Hey all,
I have an important decision to make what is to me a huge job and an opportunity to get back on track or fall flat. And when thinking about who could help me decide, I figured you guys are the best!
This job is 16,760 b.f. job, posts and rails, and when the customer first called he said it was somewhere around 3-5k b.f. job and he only wanted to pay .05 lower (.25) than my rate for 1k+ b.f (.30). Somewhere around a 17% discount on the total job I believe. (please correct me if I am wrong somewhere)After figuring the whole job I realized it was a heck of a lot bigger then he said and though a really didn't want to go lower then what I figure I need to be charging, I would be ok with a 10% discount to get this huge job, Rather then lose it. I believe his only other option is to cart them all to another sawmiller who is stationary, but he may have another mobile sawyer offering .26 or .27 ???
I have just gotten back into sawmilling after a 2 year hiatus for allow a back to heal after believing I was superman ;D and aside from a few small jobs this is my first big job back and after figuring all my costs and paying my labor, I am really torn, part of me says do it its good money even if things don't go quite as planned, part says thats a lot of B.F. for alot of things to go wrong.......It is the biggest job I have done by about 7000 B.F. and even though I have a better labor then back then that big job broke my labor :-[ and took way longer then it should of and to top it off it was 70 miles away so everyday with my v8 gas sucker killed me in gas, so I guess I am pulling a Derrick Rose...., Ready to get back into the game but worried about being o so wrong :D
Thank you for your advice,
Jason
I only mill for myself and have just started doing that. But, I own a landscaping company.
This year another local guy went out of business and now I'm getting the calls from his customers. My prices tend to be higher than his, by quite a bit at times.
I've gotten several of his customers now and at my price. They all say, "I was only paying X and you're more. Can you?" I stop them there and say, no.
I just stick with my price and don't go down. Then again I have enough work for me and my 2 guys.
Long road to a small house, feel confident about what you need to get and stick with it.
I can only say....only you know how important this is.
I saw soft wood for 25 cents and Hardwood for 30 or 35 depending on log conditions.
I have had people ask me about a discount before. I tell them it cost me just as much to saw the first board as it does the last board.
I've never had them walk away and they always come back because I make sure I give them a good board.
But what ever you decide, the best of Luck to You. smiley_thumbsup
How far away is this job, any help or just you. Steve
what do you have for a mill?
Big concern should be how fast he wants it,and getting paid as you go. Frank C.
Scope, Fee, Schedule, you have to control at least two.
A 17% discount may be too much IMHO, perhaps counter at $0.275/BF meet in the middle with some requirements on his part
such as:
Cleaned logs at landing
off-bearer/stacker supplied by client.
Then you can concentrate on sawing and not work your back too hard.
Questions:
Do you charge a set-up fee?
Expected fuel and band expense?
who would off bearing and stack, you?
would you be paying for help
Is you body up to the task if you saw alone?
How far to the Job site.
Remember the client is paying for your knowledge too
not just the mill.
Some ideas to consider.
Best
DGDrls
even if you drop to .25 .27 I think there needs to be additional fuel and blade cost . Are you a manual mill ? Do you have offbearing help ? If you are gonna pay a guy you cant go to low ! Here's the deal.... if you finish the day and free and clear in your pocket you have 100$ ......naw no thanks ....
It may be a 17% drop in price, but what per cent drop in profit is it. If you only made 16% profit on your work before, you will be losing 1% and go broke.
Wow, thank you guys for all the awesome responses, I will try to answer all the questions in order
Post it is all softwood-16k+ all pine 8)
Steve, the job is 20 miles away I figure it will take between 1 week and 2 weeks. Yes I have a helper, at 9 an hour, he is good help, especially with those 16 footers which most of this job is.
Peter, I have a Turner Mills manual sawmill with some custom redneck additions I have added (loading winch, water tank for blade lube, and a 5 ft track extension) :D. I can cut a 32" dia log up to 21' long.
Frank, I planned on collecting as I always do on a week to week pay and doing the posts collecting pay for them then the rails. He is not in a huge hurry and I think as long as I can stay in front of him putting the posts in the ground, I am good. I think I could keep up with him with no offloader.
Dg, I was thinkin 17% was high also I feel a little better at 10% I am willing to go to .27, Yes I charge a set-up fee of $60.00, I figure fuel cost for my truck and the mill in my normal costs, I figured between 20-30 resharpens of the blades (I do not count estimated breakage, its rare with my rubber tires for band wheels but it does happen and sure is crappy).He does have the logs all stacked ready to roll and will use his tractor to keep moving them forward. I do have helper at 9 an hour, Well I will tell you of course I COULD do it myself, however my wife and the rest of the peanut gallery would so NO WAY!!! An idea I had was to work my helper to a set number of hours and if it runs over, its me and my red S shirt ;D The job is about 20 miles away.
Scully, I think I answered most of your questions, I wish I didn't feel weird asking for a fuel or blade charge I just don't know how to work it into the conversation. I do charge a fuel surcharge if the job is 50+ miles away and charge a blade charge if I hit something in the wood. I do agree with you on the $100 at the end of the day, I could sit on a tractor and work a field for someone else for more than that :D
Cedarman, I have never figured my profit % was until now, I went to excell and think I figured it right and came up with between 45-60% profit range since I started back. But that sounds high to me and my wallet will argue them numbers and all these recent jobs were small (way small looking at that one). Your post sure made me think of another way to calculate my jobs, thank you.
Again thank you all for the great responses, I am definitely leaning towards holding my ground on my price, daddy once told me sometimes the most profitable jobs are the ones we don't get.... This may be first time seeing that, maybe he will still pay, like I said I would be ok with 10% discount being that they all are 16+ ft long and its so many b.f., but I am going to sleep on it before I call to let him know my estimate.
Thanks Again
Jason
Jason...some really good advice you're getting. I would only add that you should never, ever be fearful of clearly stating your rate and any additional costs. People can smell uncertainty and will take full advantage of you if given 1/2 a chance.
Quote from: woeboy on May 08, 2013, 11:12:38 PM......... daddy once told me sometimes the most profitable jobs are the ones we don't get....
Yep, that is one I was taught too, "I've never lost money on a job I did not take" is how it was told to me, but the same thing.
Don't forget the wear and tear on your mill, your other tools and even your truck!
Best of luck!
I would suggest you hold your ground. No discount. Remember, if you lose that job, there may be one just as good around the corner. You don't sound like you are high enough anyway. Don't give any discount.
I once discounted a job. Thought it would be helpful to get more work. Guy never came through with another bit of work. Spends his winters in his second home in the Caribbean on my dime so to speak.
Stay at .30 a bf + 25.00 a blade if you hit steel.
How much bf do you and your man do in a day?
I'm in Fla. and am stationary. I charge $.40/bf. If you get into heart pine you'll wish you charged more. Frankly, I think you are foolish to charge less than $.30.I 'd rather let my competition starve on that job and free me up for a higher pay job. What happens when your help quits, truck breaks down, hit a bunch of nails, or ?. Focus on what cedarman said about profit. That does not include your labor, that should be a "fixed" cost in your profit calculation. Don't you deserve to be paid for your labor ? Think of your profits as if you had to hire someone to run your mill. That will give you a better idea of profit.
Good luck.
Mark
It's good to see you back in action, Jason. :)
I have a couple of concerns about this job. Is the customer going to have the wood treated? If not, you need to have a little counseling session with him. If he puts those posts in the ground without treating, they will rot before you get through sawing. :o If you don't warn him of this, he will hold you responsible.
About that price, there is no way I would come down to .25 and pay the labor out of that on a portable job. That is a lowball price if the customer provides the labor.
I have a couple of sayings I have accumulated that speak to this:
- Lots of free cheese at a mouse trap but few happy mice.
- Its OK to fire customers. (or "not hire" as would be more approriate in your case).
- On a level playing field, competitiors undercut an honest businessman once.They starve before the second job.
So the conclusions are:
- Quality costs money.
- Problem customers grousing for every dime should be given to your competitors
- Hot heads bound and determined to compete on price only steal one job. Then they starve or charge the same thing the next time.
Hope this helps!
I would not offer a discount until the job is finished.
If everything on his end goes good, and the sawing is smooth because of the customers efforts then at your discretion offers discount.
If my customers provide good logs, GOOD labor, feeds me, has all their ducks in a row, pays in cash... Then at my discretion I offer a discount, of my choosing.
I don't recommend offering a discount prior to taking the job, bc it could haunt you in the end.
Good luck to you.
I always bid a big job as a way to make proportionally big profit. I would not accept a big job at a reduced rate. On the contrary, I would probably raise my rate a tad to make up for the unanticipated problems that are sure to arise, and to make sure that it is profitable. This results in increased business margin and reduced risk to both myself and the customer.
I would then try to seal the deal convincing him I would provide better service, better product, and better schedule, or in other words, I might be more expensive but would provide a better value.
Sometimes I lose jobs bidding like this, but the jobs I get are worth it.
YH