Bidding For New Power Wash Contractors
Or How To Not Lose The Farm The First Year In Business
An improper power wash bid is what puts most power wash companies out of business in the first year. They don’t know how or why, and they never have a chance to really find out. These power wash contractors are often unsure if they bid too high or too low, they often will just keep dropping their price until the customer says "Yes". This bidding method ensures that the contractor will lose the maximum amount possible on every power wash job, which probably wasn't the original goal.
Getting a fair price for everything you power wash is essential to your survival as a contractor. Bidding high means you will starve, and bidding low means that you’ll lose your shirt. Bidding must be responsible – for your sake as well as for the rest of the people you bid against.
The first thing I am usually asked by contractors is “How much would you bid for this power wash job in your area?” When I answer, I often hear “Well, around here no one will pay that much”. Whether this is true or not, whatever you believe is true will inevitably turn out to be a fact. That is the power of our attitudes. If this is your approach to your business, rest assured that you are headed for disaster.
We could talk all day about marketing your power wash company, but what good is making the phone ring if you can’t get the bid right?
The basic facts about bidding are that you need to achieve a certain amount of income (sales) and a certain amount of margin (the amount beyond your costs) or there will be no profit. Most folks in this business are looking for about $100 per hour as the amount needed to assure profitability – particularly if your business is seasonal in any way.
There are a number of factors that work behind the scenes to give you a number like that. Most important is that you achieve some level of expertise before you can hope to achieve $100/hour. In other words, if you are a “newbie” and don’t have professional habits and techniques nailed down yet, you may have to settle for $60-$70/hour at the start. As your efficiency improves, the amount of time you spend on each power wash job will naturally decrease – and the amount you earn per hour will increase automatically. The faster you get to $100/hour, the more likely you are to survive as a power wash contractor.
Too many people who are new to the power wash industry assume that a low price is the only way to get jobs. In truth, they are trying to “steal” jobs from experienced power wash professionals by under-pricing because they feel that is the only way to get started. After watching this for a number of years, I can tell you that these folks are usually the first ones to go out of the power wash business in their first year or so. The customers they are able to pull in with low prices are the same customers who will slow- pay, try to get extras for free, and refuse to pay more when you have more experience, etc.
The best way to get jobs and maintain enough profitability in power washing is to differentiate yourself from the competition. Give better service, with similar prices, and you will get the job. Present better credentials (such as Certification) with similar prices, and you will get the job. Be more visible, with similar prices, and you will get the job. Many business books will give you even more ideas, but you get the picture. Build a better mousetrap, partner.
So how can you achieve similar (professional) bid prices? You might be surprised how many contractors will share their bid process with you. Check out a few of the BBS’s out there for some ideas. Hint: Don’t just jump on with a post asking for bid methods and prices in your area. Instead, take some time to use the search functions on these bulletin boards. A wealth of information has already been written.
Another suggestion is that a few internet sites offer a range of typical charges for certain kinds of work. These are basically national averages, but they can be a great starting point. If you are calling to place an order, you can ask your SBSMD Rep for an informal opinion of typical charges for the work you are doing, too.
A real-world word of caution: If you start out in business trying to steal customers with price, someone will come along and steal those same customers from you with a lower price. Customers interested in price will never be loyal to you. It is far smarter to win customers by firmly establishing your reputation for quality work and good service.
A second caution: The hardest thing to do for any business owner is to raise prices to existing customers. If you get a job with a “lowball” price, how are you going to handle that customer next year? How are you going to treat the bargain-hungry friends of that “lowball” customer who have all been told that you work for peanuts? How will you gain a reputation for quality or expertise if the only thing you sell is price? If you are going into residential power-washing, and would like to take a class that teaches you marketing and bidding (with realistic numbers) along with all of the techniques and shortcuts we have learned over the years, Contractors Foundation teaches folks how to power wash and all of the 'ins and outs'.