Your price is too low

Every once in a while a customer will remark that my price is lower than she expected. I always respond that I will be happy to raise my price in order to satisfy her expectations. Of course, I have not had anyone agree to this.

While it might seem odd that a customer would make such a remark, I take it as a bit of a compliment. It indicates to me that the customer knows that I won’t be giving her the cheapest price in town. It tells me that I have properly educated the customer, that she knows I will be offering her superior value, and that she knows that she will have to pay for it.

The sales process is largely one of educating the customer, of explaining the various factors that determine the long-term value of our services. If we are simply throwing prices at customers and hoping that some “stick”, we are doing nothing to distinguish our company or justify a higher price. However, if we have properly educated the customer, she will understand what factors contribute to a higher price. She won’t be surprised by our price–indeed, she will expect it.

One of the biggest complaints from contractors is the seemingly constant refrain of “your price is too high”. While we certainly don’t want to underbid jobs, it can be quite refreshing to hear “your price is too low”.

Tools for estimating

Painting contractors know that they have to use the right tools for the job. A 2″ sash brush is not an effective tool for painting a cathedral ceiling. The same applies to estimating. Using the right tools can make the job much easier and effective.

One of the best tools that I regularly use is a measuring wheel. This device allows me to quickly and accurately measure both interior and exterior surfaces. I have recently begun using an ultrasonic device for interior estimates. I have found the ultrasonic device a little difficult to use for exteriors, as the device needs a solid surface for the ultrasonic wave to reflect from, and these are not always conveniently located on the outside of a house.

A third device that I use regularly is a moisture meter. This is an invaluable tool when moisture problems are suspected, as well as for testing substrates during the job. Images of these devices can be found below, along with links to the products on Amazon.com.

Click here to learn more about estimating paint jobs.

Two mistakes in setting up production rates

A widespread error by painting contractors when estimating paint jobs is to use the wrong production rates. Given that many contractors have extensive experience painting, they incorrectly assume that the craftsmen they employ must produce at the similar rate. But this is seldom, if ever, the situation.

Although you certainly do not desire craftsmen who take far too long to prepare and paint a surface, you should also supply them with a realistic amount of time to carry out their work. This may be figured by talking to your painters, timing them, and utilizing bidding manuals.

Production “shrinkage” is a second cause of erroneous production rates. Many things take place throughout the course of the day that do not directly play a part in preparing and painting a substrate. Activities like getting a drink, going to the bathroom, walking to the van to get supplies, etc. All of these activities take time, and during a typical day the time can be significant. It is usually accepted that a painter will just have 6.5 productive hours in an 8-hour day (or 18.75% of the day).

If such actions are not correctly calculated into the production rates they usually negatively impact your profitability. After all, the painter has to still be paid for the full day.

The easiest way to account for shrinkage is to modify production rates. Assume that it takes 30 minutes to prepare and paint a window. But you understand that 18.75% of the painter’s time on the job site is not used in actual production. If you boost your time for preparing and painting that surface by 18.75%, or 5.6 minutes, you have adjusted for the shrinkage.

If you utilized your “standard” rate of 30 minutes, you could expect the painter to paint 16 items of the surface per day. With the modified time of 35.6 minutes, you now require him to prep and paint 13.5 items per day.

To look at this another way, if your hourly rate is $40, you would be charging $20 per door at your “typical” production rate of 30 minutes per piece. You would count on income of $320 per day. However, the painter would actually just paint 13.5 items per day and produce $270 in income, or $50 less than anticipated. This can grow to be a significant sum of money over the course of year when numerous painters are involved.

These principles are equally accurate whether you utilize subcontractors or have employees. How you pay your production people is unrelated to this concern. In other words, a painter will have about 6.5 productive hours a day regardless of whether he is a sub or an employee. Accounting for this in your production rates is an important component of setting up accurate rates.

Absent correct production rates, accurate and profitable bidding is virtually hopeless. And to get accurate production rates, you must have realistic expectations of your employees, as well as consider all of the factors that influence those rates.

Efficiency on the job isn’t an accident

Efficiency on the job site does not occur by accident. It requires specific actions. As with any aspect of our business, if we want consistent results then our actions must also be consistent.

While the specifics can vary widely between paint contracting companies, certain key principles must followed. These principles are organization and planning. Without both inefficiency will result.

Most jobs are essentially the same. Work must progress in a certain order, and specific issues must be considered and addressed. While the preparation may vary, each surface requires some type of preparation. While masking and protection methods may vary, some type of masking and/ or surface preparation must occur. While the extent and type of clean up will vary, some type of clean up must occur.

The order of these tasks is generally the same, as are the specific steps taken to achieve the desired results. Problems occur when those steps aren’t followed, or are followed out of order. When those steps are in the form of written procedures, and properly trained, job site efficiency can increase.

With the proper planning and organization we can identify the precise steps that should be taken on any particular job. The Project Manager then has the responsibility of ensuring that those steps are followed.

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