biggest pricing cock up's

[blue]

We have all made mistakes when pricing work but whats you biggest .As in how much longer did it take than you thought.

 

[Big A]

first job I took on onmy own was a site clearance for a local developer, Had four others working for me for a week, digger and driver for a day, chipper on hire for the week and a large tractor and trailer for hauling chip and timber. I broke even on the pricing, covered all the costs ok, but the downside was I failed to take into the equation that most developers want to wait as long as poss to pay up! It was a steep learning curve as I honoured the costs on completion of the work and then sat sweating waiting for the money to come in. I didnt have a business loan, just my own funds to pay from and god were things tight for a while. Forgot to price in a profit margin too. DOH!!! I was so pleased to have got the job these things went clean out of my head. Didnt really lose out in the end as the developer came back to me several times since, and I talked about the mistakes I made the first time and he helped me with the pricing, even including a decent profit margin and paying up on completion of the work. Lesson learned.

 

[vharrison2]

Not the kind of thing I want to rethink........just get hot all over again. It is interesting to listen to the bashing and blaming though. Just remember you can never get to much!

 

[ROLLACOSTA]

iv'e had both sides of the coin...

 

[Crazy Canuck]

One of the 1st jobs I did. An old local farmer had a shelterbelt of a bunch of poplars in a shelter belt. They where about 80' tall and the top 20-30' of each tree was dead. He didn't want to get rid of them, he planted them himself with his dad when he was a kid and just wanted to make them look a little better for a few years untill he kicked the bucket. I drive along the row in August with him, never got out of the truck to get a closer look, just oh yeah I can do that for $6000. We had to wait untill mid september when the crop was off the field to start. At this point most of the leafs are off the trees and holy crap that row of trees is 2 trees wide. I decide to bite the bullet and probably break even. Start climbing the trees and get to the dead portion and the branches are still 10'' to 16'' around. Turns out that there where 220 trees in that row and it took me roughly 2 months to get the job done. I tried to back out but had signed a contract and he got lawyers involved and such, so I just ended up doing it. At least I was able to do it over 6 months so I could eak out an existence while working on his trees. Yep, it sucked ass, but now I just chalk it up to experience and I definately learned my lesson.

 

[Trignog]

It sucks when your boss under bids and he is pissy and it makes no difference to you cuz you get paid the same.

 

[Lumberjack]

I have a low regard for people who will back out of a contract simply because they arent going to make (or even loose) money on the job.

I have lost money but ya just gotta get it done.

 

[Crazy Canuck]

I have a low regard for people who will back out of a contract simply because they arent going to make (or even loose) money on the job.

I have lost money but ya just gotta get it done.

Let me clarify. It wasn't because I was going to not make money. I lost a lot of $$$$ and I never said that I was going to back out to the guy. I went to him and told him about how bad I messed up and asked not if he would be willing ot pay more so I could make money but would he be willing to pay more so that I didn't lose my shirt. He said he would think about a solution that would work for him, next morning I get a call from his lawyer threatening litigation if I backed out and they were not changing a thing. I paid myself no wage on that job and still lost a few grand. Like I said, chalk it up to experience and move on.....

 

[a_lopa]

the biggest cock up ive seen was made by 2 guys with hit for brains,basically a r.o.w job with 300 spans to clear.
They did a quick drive around and because we already had contrcts with the particular power co they bid and got the job not realising the 300 spans had been negotiated for removals where ever they could get a signature, namely 7km stretch of hawthorn trees to be removed prickly pear and massive red gums growing out of the sides of cliff faces to be limbed to the sky.

i cant remember how much they lost but it was funny getting a call every few minutes for a 'span'report.

 

[Acer]

We have all made mistakes when pricing work but whats you biggest .As in how much longer did it take than you thought.

I must have underpriced just about every job I did for the first 2 years of business. Doing quotes at night when you're knackered after a hard day's work is a common cause. You're pretty much bound to lose if you make a mistake, by forgetting to include a vital cost. If you overcharge you don't get the work, if you undercharge they snatch your hand off.

Most of my mistakes are a combination of underpricing plus unsuitable staff. One example was a hedgelaying job where we had to chip the waste with a hired in tractor/chipper. I underestimated that, so it ended up as a very hard days work for two grafters - except my employee at the time, who had never chipped before, was knackered after an hour, and spent most of the day getting in my way. We needed to hire the tractor for another day, extra cost of tractor = profits I would have made.

I've come unstuck on planting jobs, too. Lots of little errors add up. You quote for the job, then find that most other people tend to quote slightly higher. Plus the journey time is a lot longer than you thought, because of different traffic patterns in the morning cf. when you did the visit. Plus the best people you've got decide they don't like planting and clear off, and the rest can't do more than 100/day. Plus the access to the site you thought you had has changed, leading to more carrying of stuff etc. Then add in a few vehicle breakdowns. I did two of these in one season. I must have lost several hundred on each, and they dragged on for a couple of months, so no chance of taking on something profitable. At the end, the nursery we were working for, who had given us lots of work in the past, told me I was too slow and haven't spoken to me since,so I lost a major customer. Profits for that year £3,000 or thereabouts - didn't even cover the rent! Talk about anus horribilis!

One previous employer screwed up a big conifer hedge reduction. About 5 of us were driving from the middle of the county to one edge (1 hr drive), then taking the chips to his dump, which was on the opposite edge of the county. We weren't getting there until 9.30, and we'd filled up a freight rover and a 6 ton lorry with chip by around two. We'd all go off to tip, after which there wasn't enough time to go back and do any more. Five men over 2 weeks on that job, and I think he charged £1000 (about 5 years ago - I was getting £300 p w then, so he didn't even cover the wages!). Plus, one of the climbers got so stoned that he cut a section about 3 ft lower than it should have been! I don't know how he settled that - perhaps he gave the customer a discount...

But, there we go..we all do it. It pays to take extra time and care when you're planning and costing a job.

 

[Koa Man]

I usually don't like to give a quotation right on the spot. I normally tell customers that I will send them a proposal and call them with the quotation within 24 hours. Usually after I think about it for a while, the price gets higher. If they are anxious to know what it will cost, I give a ballpark figure, which ranges from what I think then on the low end, to 20-25% more on the high end. If I say it will probably run between $1500 to $1800, I am mentally preparing them to pay me up to $1800. When I call with a quote of $1650, they feel like they got a discount.

I never made a huge boo boo where I actually lost money, but I did have a couple of jobs where I ended up working for less than min. wage after paying my labor and other expenses. Thankfully they are very few and far between.

 

[ROLLACOSTA]

Acer that was a realy good post ,i could relate to all of it ,tree's are a bloody hard job to price up imo

 

[Matt Follett]

I'm with Acer... at least two years of underbidding! trying to eak out an existence, but lately things have been getting better... Slow learner I guess.

I think the worst was a clearing job we took on... never again! I've change the companies role since then... but we had over 200 Pinus nigra to remove, plus a handfull of other things... all here straight drops, but it was the largest contract I had ever bid on. seems like everything went wrong, from rented 20 inch chipper not running well, to lack of staff half way through. I managed to pay expenses, but not total wages... by about 1000 bucks! plus my time. But I learned alot from that job, and made out okay in the end with other contracts which arose from it, actually turned it around to a profit job in the end...

I think that is the main thing with all the oops... figure out what you did wrong, fix it and TRY not to repeat

 

[Acer]

Not just me, then..

I like to think of my bidding mistakes as lessons..hard, difficult, painful lessons, but they're the ones that teach you the most.

Also, the power of networking. Keep in touch with mates and see how they're doing it. As long as there's no issues with competition, etc, it's good to swop pricing info. One of the things that used to get to me was my profitability. I worked out that, for every £100 business I did, I was getting to keep about £20-25. I found that pretty depressing until I talked to other people and found that most people who are doing it properly aren't doing much better. That gives you an idea of what you should be charging to make a decent wage, remembering that if you're on site with the lads and doing most of the admin in your "spare" time, you probably spend 30 mins charging around or doing paperwork for every hour you spend on site doing something that earns money. You deserve to be paid for that time, too!!

I think koa's got the right idea. On the spot quotes are often disastrous..

 

[unimog]

I think we all make misake's at least a couple of times a year. On a lighter note, how about the the bigest cock up that made money.

I was asked to price some stumps on a motorway contract for one of the big national companies. Only had a little 20hp stump grinder and was well chuffed to have the chance to quote.

When I got to the site they had 6-8 men working with strimmers clearing the embankments,in the snow. The QS told me these guys had been going to site for the last 6 weeks and were only half way through the work and Amey were charging £1000 per day for managing the lane closure. Big bucks.

They wanted me to quote for clearing the roots etc. Being the wise guy that I am (tongue in cheek) I suggested that for £2 metre I would clear the areas his men Had already done and for an extra £1 metre would clear all the site they had not started. It would take me no more than 10 days in total. He snapped my hands off and wrote every thing you can imagine, in a water tight contract for the whole 5000 m at £3 (£15000).

Firsty, I arranged a demo of a mulcher and found a local farmer with a 180 hp tractor with creeper box to drive it (30p a metre ). We did the work through the night over 3 nights working 9pm till 6pm.During the day you could only work 9.30 am till 3.30 pm.

The QS was well chuffed, saved a fortune on labour and the lane closures, although he thought I had made to much money. He then asked hoiw much to rotovate and apply grass seed and fertilizer to the same area (5000m). My new farmer friend had all the gear and seed etc and would do the job for 50p a metre, I quoted £1.20, two days later job done. I'm thinking,Yessss, that was the big job that eveyone hopes their going to get...one day. 5000m x about £4 = £20000.Only £4000 to farmer and he had done all the work and paid for everything. I had a couple of lads to pay for the week. Yippeeee.

Wrong. Amey were the main contractors and they were charging and paying by the metre. When their QS came to do the finale measure it came in at 9900m. Of course I got a cheque based on that measure, just short of £42,000. I did give the farmer an extra grand and he was over the moon, the lads all got a decent bonus and endless nights out, The QS who had the water tight contract went back to been a brash rat.I got the leg over for many a night and bought myself some new kit including a Unimog,hence the name. Happy days all round,unless you were the QS and if you were, sorry and all that but, sh*t happens.

 

[Cotreewhisperer]

I work for a guy now that occaisionally will do those "gee I should have gotten out of the truck to bid this one"- jobs

 

[MasterBlaster]

Ha! Yah, that's a drive-by bid.

 

[iain]

what about those jobs, and we all get them, you really don't want to get, but you feel bound to quote, so you put in a high price,
then the customer still give's you the job d'oh , should have been higher !
when the jobs done & the money's in the bank, you've gotta smile

 

[Thor's Hammer]

Ha! Yah, that's a drive-by bid.

I have to confess to once doing the worst drive by bid of all
i did a quick drive-by of a 10 acre heathland clearance of scots pine- thought all the trees were about 15' - 25' foot tall with 10'' - 12'' dbh. All trees were to be felled and cleared. no problem - until i got the contract back and it was 10 hectares (about 23 acres), and the ground was 3 steep little valleys meaning most of the trees were about 2' dbh and 60' tall. they were hairy as hell and open grown so no worthwhile timber either i underpriced it at £12000 - it should have been £50000.
oh yes did i mention that not a scrap could be left on site? we were forwarding and burning for 6 weeks DOH!!

 

[iain]

ouch!!!!!!!