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So What Would You Do? (WWYD)
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otb
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So What Would You Do? (WWYD) - August 9, 2013, 03:56 PM

So, I got a call this afternoon (Friday, 2:30pm) from a contractor I've done some work for in the past. He had a hotel client that needed 4 sectional sofas recovered (16 long cushions, all custom button tufted) and had a short deadline (Had to be back in the facility no later than 6AM this Thursday).

I called a couple of other folks that do this kind of work and they were all available, but needed double rate for this kind of work as they all knew it would be 18-20 hour days till the job was done.

I went back in the lobby and told the contractor and the Hotel GM that we could do it. They GM wanted a price. I went back out to my truck, figured out hours and double time rates, went back in and gave the contractor my price. Contractor told me he would put it to the manager and would call me.

A half-hour later the contractor called me, very upset. The GM told him they had budgeted less than half my price for the job, and why was it so high? I told the contractor that I had to bring in people at time-and-a-half, and that they expected to get paid COD.

He told me to cut the price in half so "we" could get the job and hopefully get some steady business from the hotel.

What would you do? (I already did what I did, now I'm second guessing my decision).


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August 9, 2013, 04:01 PM

I would tell them there are plenty of other hotels to get business from! Got to pay a premium for a short deadline.
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August 9, 2013, 04:09 PM

the only catch is that once you lower the price now...they may always come back asking for a low ball price...and fast turnaround.....


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5 yrs till Brood X emerge
 
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August 9, 2013, 04:11 PM

You give them your best price. If they don't like it they can find somebody else to do it. Just because they think you should do it for less doesn't mean you should bow to them. They'll wave the old story.... do this and there is more to come. More often the promised business just doesn't materialize.

But you have to weigh your need for work & business. If you have plenty of business, stick w/ your price. If you need work, maybe give them a price somewhere between what they want, and what you quoted.

You are not in business to break even.

My $.02. I gave a shot at running a small machine and fabrication operation years ago. I quickly realized too many people expect you to work for free or at cost. Don't do it.
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August 9, 2013, 04:54 PM

They already told you they need you more than what you need them. I would have told them "sorry, that's the best I can do". Let them simmer, then follow up with a slightly better price (if you have room) with the "I'll do it as a one-time promotional favor to acquire a new client, you need to let me know by the end of day".

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August 9, 2013, 05:37 PM

Most people have zero fucking clue what it actually takes to get shit done, and they want it done as cheaply as possible. You figured out an actual price that would give them what they want in the time allotted, and they balked at the price. I'm sure they could find someone cheaper who may or may not meet their deadline with a lower quality end result, their call.
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August 9, 2013, 05:58 PM

If they have no flex in their budget, make them flex the time. You can do it for regular rate but they will be back a week later. A good GM should be able to make that call and you will have a hotel as a reference and source.

Once you cut your price, the bar is lowered forever. One time promotions means I get that every time from you at a minimum from now on


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August 9, 2013, 10:25 PM

Fast, Inexpensive, or Good.

Tell them to pick two. Explain that the timeframe increases the cost. Give them an alternative timeline that is cheaper. They can get it cheaper, they certainly can. But their timeline is what is dictating the cost based on the work needed.

I can sympathize. I do software and regularly get told stuff like "Don't design, just build", and "can't you just throw that together?". If it's so easy and your customer can price it out exactly, why aren't they doing it instead?


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August 10, 2013, 01:09 AM

Quote:
Originally Posted by vonstallin View Post
the only catch is that once you lower the price now...they may always come back asking for a low ball price...and fast turnaround.....
All advice in this thread is good, but this is what I was going to say. Don't shortchange your rates, cause they'll be expecting it in the future...and that continued business talk is 50/50 at best.
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August 10, 2013, 05:14 AM

Thanks, everybody for your input. Seems like everyone here is of like mind.

Quote:
Originally Posted by morsetaper2 View Post
You are not in business to break even.

My $.02. I gave a shot at running a small machine and fabrication operation years ago. I quickly realized too many people expect you to work for free or at cost. Don't do it.

This.


I'll tell you what I did do.

When I figured out the price, I added a hefty "Aggravation Premium" for the short notice and shorter deadline. Like I said, to get this done, my staff and I would have to work 20+ hour days for the next five days, PLUS, I'd need to put my other jobs for other clients on hold, which means phone calls and PO'd customers.

Another piece of information I found was that this hotel group HAD a regular contract furniture service, but they were doing emergency work for another hotel that had some water damage and couldn't pull anyone off the job just because of this outfit's piss-poor planning. (The reason they were in such a hurry to get this done was that they were having a franchise inspection Thursday AM, and if the units weren't in good shape, they could lose their franchise flag; if this was such an important issue, then it had likely been an ongoing issue for the franchisor, which means these guys had been putting off getting it done for a long time and it was pissing off the home office.)

On top of that, the contractor in question is very "Slow Pay"....the last work I did for him required numerous calls to get paid, and when it did come, it trickled out over six months. I wasn't feeling very charitable, so I threw in the COD requirement.

When he told me I would need to drop my price, I called him back and told him I could drop it 7%, but no more. He then told me I would have to drop it "at least" another 30% to get the job and also waive the COD requirement, as "They don't do business that way."

I told him that COD was non-negotiable and that the 7% discount was as far as I was willing to go. He started to lecture me about "having to make some sacrifices to get my foot in the door".

I told him to have a nice weekend, and hung up.


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August 10, 2013, 05:15 AM

Quote:
Originally Posted by MudDawg View Post
Fast, Inexpensive, or Good.

Tell them to pick two. Explain that the timeframe increases the cost. Give them an alternative timeline that is cheaper. They can get it cheaper, they certainly can. But their timeline is what is dictating the cost based on the work needed.

I can sympathize. I do software and regularly get told stuff like "Don't design, just build", and "can't you just throw that together?". If it's so easy and your customer can price it out exactly, why aren't they doing it instead?
THAT is EXACTLY what I told him.......


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August 10, 2013, 05:30 AM

Quote:
Originally Posted by otb View Post
Thanks, everybody for your input. Seems like everyone here is of like mind.




This.


I'll tell you what I did do.

When I figured out the price, I added a hefty "Aggravation Premium" for the short notice and shorter deadline. Like I said, to get this done, my staff and I would have to work 20+ hour days for the next five days, PLUS, I'd need to put my other jobs for other clients on hold, which means phone calls and PO'd customers.

Another piece of information I found was that this hotel group HAD a regular contract furniture service, but they were doing emergency work for another hotel that had some water damage and couldn't pull anyone off the job just because of this outfit's piss-poor planning. (The reason they were in such a hurry to get this done was that they were having a franchise inspection Thursday AM, and if the units weren't in good shape, they could lose their franchise flag; if this was such an important issue, then it had likely been an ongoing issue for the franchisor, which means these guys had been putting off getting it done for a long time and it was pissing off the home office.)

On top of that, the contractor in question is very "Slow Pay"....the last work I did for him required numerous calls to get paid, and when it did come, it trickled out over six months. I wasn't feeling very charitable, so I threw in the COD requirement.

When he told me I would need to drop my price, I called him back and told him I could drop it 7%, but no more. He then told me I would have to drop it "at least" another 30% to get the job and also waive the COD requirement, as "They don't do business that way."

I told him that COD was non-negotiable and that the 7% discount was as far as I was willing to go. He started to lecture me about "having to make some sacrifices to get my foot in the door".

I told him to have a nice weekend, and hung up.


If you are not in a good position to do the work, dont do it. I think you handled it perfectly.

Sounds like this place got a bad management from the beginning.


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otb
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August 10, 2013, 05:59 AM

I had done work for another hotel group; it was always the same....I'd get a call Saturday night; they HAD to have me come pick up a piece and do the work "immediately"... everything was done on an emergency basis. Then, they'd pick the job apart, demand it be redone in a different shade, ....and then try to knock down the price, and then....I'd wait 3-4 mos to get paid. They gave me A LOT of work, but it was major PIA and in the end, I told them to find someone else.

I hate giving up a job, but some jobs for some clients aren't worth taking on.


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I'm a llama again!
 
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August 10, 2013, 08:33 AM

Pull a wheelie one finger in the air.


Yeah I am old enough to know better. Thing is, I just don't care.
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5 yrs till Brood X emerge
 
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August 10, 2013, 11:17 AM

I love how larger businesses agree to net 30 payment terms yet stretch the payments out over 3-4 months or more! In essence its an interest free loan. If they need a loan they should get one from their banker.

Small businesses have to make payroll, purchase & inventory supplies, product, & etc. When I need a loan I go to my bank. When payments get stretched out it really hurts the cashflow of a small business.
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