Comparing business methods

[SS Kanga Hire]

I'm curious to know how others operate, so here's what I'm doing at present: I own two Kanga SSLs; one Kid (small machine) and one 8 Series (equivalent to S70 Bobcat.) I have two guys who subcontract to me. They own their machines. One has a Kubota K008 and the other has a Case loader that lifts about 500kg at a time. I pay for advertising/find the work and do the estimates, and they just turn up and drive their machines. I pay them about $15 less than their normal hourly rate, since I'm incurring costs to get the work. I know that the biggest weakness most tradesmen (these guys are licensed, structural landscapers by training) have is the administration side of their business, so I have deliberately set things up to minimise the amount of paperwork they have to do in order to get paid. They simply send me an invoice at the end of each day of work, for the number of hours worked and I pay them EVERY DAY. Because they know they will get paid immediately, they are willing to do work at short notice and they are extremely happy about not having to follow up invoices/chase money from clients, etc. I get great work and loyalty from these guys by making their lives easier and paying them promptly. I honestly cannot understand why other people don't do the same thing! Another thing that distinguishes my business from my competitors is that I have a mobile EFTPOS/credit card reader which my clients can use to pay their invoices. This means I get paid on the spot and my clients get the rewards points for using their credit cards (if they have a rewards scheme, which most do). I tell my customers up front that they must pay their bill on each day worked. The machine I have is supplied by the largest bank in Australia, so my customers know it is a secure and legitimate transaction. Again, it makes things so quick and simple that I am at a loss as to why others aren't doing it. One other thing I've found that seems to work really well is simply being willing to actually go and meet potential customers face to face, rather than trying to give quotes over the phone. Women are especially responsive to this. How does this compare to how you guys operate?

 

[Tazza]

$15 per hour less is a good deal for them. You do all the work chasing up the work, they just turn up. With the quoting, what happens if it takes longer? or do you just quote that it "should" take this long?
I like the idea of the mobile CC machines, they are getting more popular, especially at the local markets. I'm also with you on rewards systems offered by the banks. That encourages people to pay with cards on the spot.

 

[SS Kanga Hire]

$15 per hour less is a good deal for them. You do all the work chasing up the work, they just turn up. With the quoting, what happens if it takes longer? or do you just quote that it "should" take this long?
I like the idea of the mobile CC machines, they are getting more popular, especially at the local markets. I'm also with you on rewards systems offered by the banks. That encourages people to pay with cards on the spot.

Yeah, it is a good deal for them but it works out pretty well for everyone - I make a percentage on top of what I pay them, plus I also have revenue coming in from my own machines. As far as quoting goes, I don't do "quotes" as such. I give Estimates, with plenty of caveats and exclusions. I make it very clear to my customers that I expect the job to come in at X amount but that they need to be prepared for Y amount under Z circumstances. I also tell them that it is my policy to deliberately Estimate on the high side, since that is more honest and realistic than giving them a BS low-ball figure. This is an approach that seems to work very well. For some jobs, especially excavation work, I simply tell the customer the hourly rates for excavation and loader services, with an informal estimation of the number of hours required.

 

[Tazza]

Yeah, it is a good deal for them but it works out pretty well for everyone - I make a percentage on top of what I pay them, plus I also have revenue coming in from my own machines. As far as quoting goes, I don't do "quotes" as such. I give Estimates, with plenty of caveats and exclusions. I make it very clear to my customers that I expect the job to come in at X amount but that they need to be prepared for Y amount under Z circumstances. I also tell them that it is my policy to deliberately Estimate on the high side, since that is more honest and realistic than giving them a BS low-ball figure. This is an approach that seems to work very well. For some jobs, especially excavation work, I simply tell the customer the hourly rates for excavation and loader services, with an informal estimation of the number of hours required.

That is a very wise way of doing it. Others that low ball get the job, then it takes longer and they tell them the new figure and the customer is more likely to be angry about it than if they were given a more realistic figure.
There was a member on here i think that quoted a figure for a job, the customer knew there was rock under there and when he told her that it was going to cost more after he hit it, she would not budge saying "you quoted me this much" as he was that far in, he had to keep going or get nothing for the work he had already done. Not sure if he even broke even.

 

[SS Kanga Hire]

That is a very wise way of doing it. Others that low ball get the job, then it takes longer and they tell them the new figure and the customer is more likely to be angry about it than if they were given a more realistic figure.
There was a member on here i think that quoted a figure for a job, the customer knew there was rock under there and when he told her that it was going to cost more after he hit it, she would not budge saying "you quoted me this much" as he was that far in, he had to keep going or get nothing for the work he had already done. Not sure if he even broke even.

Yes, I read that one just recently. IIRC, it was for digging out a cattle grid trough or similar.