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Unread 02-01-2022, 11:40 AM   #1
davidcaswelltile
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What is an honest price?

Ok, so I'm at the point in my career, where it is becoming more and more important to stabilize my price, for the sake of budgeting, and o god yes please, pension contributions.

Anyway, what are some tips (no need to get too specific) that can help manage the price portion of the work, in such a way that one is:

A. Able to compete with other quotes in a timely manner (sometimes being required to quote jobs without complete information)
B. Able to adequately cover material expenses as well as delivery charges
C. Able to charge adequately for discrepancies on site, such as wobbly walls, site repairs (before the tile work starts).
D. Able to determine an appropriate price point difference between "high end" custom work and "low end" work.

This last point in particular i am most interested in, because in a way, all tile work is custom work, and the factor difference between "high end" and "low end" work seems to be affected by location and other factors that influence market value.

And again, in terms of market value:

Every job is unique, but how do we refine our pricing for stability and not have a two tiered price points for the so-called lower middle and upper classes?

Let me know if that was word salad. Money really is a sick muse.
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Unread 02-01-2022, 07:24 PM   #2
Just In Tile LLC
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David I could have an hour long conversation about the questions you've brought up. I'll give you my take on what you've asked. I think most of your questions can't be answered with a formula because job size changes most attributes to each question.

Personally I might not be in the same market as you so I might be ignorant to competitive type bids or fighting to win jobs against more than 5 contractors.

What works for me is to gather as much information up front as possible. sounds simple but I don't like leaving decisions for later. I usually milk an answer out that I can bid to (ok I'll assume 12x12 tile in the bid), all the while mentioning if this changes it could affect price. If I don't have enough data I simply won't give a price... I've learned once a number is thrown out it becomes a baseline and most of the time any changes always increase price so now you're fighting to raise the price because the baseline is in the clients mind.

Get comfortable with change orders for any surprises on the jobsite. I'll usually give one freebie that isn't major and actually plan for that in my original bid price. Meaning I factor an extra half day automatically to all my bids.

I don't have a price point for low or high end. I price all my work for the best job possible. I work for a client who buys lower end rent properties and has me do mud work in all of them. I price it the exact same as if I was walking into a mansion. Of course the mansion comes out more because I also think about the job layout and when I have to walk 1/2 a mile to my saw and cover everything on site to work that goes into my price.

End of the day for me I don't have "set" prices because I don't do tract homes where everything is the same for each job.
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Unread 02-02-2022, 12:13 AM   #3
jeffnc
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I struggled with these things as well. As my business/reputation grew, I got to a point where I was getting all the work I wanted strictly by word of mouth. This is because I stopped doing "cheaper" work, whereby to get jobs in cheaper rental homes etc. I would have had to do faster, lower quality work. I finally decided I never wanted anyone to know of, or put my name on, anything that wasn't quality work. So basically I only have one "tier", which is something I'd be happy photographing and say "I did that". Easier said than done early in your business, I understand.

The second thing I decided to do was virtually only hourly work. It became clear to me that most people could only go to the tile store and Google bathrooms for the color and look they wanted. None were capable of comprehending all the details and nuances and decisions that went into a custom bathroom/shower, and therefore they couldn't give me a full spec even if they wanted to. I was not going to do 17 change orders and wait for approval on every job. I would give examples of other jobs that were similar to what they wanted and the cost and that served as their estimates. But you never know what you're going to uncover. The other benefit of this method is that the customer can do things to save money, or just say "hey can you also fix my patio hand rail while you're here." I simply do what they ask because I'm getting paid, and if they want to haul a load of junk to the dump in their truck, it's fine with me and it saves them that money.
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Unread 02-03-2022, 01:06 PM   #4
Tile & Stone Guild
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Don’t ever be afraid to ask what you think you’re worth, and if folks are willing to pay it then it’s fair. If you chase high end custom jobs eventually it will weed out the smaller ones as you do more. Why is a Jackson Pollack worth so much or a Bugatti?

Wealthy clients don’t have a problem paying more for custom work , if you’re capable I encourage you to go after those jobs.
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Unread 02-03-2022, 01:17 PM   #5
jeffnc
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I agree with TSG. The money is out there, go find it and do good work.
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Unread 02-03-2022, 05:47 PM   #6
ceramictec
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What is an honest price?
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Unread 02-27-2022, 12:44 PM   #7
DIYDolores
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I'm not a tile person, but a custom paint and decoration sole proprietor with 30 years' experience. I've asked all these same questions and I think there is a lot of good advice already given here.

I do want to add my opinion that after so many years, and after seeing so many job sites and how others in various fields work and price themselves, that pricing is an art, not a science. There isn't a simple formula for it. I've seen that mostly, people charge whatever the market will bear. I've seen vast differences in estimates, without even a corresponding difference in quality. Critical here is understanding what your clientele can pay and what others in your field charge. It doesn't help to tell a worker "You should charge X" when the worker knows the market can't pay that. Sadly, everyone is correct that very rich people can always afford whatever you want to charge. $75/hr? $150/hr? $400/hr? They can pay it, and sometimes to do a good job you need to charge a lot. I once had a job for an extremely wealthy CEO. His designer told me to charge whatever I wanted, because the client would get angry if the subcontractors or architect told him there were cheaper ways to do things. He said he didn't care what anything cost, he wanted the best (because he was competing with his wealthy relatives, believe it or not!) I still had to have my husband sit right next to me when I sent the invoice (the biggest one I ever sent!) because I am unable to charge lots of money for some pathological reason :-) They actually had me do one part of the job over (it was perfect, but they changed their mind, they wanted brighter colors) so they paid 10 K instead of 5K. Yikes. I reminded myself as I did this that they had just bought two $10,000 lounge chairs. That helped.

As I went on in my career, my clients got wealthier and wealthier. It does bother me because I wish I could arrange for everyone to have nice things and nice homes. I try to help people do things themselves, or do free things. But we can't get into revolutionary economics on this thread :-)

I also sell my artist paintings-- try figuring out what to charge for those!!! I settled on this: If it makes me feel sick to part with my painting for what you want to pay me, I won't sell it. I'd rather have the very nice painting myself. I general, I think you have to charge enough so you don't violate your own self-esteem and feel like you got taken advantage of.

I think everyone has to decide how much money they really need in their life, and how much seems adequate compensation for their time, effort, and skill level. Then charge that honestly, and forget about it. Other things than money will also bring happiness into your life. Only you can arrange the variables of your own life the right way.
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Unread 02-27-2022, 04:35 PM   #8
Lazarus
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Nice post, Dolores...
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Unread 02-27-2022, 05:36 PM   #9
Lazarus
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Used to be in the new car business. Typical question was "What Is Your Best Price?"

Well, my answer was "When you thought you could buy it for a little bit less...and I thought I could sell it for a little bit more..."
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Unread 02-27-2022, 05:53 PM   #10
jeffnc
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Yeah, well said Delores. When I start seeing the cost of the fixtures some people are buying, I have no qualms about my prices any more!
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Unread 02-28-2022, 07:14 AM   #11
Just In Tile LLC
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I think you've tapped into why pricing is so challenging Dolores, it's an internal struggle to weigh your personal views on life and charging adequately for a profit. American culture puts ton's of pressure on making it big and having more money for security and peace of mind, not to mention it almost is the American definition of success.

Weigh that against your personal views on success, what this life is really about, and your current financial status and you have a "starting point" for charging on every job.

Of course there are those that don't dig that deep and just say business is about XYZ and don't have emotions connected to price, it's just business and not a reflection of self worth or personal views.
In my current situation my life is complete for around $40-$50 an hour sometimes it's lower sometimes its more.
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Unread 03-01-2022, 08:20 PM   #12
smifwal
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When I was a helper I was happy with $150-$175/day. As a business owner I wanted to be around $500/day. I run dirt moving equipment now and I won't work a full day (8 hours) with my machines for less than $1000.00/day per piece If I am working out of town I won't go for less than $1500.00 if the job doesn't warrant that per day I add a line item of $2000.00 + what ever the job is. I have friends that want me to run their equipment for $30-50/hour and I politely say no. My point is that as you getter better at what you do and your expenses go up you want more money for your time. I have a couple of flooring friends that charge substantial less than I would for a job/sqft but they have a crew of 2-5 guys and they turn jobs faster than I do

As a tile guy I lost more bids than I won, there is always someone that will do it for less and I am not willing to do everything by the book for the amount of money that the other guy will do it for and maybe he does it all by the book and he is happy with a lower daily rate, but I have gotten to a point where my time and experience is worth more than it was when I was a helper.

So you need to figure out how much you want to make a day and charge accordingly, and take in to account all the things that will slow you down. Back splashes and small bathroom floors it is hard to make your daily rate, those are the ones I would take the good with the bad. Whoever does the back splash will do the shower or the big kitchen floor when the times comes
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Unread 03-02-2022, 04:07 PM   #13
Raymond S
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Very good job of explaining that, Shawn
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Unread 03-02-2022, 07:54 PM   #14
smifwal
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Very good job of explaining that, Shawn
thanks!
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Unread 03-04-2022, 09:28 AM   #15
tilemanct
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I've always kept records of time and materials on all my jobs. NEVER quote jobs by the sq/ft. Know your business costs such as truck payments, insurance, licensing, rent on shop ect. Tile setting is not a hobby. All your time is valuable. From the initial visit to the final clen up. There is no such thing as a free estimate.
The hardest thing I had to learn is to say no. I rarely do backsplashes due to the poor risk/reward ratio.
Looked for high end builders who appreciated craftmanship and want their subs to succeed and be happy. I landed 2 that have kept me busy for the last 5 years even during the pandemic.
Know your quality and never stop learning. I just got back from a trip to Florida to see the grandkids. Never have I seen such atrocious tile work. We looked at some new homes and I was floored by the poor quality of every trade. These were $700K + homes.
When the customer starts to play Monty Hall (old game show he hosted called Lets Make A Deal) Make sure you take away from the customer and not yourself. Made that mistake early on in the trade. You never win.
You will find the balance and the customer base. It takes time. Always do the best job possible and give a little bit more.
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