Are you plagued by “low-ballers” ? Are they really low-ballers, or just guys with lower overhead ? Or maybe, they are uneducated about the ways of the business world.
I tend to think both is true. They may have low overhead, but don’t actually realize it – and just quote numbers they think they need to have in order to make a viable profit (at least in their minds). Many of the high end contractors started out small. I started by putting out flyers in the neighborhood (back in 1978) advertising for residential accounts. I figured up how much I needed for the time to be spent, doubled it and shazaam, I had my price for the customer. Unscientific at best. Likely “low” too. I was making a viable profit – or so I thought.
Most small guys, just starting out, figure if they have money left over after gas and pizza, they made money. No thoughts of overhead recovery – no potential equipment replacement costs – no thoughts for return on investment. I’d venture to say, these guys don’t view it as a business and as such, don’t even know they are “lowballing” the pricing.
I was fortunate that after a couple years an established local guy took me under his wing and taught me about all the business stuff related to his snow business. I listened and learned.
Then he said something I never, ever forgot – in response to my question “Why are you helping me?” His response was – “Because you’ll never be a threat to me.”
Oops.
Be careful what you say to “lowballers”. Educate them if you can. But do not belittle them. If they DO become educated, they may be your next worst enemy.