Pricing Without Plans

It’s important to remember you aren’t in business to drive around and give out numbers. If you’re a specialty contractor, you also aren’t in business to provide numbers to architects or general contractors. You’re in business to provide a service and make a profit doing it.

A recent note:

“I work for a specialty subcontractor. We are well known for our grand staircases, but also pursue cabinetry and metal fabrication projects. Over the years we’ve been fortunate to have completed some amazing projects for great clients.

As a specialty sub we operate on two levels. Often we will work direct with homeowners in which case my process is very similar to yours: ask plenty of questions to qualify, identify mutual fits, discuss project in-depth, set-up a design agreement, work with our in-house designer to create conceptual images that are assembled into a firm price quotation to present the clients in a follow-up meeting. This is a good approach. It works well for us.

However, we are also commonly approached by general contractors or architects who request proposals from us. Sometimes these develop into solid jobs. But when a contractor is assembling numbers it seems there is an assumption that we should simply provide numbers, side stepping much or all of the design and dialogue process that works so well for us. Sometimes the information in the architectural drawings is sufficient and well developed, but often it is so lacking in detail that pricing is challenging. Often the architect or client is unavailable to provide answers.

I struggle with how to best proceed. When a contractor or architect is assembling a competitive bid, I don’t see them being too keen to pay us for our insights. What is the key here? How do I successfully set the terms in these situations? Is this just the way things work and should I provide numbers to the best of my ability if it is a project we truly want? Is there an alternative approach I’m missing? Is there a way to get to the table sooner with the decision makers without offending the G.C / Architect? Thanks for any insights you may have.”

When an architect or general contractor calls and asks for a quote, agree to meet them and look at the plans. I’d suggest following these guidelines:

1. If they don’t have plans, tell them to call back when they do.
2. If they have plans, ask if the plans are sufficient for a building permit. If not, tell them that the best you will do is provide a price range for the work. If they want a firm price quotation, your rate is $xxx dollars per hour, minimum of 4 hours. If the plans aren’t ready for a building permit, there is an excellent chance you’ll be involved in the design of the job and you should be paid for that service.
3. If the plans are complete, arrange a time to look at the plans with the architect or generals. Make sure they know that you aren’t just coming to pick up the plans. You want to discuss the plan details and the job budget, and that means meeting with the architect, general contractor, and/or client as needed.

The price of every job is determined by the design of the project and the selections that are made. You’re in a unique position because the design can have a tremendous impact on the price of your work. There is a huge difference between a staircase and a grand staircase.

For that reason, you need to ask about the budget before estimating the work. If they tell you they expect the staircase to come in at $10,000 and you’re looking at conceptual plans for a $60,000 staircase, it will be a waste of time to estimate this project. You’ll do a lot of work only to hear, “Your price is too high.”

The long-term key to providing insight during the design process will be to develop relationships with the general contractors and architects you want to work with. They might know you as a subcontractor who is capable of building beautiful projects. They might not know that you also designed those projects and have insights that could make their project better and possibly less expensive.

Start to develop those relationships by inviting them to lunch. Take donuts to their office in the morning. Offer to meet them at a local coffee shop and talk. Carry a portfolio of your work and explain your value in the design process.

Include on your website an invitation to general contractors and architects to help them design a beautiful project by bringing your unique experience to the table. (You won’t do it for free; discuss rates later.) Encourage homeowners to ask for you when they consider a new project.

I wouldn’t worry about offending any generals or architects. If they’re offended by your approach to business, you don’t want to work with them anyway. Focus on doing what you do best, with those who recognize the value you bring.

Michael’s Comments

Recently, Curtis Sprung, assistant editor for ProSales and Remodeling magazines, asked contractors to submit the books that have helped them improve their businesses. It was published in an article titled “The Remodeler’s Bookshelf“. Both of our books, Markup and Profit: A Contractor’s Guide Revisited and Profitable Sales; A Contractor’s Guide, were on the list as recommended by our readers.

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