The underpricing thread.

[Mick Dempsey]

10 minutes ago, Hodge said:

There are many reasons people can be cheaper than you also, obviously there is the VAT to start with but in my area I think there are only 2 or 3 that are now not VAT reg. another guy I've seen advertises the fact he is cheaper because he owns his kit and isn't paying a finance on it, I kid you not, he had that on his Facebook ad, thing is all his gear is knackered and looks rough, well it will be as he doesn't charge enough to keep it repaired and renewed. Sometimes when pricing it's easy to promise the earth to get the job but in the cold light of day you think shit, this is gonna be awkward.. I never give a price on the spot now, I come away and have a think and then send it in. If I get it then fine and if not then just move on. I've lost jobs in the past for being too cheap....

Of course, one of the reasons people can be cheaper than you is that you’re too expensive.

[lux]

Just came across this thread and really feeling it right now. 
On a job atm, 4 large dismantles, a smaller one and some other bits. Chip and wood staying on site, figured 5 days with three guys. It’ll be easy… 🤦🏻
One of the lads had to go off on semi-long term sick leave. Managed to cover some of the days then the other guy got covid. Spoke to client and stupidly decided to soldier on and just get it done. Now going into day 7 AND on day one I realised I’d gone over the vat threshold the month before so will have to pay that out of the budget. Might rebrand as a charity. 

Freesurgery …

[IronMike]

Ultimately there are those who are good at their job, but buy work for peanuts. There are those who effectively rob and steal and get away with it for the most part. There are those who are plain shite and either charge loads or practically nothing. Pricing, quoting etc is a dark art and with time and experience you can get reasonable at it but still it's guesswork at best. You win sometimes, and you definitely lose sometimes. I mucked up on my first and only standing sale last year. I got it MASSIVELY wrong, and it cost me a fortune to do the job. Everyone else got paid or a good deal, but I lost out big time. Lesson learned though. Stick to day rate, always!

[Hodge]

Ultimately there are those who are good at their job, but buy work for peanuts. There are those who effectively rob and steal and get away with it for the most part. There are those who are plain shite and either charge loads or practically nothing. Pricing, quoting etc is a dark art and with time and experience you can get reasonable at it but still it's guesswork at best. You win sometimes, and you definitely lose sometimes. I mucked up on my first and only standing sale last year. I got it MASSIVELY wrong, and it cost me a fortune to do the job. Everyone else got paid or a good deal, but I lost out big time. Lesson learned though. Stick to day rate, always!

It's funny but I'm the opposite, I almost never go on a day rate as in the past I have found people treat you like slaves, do this, do that, watching you have a brew and at 4.30 want a huge beech reducing......but your here for the day and there is 4 hours of light left......no thanks. I give fixed prices and always over estimate especial on big stuff, too many surprises in big butts to be cutting them up for peanuts. I always price in a chain or 2.

[Hodge]

Sorry I just re read about it being a standing sale[emoji847][emoji847] sorry🥴🥴

[Thesnarlingbadger]

Quoting for jobs must be one of the hardest things to get right all the time. And I’m finding now that a selection of my regular clients don’t want to pay more ( yes I pruned your Apple tree 4 years ago for £225 but that was 4 years ago and now I have more overheads and am VAT registered so it will now cost you £360). I understand that the cost of living is sky rocketing but I need to make £500 a day after vat and staff are paid to keep the business running. I have found since going VAT registered a few years back my work has shifted massively to the commercial side of things (not the end of the world but the guys moan able wearing hi-viz all the time and hate it when there isn’t a cup of tea all day). The domestic side of things I try and keep cheep but find by doing that I’m shooting myself in the foot. I have just reevaluated my prices and am now charging £300 more on a 2 man day from when I started. Some jobs I’ll drop the price a little if it’s a nice job or I know the customer is friendly but I rarely do this because it’s only me who suffers. I quoted someone £450 for a sycamore take down the other day, half a days work with 3 guys and the customer said she had been given a quote for £250 and could I match it, not a chance. Also I’m fully aware that the staff are going to start needing more money with rising energy costs etc and that is another thing I have to prepare for. Tree work in general has always been a cheep game and prices for work haven’t changed a huge amount in the last 20 years compared to builders or other trades. We had a loft conversion 15 years or so back and it cost around £17k and a neighbour has just had one done a few doors down by the same builder we used for nearly £50k (almost identical work). I don’t see our industry changing our prices like that but then maybe I’m wrong and I’m just looking at my area. I’d be interested to know what other peoples thoughts are on industry prices etc.

[doobin]

34 minutes ago, Thesnarlingbadger said:

Quoting for jobs must be one of the hardest things to get right all the time. And I’m finding now that a selection of my regular clients don’t want to pay more ( yes I pruned your Apple tree 4 years ago for £225 but that was 4 years ago and now I have more overheads and am VAT registered so it will now cost you £360). I understand that the cost of living is sky rocketing but I need to make £500 a day after vat and staff are paid to keep the business running. I have found since going VAT registered a few years back my work has shifted massively to the commercial side of things (not the end of the world but the guys moan able wearing hi-viz all the time and hate it when there isn’t a cup of tea all day). The domestic side of things I try and keep cheep but find by doing that I’m shooting myself in the foot. I have just reevaluated my prices and am now charging £300 more on a 2 man day from when I started. Some jobs I’ll drop the price a little if it’s a nice job or I know the customer is friendly but I rarely do this because it’s only me who suffers. I quoted someone £450 for a sycamore take down the other day, half a days work with 3 guys and the customer said she had been given a quote for £250 and could I match it, not a chance. Also I’m fully aware that the staff are going to start needing more money with rising energy costs etc and that is another thing I have to prepare for. Tree work in general has always been a cheep game and prices for work haven’t changed a huge amount in the last 20 years compared to builders or other trades. We had a loft conversion 15 years or so back and it cost around £17k and a neighbour has just had one done a few doors down by the same builder we used for nearly £50k (almost identical work). I don’t see our industry changing our prices like that but then maybe I’m wrong and I’m just looking at my area. I’d be interested to know what other peoples thoughts are on industry prices etc.

Drop those regular clients. It's honestly the easiest. Being VAT registered is the only way to properly grow a business with the limit as it is. Find clients who expect to pay VAT- and thast's not necessarily commercial jobs. High end domestic clients view VAT as part and parcel of getting work done.

 

Have you considered mechanising somewhat? It's the only route I could find to (vague) profitability.

[Hodge]

Quoting for jobs must be one of the hardest things to get right all the time. And I’m finding now that a selection of my regular clients don’t want to pay more ( yes I pruned your Apple tree 4 years ago for £225 but that was 4 years ago and now I have more overheads and am VAT registered so it will now cost you £360). I understand that the cost of living is sky rocketing but I need to make £500 a day after vat and staff are paid to keep the business running. I have found since going VAT registered a few years back my work has shifted massively to the commercial side of things (not the end of the world but the guys moan able wearing hi-viz all the time and hate it when there isn’t a cup of tea all day). The domestic side of things I try and keep cheep but find by doing that I’m shooting myself in the foot. I have just reevaluated my prices and am now charging £300 more on a 2 man day from when I started. Some jobs I’ll drop the price a little if it’s a nice job or I know the customer is friendly but I rarely do this because it’s only me who suffers. I quoted someone £450 for a sycamore take down the other day, half a days work with 3 guys and the customer said she had been given a quote for £250 and could I match it, not a chance. Also I’m fully aware that the staff are going to start needing more money with rising energy costs etc and that is another thing I have to prepare for. Tree work in general has always been a cheep game and prices for work haven’t changed a huge amount in the last 20 years compared to builders or other trades. We had a loft conversion 15 years or so back and it cost around £17k and a neighbour has just had one done a few doors down by the same builder we used for nearly £50k (almost identical work). I don’t see our industry changing our prices like that but then maybe I’m wrong and I’m just looking at my area. I’d be interested to know what other peoples thoughts are on industry prices etc.

Interesting take on things, I'm very similar although I don't need £500 a day after wages and VAT. That may be where you are loosing some of that work...no offence intended but have you gone over your costs in detail to see if you can trim them down a bit??

[Clutchy]

4 hours ago, Hodge said:

Interesting take on things, I'm very similar although I don't need £500 a day after wages and VAT. That may be where you are loosing some of that work...no offence intended but have you gone over your costs in detail to see if you can trim them down a bit??

£500 gross profit a day is a reasonable ask. I wouldn't be looking to shrink that down at all. 

 

I don't need £1,000 a day or whatever profit, but I sure want it for the stress and work I put in, so I wouldn't be saying no if I could charge it. 

[eggsarascal]

Clients, and must be VAT registered! They are customers, not clients, and there is plenty of work for those who aren't VAT registered. Plenty of one/two man bands stay under the VAT threshold and make a decent living.