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always seems I under-BID myself

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Forum topic by steve posted 01-31-2016 04:55 AM 1222 views 1 time favorited 22 replies Add to Favorites Watch
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steve

363 posts in 1454 days


01-31-2016 04:55 AM

I recently (in process) have a built-in project for a customer. He asked for a built-in media cabinet, below his TV, in a opening on wall. He wished to use all the rough lumber he had from an Oak tree from his property.
It is good dried wood, and I haven’t had any issues milling it. The deal was I would use all his lumber; inside/out. NO Ply for the cabinet, solid glued panels…all.
I had to do a lot of glue-up panels for a (inside of a closet) cabinet that I would have normally used Ply for.
See pics: the face frame I used the best Quartersawn, the entire panels for the hidden inside closet cabinet is all glued-up panels (labor extensive) solid Oak. I realize I have probably agreed to a “one-way” deal with him…i.e. in his favor, but I hadn’t had any work for some time, and took the job for a low price, like desperation.
When I stated my bid…He was very surprised it would cost that much, I knew right away I wouldn’t get anymore.
I NEEDED the job, so I took it.
I already have 36 hours; including visit for estimate, design, cut-list, etc…If I calculate 36 hrs x a mere $30 per hr I am at $1080, and not even close to done.
I ordered hinges, door mag’s, media grommets, a rear vent, knobs, finish (Arm-R-Seal), Rattan Caning for the door panels, 1/4” Oak Ply for the rear door panels, more—-+ $200.
I only got $900 for the entire job, including install.
I am beside myself, I feel like I robbed “ME”.
Too late…but, when I said at the meeting for estimate that it would be around $1000. even though he had all his own Oak wood, he seemed as though I was way too high of a price. I agreed to $900.

-- steve/USA


22 replies so far

View pintodeluxe's profile

pintodeluxe

4853 posts in 2274 days


#1 posted 01-31-2016 05:11 AM

For the current job, just take solace that you are doing the job right. Lesson learned for the next bid.

-- Willie, Washington "If You Choose Not To Decide, You Still Have Made a Choice" - Rush

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steve

363 posts in 1454 days


#2 posted 01-31-2016 05:26 AM

Since I started building custom furniture for others I thought I could make a decent profit…I assumed the quality would justify the cost. Nobody is willing to pay for this craftsmanship anymore.
I was hoping to find the few that would want it…but, these customers, there just not out there.

-- steve/USA

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tomd

2026 posts in 3231 days


#3 posted 01-31-2016 05:33 AM

A lesson learned the hard way done it myself. If there is not a really good profit to be made walk away.

-- Tom D

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JAAune

1634 posts in 1777 days


#4 posted 01-31-2016 05:49 AM

It is possible to earn a good living but the hard truth is that starting up any business takes years to generate a profit. Most businessmen assume 5 years average before turning a profit. That’s 5 years of hard, poorly paid work with no guarantee of success. During those five years, assume any income will need to be reinvested in infrastructure, tools and marketing.

To make a good income, you have to supply a market where the demand is higher than the supply or you have to become one of the minority that does it better, faster or cheaper than the rest. Pick two because you can’t be good, fast and cheap.

If you’re in a position where you’re dropping your price to get a job then you need to work on lead generation so you’re constantly giving quotes. After being in operation for over 3 years I’m just getting to the point where I can afford to lose most of the jobs I bid and still have enough work. That’s because I have a group of repeat clients that will give me work every month. On average I gain just one or two high value clients each year.

-- See my work at http://remmertstudios.com and http://altaredesign.com

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steve

363 posts in 1454 days


#5 posted 01-31-2016 06:04 AM

I am the little guy… the one man guy, taking any; everything to make a buck…how do I try to be fair, but true to my hard work & self/? Is there such a thing?
How do I bid 3 + jobs per month, but get what I deserve as a small shop…a really small shop.

-- steve/USA

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JAAune

1634 posts in 1777 days


#6 posted 01-31-2016 06:20 AM

There’s no short answer as it varies for everyone. Find your niche and get super good at it. I know that’s a vague response but I can’t offer much more than that. I have two niches myself. I do church furniture and commercial piece work.

If you want to make good money, I’d suggest finding something to build that’s not furniture. Your shop isn’t scaled enough to put out furniture or cabinetry fast enough to earn what you’re hoping to get. You’re competing against a lot of retirees with the same shop you have and they are all happy earning $15 an hour. The shops earning $50 an hour or more have $250,000+ in equipment and are kicking those jobs out the door every day.

If you aren’t happy with $15-$20 an hour then you’ll need to figure some smaller product that you can produce rapidly in that small space. The other alternative is to slow down and slowly build up a reputation with the wealthy portion of the population and have a goal of building for them in 5-10 years.

Not the answer you want to hear but that’s how it works. I took the long approach and it’s paying off for me. Others went into small, niche products and turned profitable in just 2-3 years and are probably earning 6 figure incomes.

-- See my work at http://remmertstudios.com and http://altaredesign.com

View cabmaker's profile

cabmaker

1506 posts in 2269 days


#7 posted 01-31-2016 02:45 PM

Steve i mean no disrespect….just reality.

Don’t think people are not willing to pay for quality these days….they are.

One rule in the millwork business…... the customer is not always right.

Your pics appear to be of marketable quality work but if you actually have 36 hours in it as stated….dont step out on the fast track…you will be squashed.
JB

View tomsteve's profile

tomsteve

393 posts in 680 days


#8 posted 01-31-2016 02:46 PM

one thing i do when estimating custom work is figure material cost and add 15%. that doesnt change.
then figure labor and add 20%. that gives me some negotiation room.
IF materials come in under my estimate i will deduct that from final cost as i dont feel right charging for materials not used.
but i will NOT undercut my labor. i dont have a problem with people getting estimates elsewhere. when i took work and didnt earn my deserved labor price for the skills i have aquired over the years, i dint enjoy working on the project.
i dont do woodworking to not enjoy it.
its taken a while-and many mistakes- for me to learn how to estimate projects and im still refining.

there is a customer base out there that can appreciate quality craftsmanship. it takes time,patience, faith, and work to get them.

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bearkatwood

1194 posts in 472 days


#9 posted 01-31-2016 03:14 PM

https://www.youtube.com/watch?v=arPCE3zDRg4
Like Bob said “Stop It!”
Cu yourself some slack. I have paid people to work for them in the past. Good bidding on jobs will come with practice and even then you are always going to have the jobs that don’t go the way you want. Sorry to hear you had a low bid job, it will get better. I like to count up my materials and then at least double the cost, that way when I get half down, even if the job goes sideways the materials are covered.
All the best.

-- Brian Noel

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Picklehead

1015 posts in 1390 days


#10 posted 01-31-2016 03:28 PM

From the peanut gallery, not a contractor:

Your bid should be a price that makes you happy if you get it, and happy if you DON’T. Same as bidding on Ebay. Bid so you won’t be sorry you won.

-- You've got to be smarter than the tree.

View a1Jim's profile

a1Jim

115202 posts in 3038 days


#11 posted 01-31-2016 04:39 PM

I’m pretty much in tune with most of the folks that posted in particular JAjune and Cabmaker.
Woodworking as a business is a tough business and underbidding is part of the learning process and part of your education as a business person. Let’s look at what you gained by taking this job: You learned that bidding can be one of the most important part of any job,so take lots of time and bid each part of the job,never give a on the spot bid. bid very heavy on each category ,the time,the material and then add a miscellaneous amount to your bid say at least 10% .
What else did you gain ? you gained a project to add to your portfolio and even though this is a low-profit job perhaps a customer that will recommend you . Like others have said it takes time and experience to become profitable in any business. Keep on keeping on.

-- http://artisticwoodstudio.com Custom furniture

View steve's profile

steve

363 posts in 1454 days


#12 posted 01-31-2016 05:09 PM

Thanks to all..

I get it/

-- steve/USA

View Monte Pittman's profile

Monte Pittman

21989 posts in 1799 days


#13 posted 01-31-2016 05:27 PM

I think most of us have had to eat a couple of those jobs. You learn quickly to be better at bidding.

I believe that people want quality. The ones that say I am too expensive weren’t going to buy anyway. I don’t build for Walmart, I build for them. Master your presentation. Quality and being unique to them sells big for me.

-- Mother Nature created it, I just assemble it.

View bigblockyeti's profile

bigblockyeti

3665 posts in 1181 days


#14 posted 01-31-2016 06:19 PM

I’ve had to eat a couple jobs, getting to know your customer, what they like, and most importantly (and possibly the most difficult) what they’re willing to spend can help tremendously in how (or whether or not to) bid a job. Figure out what the market will support in your area and stick to your guns. If someone is looking for something extensive that will take 50-100hrs. to complete and rolls up in an 87’ Celebrity, make sure you’re on the same page as them in terms of what’s expected from them and to them from you. Always give a rough rendering, even if nothing more than a short description with dimensions and ALWAYS get a deposit of at least 50% down.

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bondogaposis

4024 posts in 1812 days


#15 posted 01-31-2016 06:26 PM

It’s a loss sure, but perhaps it covered some of your fixed costs that otherwise would have been worse if you had been completely idle during that time. Hopefully it will lead to a more lucrative work in the future.

-- Bondo Gaposis

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