for small business owners and independent contractors

mark schofield

A CONVERSATION ABOUT PERCEIVED VALUE:
A customer asked a contractor friend of mine how much it would cost to do this project.
My friend gave him a proposal: $4500
The customer responded: That’s seems really high.
My friend asked: What do you think is a reasonable price for this job?
The customer answered: $2500 maximum
My friend responded: Ok, then I invite you to do it yourself.
The customer answered: I don't know how to.
My friend responded: Alright, then how about for $2500 I'll teach you how to. So besides saving you $2000, you'll learn valuable skills that will benefit you in the future.
The customer answered: Sounds good! Let’s do it!
My friend responded: Great! To get started, you are going to need some tools. You will need a chop saw, table saw, cordless drill, bit set, router, skill saw, jig saw, tool belt, hammer, etc..
The customer answered: But I don't have any of those tools and I can't justify buying all of these for one job.
My friend responded: Ok. Well then for an additional $300 I can rent my tools to you to use for this project.
The customer answered: Okay. That’s fair.
My friend responded: Great! We will start the project on Monday.
The customer answered: I work Monday through Friday. I’m only available on the weekends.
My friend responded: If you want to learn from me then you will need to work when I work. This project will take 3 days so you will need to take 3 days off work.
The customer answered: That means I’m going to have to sacrifice my pay for 3 days or use my vacation time!
My friend responded: That’s true. Remember, when you do a job yourself you need to account for unproductive factors.
The customer answered: What do you mean by that?
My friend responded: Doing a job completely from start to finish includes time spent to plan the project, pick up materials, travel time, gas, set up time, clean up, and waste disposal amongst other things. That’s all in addition to the actual project itself. And speaking of materials, that’s where we will start on Monday so I need you to meet me at the lumberyard at 6:00am.
The customer answered: At 6am?!! My work day doesn’t usually start until 8am!
My friend responded: Well then you’re in luck! My plan is to start on the deck build by 8am. But to do so we have to start at 6am to get materials picked up, loaded and delivered to your job site.
The customer answered: You know, I’m realizing that a lot more goes in to a job than what a customer sees in the finished project. Your proposal of $4500 is very reasonable. I would like you to handle the project.
CONCLUSION:
When you pay for a job, especially a custom job, (whether it’s a physical project or digital project) you pay not only for the material and the work to be completed. You also pay for:
✔️ Knowledge
✔️ Experience
✔️ Custom Skills
✔️ Tools
✔️ Time to plan
✔️ Time to prepare
✔️ Professionalism
✔️ Work Ethic
✔️ Excellence
✔️ Discipline
✔️ Commitment
✔️ Integrity
✔️ Taxes
✔️ Licenses
✔️ Sacrifices
✔️ Liabilities
✔️ Insurance
If you request a proposal for custom work to be done, please don’t disrespect a service provider by trying to get them to lower their prices.
If their proposal exceeds your budget, there’s nothing wrong with getting other proposals.
Just remember.. you get what you pay for.
👉🏼 SERVICE PROVIDERS: Know your worth and be confident in it.
👉🏼 CONSUMERS: Recognize their worth and be respectful of it.
Sharing this to support all my friends, family and clients who are Entrepreneurs, Business Owners and Tradesman.

reggi

So why would he pay $2500 without equipment and supplies on hand to learn to do what will exceed or meet the original price of $4500 after costs and having it done by someone that does it for a living?
The $2,500 for experience didn't buy much for this deal..... Lol 😆 

STEVEusaPA

Why are you posting this recycled story that's been going around FB for over 10 years?

pecmsg

Why work for you when someone else will pay the higher price?

Steamhead

STEVEusaPA said:

Why are you posting this recycled story that's been going around FB for over 10 years?

Those of us who do not trust Zuckerberg et al with our personal info would not have seen it yet.

EBEBRATT-Ed

I like it. It's nothing new to me but it's a good reminder.

dko

Well, the counter to this would not have been $2,500 to teach you how to do it yourself. The counter would have been an uninsured side hustler actually willing to do the job for $2,500.

jumper

Customers feel pressure making decision so that they have difficulty thinking impersonally. I offer a fixed price for complete job but customer insists on me providing only a plan & permit. Sometimes he also asks for appliance "at contractor price". Frankly those jobs can be lucrative if I don't have to come back.

Sal Santamaura

mark schofield said:

...Just remember.. you get what you pay for...

That's the only part I take issue with. The correct saying is (with thanks to Mark Eatherton, if memory serves) "You don't get what you don't pay for." The high level of competence represented by tradespeople on this forum is, unfortunately, not something a homeowner can count on with many contractors. Thus, one doesn't always get what one pays for.

JUGHNE

That "meet me at 6 AM" would have me giving him the job.