Very good post, Job. But I'll take issue with just one point.

I owned and operated several businesses during my career (now retired), and I was (mostly) successful with all of them. One thing I learned early on was that if I was going to make a decent profit, the customer had to pay for EVERYTHING. That includes ALL of my time plus ALL operating expenses. Of course, there were many things not itemized on the invoice, but they were figured in. That includes time spent driving back and forth (plus gas and vehicle maintenance), figuring out estimates, and yes, even giving advice.

Each of us has the same amount of time available every day to make a living, and those hours are far too precious to give away a single minute.

John,

That's obviously some sound business advice, and I wouldn't want to argue with that.
Still, in my egg-headed stubbornness, I tend to look at it from a somewhat different perspective.

First of all: I don't have the compelling need or desire to be wealthy. As long as I can support myself and my loved ones, pay the debts in in a way that keeps the bailiffs and judicial executors from my door, it's fine by me. I live in a small town, with a very high mean income profile ( second highest in the whole country ) and I'm acquainted to quite a few VERY wealthy people. They're not the least bit happier because of it, the opposite seems more true in most cases. I wouldn't want to switch places with most of them. Yes, I would like to to be able to buy the equipment that I think I need and that would make my work that much easier/better/healthier - whatever. But somehow that inability to cater to my direct "needs" hightens the enjoyment whenever I do find a way to afford it. It's a balance thing, I guess.

And then again: I like to consider myself as a craftsman. That's what I like to do. I like to be quite generic, not stuck to one set of tricks. Among other things I've been a professional CAD / GeoSystems engineer, and have been developing information architectures to suit. At the risk of sounding arrogant: I was very good at that. I've been "detached" to other companies for about five to six times the hourly rate that I charge, and it was willingly payed. But I found that although I very much liked working with the people involved, and delivering something that they would be satisfied with - I didn't really like the actual work - it was just a means to an end.
In the distant past, I've been an electronics engineer, a mechanic working on everything from ships engines to fast two stroke racing engines, and an ecological farmer, to name a few.
I'm not a very good carpenter, but at least a decent one. I build furniture, but there are others who's craftsmanship I can only admire without any hope I will ever reach that sort of perfection. But I'm proud of what I make, even if it's not going to end up in the Smithsonian.

And there's the bottom line for me: I like to earn my living doing what I like. Sometimes when I do an estimate, there's a disproportional amount of work involved. Just a couple of months ago, I did an estimate on a tree job ( I do a treecare service as well ) and my estimate was actually accompanied by an addendum that could very well be used as a complete VTA or visual tree assessment report. I didn't charge for that, but made it clear in the estimate, that when I would get the job, the report would be  factured in. I just put in the request that whenever they would like to get the job done by a competitor, I would like them to consider the report as confidential, and not to let the competitor read my notes. I really like my competitors in that field, for most of them are great guys, but I see no need to do their work for them without any return. I'll hang in my climbing belt doing that job the first week of May - the customer was in awe with my estimate, and wanted me to do VTA's ( paying work ) on a couple of other trees, and the neighbour showed quite some interest as well.

I make good estimates, and put a lot of work in them. I deliver sound advice, at least to my knowledge. Actually, I think I'm a better advisor then I am a craftsman. But that's just not what I want to earn my keep with. Not factoring them in is my way of keeping myself on edge, and delivering the quality that I like to deliver. Whenever a customer wants to pay for an "advice-only" job, that's fine by me.

And that about sums it up, I guess. I like to see the usual estimate and the advice I give as an investment from my part. One can never be sure about returns on investment. But If I don't want to invest in a job - how can I expect my potential customers to do so? After all it's rather a plunge to sign a contract, especially when you've never dealt with the craftsman before, and all you have is a recommandation, or word-to-mouth advertising to rely on.

Perhaps my business-model isn't very sound or adviseable. You may very well be right there. But it FITS me, it fits who I am, and the way I like to look at the world. So as long as I'm somehow able to keep my business running, I'll stick to it. Though I appreciate the advice VERY much ! ( I however hope you won't charge me for it....  ) I hope you won't mind me carrying on as is...



Regards,

Job

Brice, I'l give ya a thumbs up for that one.  I'm not out to change the world I'm out to make a living.

Per you arn't auctioning off your reputation by installing home depot products or doing odd jobs so long as you maintain quality work.  I refuse to do work that I believe is fundamentally wrong and the end working result will unsatisfactoy; but that being said I will install lesser quality products to reduce overall price.

I think sometimes we get so wrapped up in our egos that we can't see the big picture. 

Rick,

Greetings, my friend. 

I agree with you 100%.  It makes no difference what service you provide, there are always those who are price sensitive and don't seem overly concerned about the quality of the service they receive, although they may have a change of heart after they receive the finished product.

As an accountant, I used to have my own practice.  If I received a call from a potential new client who stated that they had been referred by an existing client, I knew that it was probably a "go".  They were aware of my pricing structure, the quality of the service I rendered and the accuracy and timeliness of the product.

Often the call would begin, "I got your name out of the phone book.  How much do you charge?"  At first, my answer would revolve around the complexity of what was required and that a face-to-face would be advisable.  Their reply would be that they would call back.  Never happened.  After awhile my stock answer became, "I do not quote prices on the phone".  Same response or lack thereof from the caller.

I was at the lower end of pricing schedule.  But regardless of what you charge, there will always be someone less expensive.

Neill

Have you ever messed with installing "cost effective" items?

Most times it takes more time.

My time is worth the same no matter if I am installing a 25k kitchen or a 200 dollar pos door from home cheepo.

6/10 people probably don't like my prices, that's fine.

I can go broke quicker trying to work for everyone vs. sitting on the couch playing video games, waiting on the right job to start.

Sorry, that is just how it is.  It costs me $500.00+ each week just to be my own boss.

In a previous life (about 10-20 years ago)  we installed Big Box store kitchens, both in-store displays and mainly retail sales.  Name a national store in Chicago at that time (a couple mentioned in this thread were Major customers) , we installed their product.  At our peak, we had 30-40 crews.

Best materials? No.  Did we demand the best practices from our installers?  Absolutely!!!   Who gets hurt from this business plan?  I advocate nobody.  The customer generally knows the product level they are buying, but still deserve the best installation techniques. 

Now:  For many reasons, I am in a new life, installing very high end cabinet and crown jobs on my own.  I am lucky that I have been "somewhat" insulated from these current tough times, but I am taking some jobs that I would not consider a couple of years ago.  Some even involving materials that I would prefer not to use.  However, I still give it my all to install those products professionally and to the highest possible standards. 

Again I ask, who gets hurt from this plan?

I am very, very good at what I do;  but I am not an artist, maybe not even a craftsman.  I provide a professional service to the buying public.  I will continue to provide what the buyer wants.  I'll leave philosophy to those that would prefer to pine for the good ol' days.  No street corners or sign boards for me!

Dan

About 30 years ago when Stowe began selling EFIS around here many commercial contractors wouldn't touch "that junk".  It's not a 'permanent' building material, in their eyes anyway, and they didn't want their name attached to it.   Roofing contractors had the same feeling for rubber roofs.

Dignity.  I think it's the difference between a job/paycheck and putting your soul into your work.  Ever seen a building the craftsman signed?  At the glass warehouse at Kokomo Opalescent Glass (KOG for short  ) the carpenters signed and dated the trusses.  We have friends who discovered the plasterers signatures when they were renovating their old house.  Those signatures are now framed and exposed behind plexiglass in their living room.

For some, the entire job, including what is installed is important too.  When we cheapen our materials, we do the same to our trade.