Tuesday, February 28, 2012

Pricing - Part 4: Get Peace of Mind

Get Peace of Mind with our Fixed Pricing

As we say on our website, the question about pricing that we hear the most is: "You contractors are supposed to be professionals. Why don't you know what a job will cost ahead of time?"

That is a great question, and we have structured our company so that we can properly respond to it. We will offer a fixed price bid on almost any home repair job. Our fixed price proposal will include both labor and all materials. It will also include a detailed description of the work to be done and the precise costs for doing it.

Upon approval of pricing, a time will be scheduled for work to begin. On the day that work is to begin, our people will be on time. They will follow the agreed upon schedule and they will clean up after themselves. 

When your project has been completed, we will invoice you and you will be given payment options: Cash, check or all major credit cards. We do add a 3% charge for taking a credit card, but that is what we pay for providing that service and we do not want to penalize our clients who pay using cash or checks.

This post concludes our series on pricing. We hope it has been helpful to you. We look forward to your comments.  If you have any questions, please email us: info@resultshandyman.com or call us at 615.891.7334.

Bill Boyd

Tuesday, February 21, 2012

Pricing - Part 3: "Time and Materials" Billing

Some handyman companies prefer to operate using "time and materials" billing. With this method of billing, the client is billed by the hour for labor. It also means that the client pays for a mark-up in addition to the materials used on the job. This can be a fair way to operate. In order to be fair for the client, you should know the exact rates and mark-ups. Some good questions to ask: What is the standard hourly rate for labor? Is the handyman 'on the clock' when driving to my job and when driving to buy materials? Is there a different (higher) overtime rate, and if so, when does this overtime rate apply? What are the mark-ups on materials, on dump fees, on permit fees, etc.? If a subcontractor (e.g. electrician or plumber) is involved with my project, what is the mark-up?

Again, "time and materials" billing can be fair. This is especially true when you are dealing with a contractor you trust. This trust is important because you need to be certain that all time on your job, and all materials used, are tracked accurately and honestly. You have better things to do than auditing material receipts and standing there with a stopwatch while a handyman is working in your home.

You may be wondering why "time and materials" billing exists. A lot of contractors prefer it because it because it ensures that they are being paid for anything that happens. Did the handyman forget a tool or some material? Did he cut a board incorrectly? Did he start painting with the wrong color? With "time and materials" billing, you are agreeing to pay for their mistakes and for their extra trips to the workshop and/or the home improvement store.

With this type of billing, you may also be billed for "water cooler" talk time if more than one man is on your job. More than a few handymen we have met through the years are pros at both carpentry and story telling. Further, we have been told of a handyman at a local company who routinely buys more material than is needed for a job. The client pays for all the material, along with a robust mark-up, only to have the rogue handyman take the 'leftover' materials for his personal use.

If you like this post, please take a look at our other posts on pricing. Next week, we will describe a simpler pricing method that many of our clients prefer.

Bill Boyd

Wednesday, February 15, 2012

Pricing - Part 2: Our Overhead is Lower, So Our Clients Save

On our website, we state that prices fluctuate widely among contractors. Then, we offer several reasons why this is the case. We can't and don't want to match the rock bottom prices of fly by night contractors, those who are unlicensed and operate without liability insurance, or the guy in a truck who needs a big deposit before he says he will be able to schedule your job.

However, we gladly proclaim that our prices are lower than those of our legitimate competitors. One of the main reasons we beat them on price is that our overhead is lower than theirs. On average, our prices are 25% lower than theirs.

Some of our competitors outfit their handymen with brand new trucks and vans. The owners and managers of these companies typically work in fancy offices, furnished with artwork, mahogany desks and ergonomic leather chairs. They also have a bunch of office people to pay each week, including salesmen (sometimes called client account managers), executive assistants and office managers. It's a good bet that their office people stay happy and alert, thanks to their gourmet single serve coffeemakers & iced beverage machines.

At Results Handyman Service, our work vehicles are clean and reliable, but we buy them used and keep them maintained. Our company is both led and managed by the owners. We have no other office staff. We don't rent office space or pay a mortgage on a building. We operate out of an inexpensive warehouse with a small area set aside for a couple of vintage desks and a phone. The clerk at the local convenience store operates 'our' coffee machine. He knows we will be by early and that we like it black.

Because we are so diligent at keeping our overhead costs low, we are able to provide top quality home repairs at very reasonable prices. It's no surprise that we have a growing list of satisfied clients.

Bill Boyd

Monday, February 6, 2012

Pricing - Part 1: Cheap Things are Seldom Good

Steve and I have spend a good deal of time this winter discussing pricing. We are aware that too many companies in our industry take advantage of homeowners who don't have the facts on pricing. We want people to know more about this topic so they can protect themselves and recognize real value.

Below is something that caught my attention recently was a notice from the Nashville Police Department. It reminded me of something that my grandfather used to say: "Good things are seldom cheap and cheap things are seldom good".

East Precinct - Metropolitan Nashville Police Department
ATTENTION: Recently, across the city, there has been an upswing in an old scam. Someone unknown to you knocks on your door, offering roofing, driveway repair, or other service. Usually, the victim receives worthless service or none. If not already relieved of their money, the victim is threatened to pay up. Therefore, be wary of unsolicited offers that are too good to be true. Check credentials and verify employment claims and affiliations.

For years, we have been telling people to be on the lookout for unlicensed and uninsured contractors. Whether someone knocks on your door or not, you should be aware that people who offer very low prices are most likely not going to deliver a quality service to you. So, what would a homeowner encounter from the guy who offers a very low quote? First it is likely that the guy offering a rock bottom isn’t licensed as a contractor in the state of Tennessee. You can check for yourself at http://verify.tn.gov/

It is also common for low cost contractors to operate without liability insurance or bonding. As a homeowner, you need to be aware that if you hire a contractor who is unlicensed and uninsured, you are taking on a significant risk. If that contractor damages your property, your homeowners insurance is not required to pay for the damage. This could make you responsible for a catastrophic loss.

Sadly, a good number of these low cost guys have substance abuse issues and therefore may need cash quickly. They may quote a price, ask a homeowner for a deposit and then proceed to get drunk or high. As an example, someone approached me and asked for a job last year. When I questioned him about his previous employment, he told me his former boss had terminated him because he was “too spaced out”. Steve and I saw him a few weeks later in a convenience store near our shop. As we were in line with our morning coffee, we noticed the "spaced out" guy purchasing a big can of Red Bull and an even bigger can of beer. I said hello and he seemed proud to mention that he hadn’t slept the night before AND was on his way to do “some electrical work”. We wouldn’t be shocked to learn that his career as an electrician was a short one!

We hope you can avoid all the spaced out "electricians" and other "cheap" contractors in our area this week. We look forward to sharing more about Pricing with you very soon.

Bill Boyd