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A monkey working for peanuts

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Forum topic by Div posted 06-08-2010 11:15 PM 2541 views 1 time favorited 38 replies Add to Favorites Watch
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Div

1653 posts in 2405 days


06-08-2010 11:15 PM

Topic tags/keywords: question estimating bid quote

We all want to build custom furniture. It’s not always easy though, well not for me anyway. I’m not talking technical side. I’m talking numbers; the cost, the labor, the profit, calculating the price. Working out the cost of materials is still OK, but how do you figure the time it will take to build something you never done before? Off course experience helps. I’ve been playing this game for quite some time and mostly I come through OK. But once in a blue moon, I under quote by a long shot. Off course, you only realize this some time into the build. That is when you get this sinking feeling, when you know it will take much longer than you figured. Goodbye profit, hallo monkey working for peanuts!
That is what I am with my current project, a monkey! I guess the fact that work is rather scarce at the moment, that I really wanted the job, had a lot to do with my low quote/bid.
So the shop is ticking over but I am still a monkey.
Am I alone here, or are there just maybe some other monkeys out there as well?

-- Div @ the bottom end of Africa. "A woodworker's sharpest tool should be his mind."


38 replies so far

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pommy

1697 posts in 3156 days


#1 posted 06-08-2010 11:49 PM

I think we should all go work for IKEA payed monkeys for their cheap crap mass produced

-- cut it saw it scrap it SKPE: ANDREW.CARTER69

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,

2387 posts in 3011 days


#2 posted 06-09-2010 12:38 AM

I’ll be a Monkey! Count me in! My current job, we really needed the work. I shot my customer a real fair price, likely I am sure I beat all my other competition on a kitchen. She called me excited but needed me to come down 1500.00 off of my price in order to manage within her budget. I did and now I am suffering. But the shop rent got paid and some utility bills are paid. I am about out of gas and food though! I does really suck to work for less then what you know you are worth. She told me if we could not meet her budget she would have went with stock oak cabinets from Home Depot that would have met her budget. Boy did we need work and I am sure if I did not take the job we would still be sitting without work. Of course as most know I work for TX full time so that helps but we do rely on cabinet work to help pay bills because TX does not pay enough.

-- .

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a1Jim

115202 posts in 3042 days


#3 posted 06-09-2010 01:00 AM

You have to price the project according to it’s value . Then you have to calculate if your making money working for what it’s value is and if you will have customers if you charge what you consider the value is.
If Ikea is selling an entertainment center for $ 750 how much better is your because of better construction and better material. Think of it as a customer would, If it cost you $650 in material and labor and your selling it for $950 then don’t make entertainment centers .

-- http://artisticwoodstudio.com Custom furniture

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huff

2828 posts in 2750 days


#4 posted 06-09-2010 04:17 AM

This is a slippery slope a lot of woodworkers find themselves on, especially during tough times. We want (need) the work, so the natural thing to do is to underprice it just to get the work…...and then try to justify it by telling ourselves that at least we have work. The problem is…...your electric Company didn’t cut their price for your electricity just because you cut yours, the gas for your truck is still the same, your insurance is still the same, along with everything else it takes to operate your business…......and when you go to the grocery store, they don’t give you a break because you gave your customer a break. The slippery slope is this, I’ve seen too many shops start to cut corners, use cheaper materials and offer less services trying to make up for the lose of revenue. They ruin their reputation trying to stay afloat. I used to go crazy trying to compete with places like the big box stores, Rooms-to-Go, IKEA, etc., until I realized they can’t compete with me. They’re pushing two things: Inventory and price!. Another words, they stock a lot of junk at a cheap price. We have to educate the consumer and realize that the larger percentage of people are more interested in price then quality. Focus on the people that’s more interested in quality and work from that angle. Do you really think someone like Sam Maloof (while building his career in woodworking) designed, built and priced his chairs to compete with IKEA or Home Depot? He didn’t bring himself down to that level and either should we. It’s got a lot to do with how you think of yourself and your work. Easier said, then done and boy over the past 25 years I’ve seen alot of ups and downs ( and I’ve gone hungry more then once), but I’ve held true to myself and refuse to give my work away. I’ll do that during good times, known as charity.

-- John @ http://www.thehuffordfurnituregroup.com

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Puzzleman

411 posts in 2409 days


#5 posted 06-09-2010 01:14 PM

I agree with Huff. When your customer said that she would go to HD if you didn’t come down on price, alarm bells should have gone off in your head. It means that she values your work as an equal to HD.

In my niche market, I sell at a higher price than my competition. I tell my retail and wholesale customers that you will pay me more than XYZ company. However, I then explain why I charge more. Most times I win them over and then prove why I am worth more. I do have some that only look at the price and they don’t buy from me. I do let them know that if they have a problem with their vendor, I am always here to take of their order correctly.

When people ask to to discount my pricing, I ask them when was the last time that you volunteered to take a pay cut from your company. Then tell them this is what you asking me to do. I am giving you a fair price where I can pay my bills and make a little money. If the price is too much for you, I understand. One more thing, in a few years down the road, will the money that you want to save really be that important when you have problems? Since I am the best quality, my product will last for many years longer than the other one.

Jim

-- Jim Beachler, Chief Puzzler, http://www.hollowwoodworks.com

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toolchap

150 posts in 2385 days


#6 posted 06-09-2010 05:40 PM

Huff…...I agree. I walked that road for many years…even tried to educate along the way….often pearls before swine. My personal saying is they want Yellowwood for the price of Pine. A wise friend once told me he would rather sit at home doing nothing, than work for nothing. So for the last few years I have let that be…let others scramble for quotes and wear themselves silly running after clients and battling with suppliers. Funny thing happened. I sat at home without work, struggling. Looked around and thought “I would like to build a tool for myself.” It started like that. Now I sharpen for some guys, repair their tools or jigs, maybe build a machine or two. My metalshop grew and so did my metalworking side. I struggled, really struggled. Now? I do metal for money….hate the smell, the screech, the noise. I however remain passionless to a large degree about the metalwork….it is precise, has to fulfill a function and I dont feel regret when the client collects the project, wishing I could have afforded to keep that for myself. BUT…BIG BUT…..The wood..the love..the passion is now mine. I can do woodwork for my pleasure, in a stunning shop….all for me. My treat…for me.

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,

2387 posts in 3011 days


#7 posted 06-09-2010 07:05 PM

What is said above has a lot of good wisdom. On this job we are selling high end/quality cabinetry for maybe even less then Home Depot price. I cannot be sure without getting an actual HD quote. I can say this though, it is very easy for people to speak about this business philosophy, but when it comes down to it I have a wife and a 4 year old daughter, a 2 year old daughter and they all three depend on me! That is tough. I had a shop payment to take care of and needed the work to cover that along with some other basic needs/expenses. It is nice to have food in the refridgerator and gas for the tank, etc… Truth be told if I had to I would sweep floors or clean bathrooms if that is what it took for me to care for my children and wife. I work for TX and trust me when I say I make peanuts working for TX! But geuss what, I just met with a pediatric surgeon yesterday so my 4 year old can have a minor head surgery. If I did not settle for peanuts working for TX then what would I do for my little girl? Maybe I could tell TX to go suck nuts because I am above peanut wages and then place my family on welfare. My wife is a full time Mom and loves that so we do custom cabinet jobs on the side to make ends meet (so she does actually work full time besides being a full time mom). My lowest paying kitchen job was my first one, we sold that for 5600.00 for 62’ of cabinet. My current job is the second lowest paying cabinet job, we sold it for 5100.00 for 42’ of cabinet. My first job took us 3 months to complete and this current job will take us 2 weeks to complete. I originally bid my current job at 6500.00 and came down because we absolutely needed the money. A friend told me I should have been closer to 8000.00 for the 42’ of cabinet. That is all good but when you look into the eyes of little girls and an adoring wife, it is hard to stick to your guns and tell the customer to go to HD and meanwhile I will just see if my mom or sister or some uncle can donate to my needy children.

As far as the HD comparisons with us, I believe HD cannot compete with us and there is no comparison. But out of ignorance on part of the customer, that is sometimes what happens. It is a fact of life when dealing with a customer on a tight budget. And when you find customers on CL you will end up finding them on tight budgets.

As far as quality goes, our cabinets probably are close to the top compared to other custom shops in San Antonio. We build a very high quality cabinet, my last customer (that job sold for 9500.00 for 59’ of cabinet) told me that I likely could have come up 2000.00 on my price and still would have been very competative based on the product we provide.

The real issue we have and most woodworker might also struggle with is being known. You can have the best deal going in town but if no one really knows where you are or who you are then it does not matter what great product you have. Marketing really is the issue. But I feel there is a fine line between throwing money at just any marketing scheme and just wasting money or finding the proper methods and getting the most bang for your marketing. I have often wanted to read some books by Jay Conrad Levinson, Guerrilla Marketing to find good tips and tricks of effective frugile marketing plans and ideas to get the word out to the community that would say “yes we exist and we have a powerful product!”

I guess I just rambled and vented some here, hope no person takes offense. It just sucks to work for cheap while providing a quality product in the name of supporting my children and wife and feel condemned by others because I cut my price.

Jerry

-- .

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Div

1653 posts in 2405 days


#8 posted 06-09-2010 09:07 PM

Hey Jerry, I’m with you there brother. We all know the theory of it but when the wolf is at the door, you do what you can! I also have 2 daughters, 6 years and 10 years. There is actually a photo of the youngest under projects: “Little lumberjack in my lumber yard.”
Thanks for being honest and admitting to being a monkey as well. Makes me feel a lot better! At least you got the job and it adds to your portfolio and lessons learnt (apart from food in the fridge!).

We are all slightly missing the point though. It is more about estimating the time required to build something unusual, something you have not done before. When all you do is tables, it is easy to price one that is slightly longer, or wider or with some extra feature. It was under estimating labor that got me on this one.

Huff, what you said is o so true, and a slippery slope it is indeed! Finding enough people that will pay a little extra for quality, THAT is the challenge. If you have enough, well done, you have the marketing skills…more important than the woodworking skills!

-- Div @ the bottom end of Africa. "A woodworker's sharpest tool should be his mind."

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pommy

1697 posts in 3156 days


#9 posted 06-09-2010 09:36 PM

I price my jobs on a day rate £120 aday plus material costs so if the job takes 6 days thats £120×6 that gives me a good day rate after tax

-- cut it saw it scrap it SKPE: ANDREW.CARTER69

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Puzzleman

411 posts in 2409 days


#10 posted 06-09-2010 11:38 PM

Div it is so true. When I started my business, it was because I liked wood working. Now I have found that my real job is marketing and sales. If you don’t do the marketing and get the sales, it doesn’t matter how good your product is.

Marketing is the number ONE job.

Jim

-- Jim Beachler, Chief Puzzler, http://www.hollowwoodworks.com

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,

2387 posts in 3011 days


#11 posted 06-10-2010 01:07 AM

Thanks for letting me rant some.

Div, I do think I have a situation I went through in the past that fits the scenario you speak of. A customer asked me to build a very nice wall unit entertainment center. The unit featured two 1/2 pillars that acted as the foundation for the upper cabinets that spanned across where the television sat. I bid the job with what I found to be a fair price. Well, the third time I built those 1/2 round pillars, yes I actually built them 3 separate times, I nailed it and the result was perfect in every way. But I spent probably 6 times as long as it needed to build those and I spent 3 times as much on materials to build them. Shortly after building that huge wall unit, I moved to kitchen cabinets… :)

That job we worked for peanuts!!!

Happy woodworking, Jerry

-- .

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,

2387 posts in 3011 days


#12 posted 06-10-2010 02:17 AM

Div, I looked at your sawmill post. Great deal! And the young helpers are just the best in my book. I am sure we can relate having the two daughters.

-- .

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Wood_smith

252 posts in 2490 days


#13 posted 06-10-2010 03:08 PM

Puzzleman- I loved your line “I ask them when was the last time that you volunteered to take a pay cut from your company.” You hit the nail on the head, and I’m gonna memorize this one for the next time I get asked.

-- Lloyd Kerry; creator of the Kerry-All Pouch, http://www.kerrywoodworking.com

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huff

2828 posts in 2750 days


#14 posted 06-10-2010 04:16 PM

Jerry, I know what you mean about the family comes first and you do what you have to do to take care of them. Didn’t mean to offend anyone and I’m glad you vented some. (This is a very frustrating business at times) LOL. When I first started woodworking for a living, my wife worked full time and that really helped pay the personal bills when things where slow. When cancer took my wife and I became a single parent, I had nothing to fall back on. It was me or nothing…...so I really understand about taking care of the family first. I don’t think there’s a woodworker out there that does this for a living that hasn’t worked for peanuts from time to time. Whether it’s because of the economic times and we need the work or if it’s simply because we’ve under bid a job. The only thing I was trying to warn about, is the habit we can fall into if we’re not careful. The more we need that job, the more we have a tendency to lower the price just to get the job and that can become a habit. I don’t mind sharing my experiences (good or bad) with fellow woodworkers, if it might help them down the road. 2008 was the best year I ever had in the woodworking business as a 1 man shop….....2009 was the worst!!!!! Down 53% from the year before. That sucks. This time last year, I couldn’t find work at all, no matter how I priced it. I thought for sure I was going to be forced into early retirement and end up becoming a Wal-Mart greeter!( you know, the old man that stands at the front door of Wal-Mart and hands out shopping carts). As things slowly began to pick up at the end of last summer, it was really hard not to just underbid jobs to make sure I was getting the work. I’m back on track this year (so far…..knock on wood!) but have no idea how the rest of the year will play out. To go back to Div original post, we will always have a job now and then that we under bid. I love to push myshelf to design something new, which means, I have no idea how long it will take to build it. Sometimes I do alright and other times I’m the monkey working for peanuts. I try to look at the positive side of it. First, I learned something new and expanded my portfolio, and Second, over time, I’ve built a clientle base that is where I get my best referrals from. That’s your best marketing you will ever do, but also takes the longest time to see real results. Jerry, hope the surgery goes well for your daughter. she’ll be in our thoughts and prayers.

-- John @ http://www.thehuffordfurnituregroup.com

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Div

1653 posts in 2405 days


#15 posted 06-10-2010 10:18 PM

Hey Guys, Thanks for sharing your stories! I am part of a family now and the support I get via this little keyboard is simply amazing! John, yeah, I’m at that positive stage now, thanks to you guys! This job will be good marketing, it’s a counter for a new gallery. So, hopefully, good and many referrals. I’m actually giving it extra time for that.

Again thanks John,Jerry and Jim. May your chisels stay sharp.

-- Div @ the bottom end of Africa. "A woodworker's sharpest tool should be his mind."

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