is based on analytical data and giving you the benefit that you are performing perfect prequalification with targeted marketing. The average CR for a good salesperson is 33%. Ninety is just not realistic, I don't care how good you are. It has nothing to do with profit margins or what I need to stay afloat. You are undervaluing your product. If a car salesman could offer $5000 brand new Lexus he'd close 90%. Would it be because he is a great salesman or target maketed his clientele? I am not saying that you are not a very talented sales and marketer but I AM telling you that statistically, your numbers are skewed.

Here is my arguement that you are working harder, not smarter. Let's say we each get 10 calls from our marketing campaign. You close nine jobs. I close six. My prices are 50% higher than yours. Lets put your average job at $450 mine at $675

We both make exactly the same gross money.. ($4050 from those jobs) only over the course of a season I can do 35% more jobs than you can (given equal labor force and time per deck) Using an average month of 20 work days You might do $8991 where as I would do $13,486 in gross sales.

It would cost me about $500 in marketing expenses to achieve that gross sale number. If yours cost you $100 I am still ahead by $4095.

I have abolutely no idea where you got this notion

Originally Posted by Deck Guy

If your theory is right, everyone everywhere should advertise anywhere and everywhere it generates the most calls without regard to a targeted demographic, and let your 60% closing rate theory increase their business. Is it possible that I just get more calls from people who are truly interested due to my ad placement and design? Or is it possible some schmuck somewhere only closes 30% of his calls, so we average each other out?

If you have ever read any post I have made on marketing (there are many spread about in the business section and in the library) you would know I advocate targeted marketing to key demographics. I get probably ten calls a week from guys asking advice on marketing. I don't say this to blow my horn but to let you know you are preaching to the choir.

Another assumption in your arguement.. your have lower overhead. I'm not even sure how this is relevant to the discussion of sales and marketing but if you are buying your chemicals from RPC and PressureTek I know I am paying less. ( I am a chemical distributor) My sealer cost averages to $.09 per s/f. I don't believe in big fancy rigs. I use a 13 horse 4 gpm cold for deck work. I have a 5.5 gpm hot water machine used for housewashing and flatwork.

It comes down to this, Larry. Do you own a business or do you own a job? At some point don't you want to sit back and let employees perform the work you are doing? Don't you want to expand your company size and earn more profit? Those things take a higher profit margin. If you are happy staying a one man operation working your tail off and disillusion yourself into believeing success is based upon a 90% closing sales ratio then you and I have different definitions of success.

[CoastalHydro]

Ok, I know this is an old thread but I'm reading all I can so i can get the knowledge and hopefully add this onto my business model in the near future. There was a question that surfaced a few times in this thread that I coudn't find where it was answered. When you throw out a $ per sqft, does that include the cost of materials (stain, stripper, etc) or are those costs added onto the estimate at the end?

Thanks.

[seymore]

Originally Posted by CoastalHydro

Ok, I know this is an old thread but I'm reading all I can so i can get the knowledge and hopefully add this onto my business model in the near future. There was a question that surfaced a few times in this thread that I coudn't find where it was answered. When you throw out a $ per sqft, does that include the cost of materials (stain, stripper, etc) or are those costs added onto the estimate at the end?

Thanks.

My staining prices are materials included but there are times when extra charges are needed to protect stone,concrete etc.When it comes to cleaning charges not all jobs are the same. So you need to price them as to what is needed to clean them..IE Stripping,brightening,light cleaning etc.I price cleaning seperate from staining prices per sqft/Lft decks/fences.

You know your cost of labor or materials and you should charge to atleast cover those cost and the kind of profit you want to make.

[Greg R]

We bid material (stain only) seperate from the bid. Outside of that be bid out jobs by the square foot on the floor, framing and lattice and by the linear foot on the railings systems. Every deck has its challenges so you have to factor in a PIA charge on some

[RPetry]

Same here. Materials are estimated but billed on quantity used. Seems the most fair to both customer and contractor.

[MMI Enterprises]

In reading back through this I learn so much yet can not decide on pricing...

Seems Larry is at $.90, Ken at $1.35 , etc., etc. ..

Some say use 3, some say use 4 as multiplier for railing linear ft...

Then we got Russell suggesting a rail easy way with his add 6ft. method.
Works out to 672sq. ft. on Larry's 300' floor spaced (500 tot) deck. So it becomes real easy how sq. ft. price poll is way subjective to methods of guestamating..Russels sq. ft. calculation method would result in a sq.ft price of $.67 cents.....huge differences here..

I really like the guestamating suggestion mixed with them 5 things to think about in a business model...

Awesome thread!!

[bigchaz]

The differances come mainly from the fact that saying sq ft is really dependent on your measuring methods. Some people measure just the floor area and bill 3 or 4 dollars a square to cover all the other wood. Other people measure every side of every board and stringers, spindles, posts and charge much less.