On my recent "firing clients" thread... I had a conversation kind of like BPs (only mine was nowhere near as eloquent) with my customer. Same thing... shopped my products... wanted to provide his own... the real thing that got me was after I assumed we had an agreement like BPs he started in on my labor... DONE... your fired.

Now we are back on the job as I'm sure he saw the nests of wire... the satellite wiring off of the roof near the top of a 32' ladder... the untrimmed enclosures, etc. and said to himself "MAYBE I need this guy afterall". I've never before had a firing bring around a fresh start and I shouldn't start claiming this one has yet as I don't want to jinx myself. SO far... so good though.

Call it a grassroots movement, illegal collusion or whatever but wouldn't it be nice if we all somehow could get on the same page as our profits erode and follow a business model where we properly charge for labor and time? I know such a thing is impossible but if most of the competent integrators in an area charged the same amount and had the same principle (along the lines of Larry's... which I intend to use the very next time... thanks Larry) as far as billing for time... the clients could do all their price shopping and feel like they got the best deal then on top of it they paid to have the best girl or guy put it together. I'd rather see this standard than Wesley's.

Newbies getting into this business with entrepreneurial seizures look at say a 10K job and think... OK I'll drop this whole system down to $500.00 profit and then I'll install it for $800.00. It'll take me two days and I'll make $1300.00. If I can do this every two days and I work 20 days a month I'll make $13,000.00 a MONTH! YEAH! Then of course they get in and realize...

A. That there are 2 hours behind the scenes for every one hour in front. No one is there to bill for them... purchase for them... propose systems for them, etc. etc. etc.

B. That while they are working at installing... no one is selling for them so for some reason those clients just don't line up at the ratio expected.

C. That they never even thought about the time and rate thing and they don't have a business plan to account for extra hours spent doing all that equipment research when the wrench gets thrown in of clients sourcing their own gear... soon a 2 day job becomes a 4 day job with lots of extra time and profit sucking Home Depot runs but there they are with that fixed bid "waiting to make money on the next one".

D. That when the next one does come... they need the down payment money from this new one to pay for the old one which has now had a two week delay waiting for some Kramer VGA switch they found they would need because the customer threw his laptop in the mix and they don't have a proper change order form so they are providing for free "this time"... you know... gotta have a good referral.

E. That to fill in time and get a little closer to their monthly goal they will throw in the wrong job from the wrong client in the mix... and do this not once but multiple times.

F. That they soon are too busy to see straight and need to hire an employee or two...and that once they do, they never thought of employment security, health insurance, vacation pay, L&I/OSHA... and that it now costs them double what they pay the employee just to have him/her... and that they can throw an extra 10+ hours per employee a week into managing personnel.

G. That they've ultimately done nothing more than buy themselves a high stress job... Welcome to the CI world!

It goes on but my point is that it is never easy and the only real way we will ever be successful is to charge appropriately for time spent. Electricians and Plumbers have done this for years... most plumbers I know aren't counting on margins from pipe to keep them alive... when they roll a truck... be it them or one of their employees in it... IT'S MAKING MONEY!

I'm not saying that clients like Dawn's don't piss me off because they do. Try living and working in Microsoftieland... where every client spends most of his day wandering the halls of the great campus wondering what the heck they are supposed to be doing and has LOTS AND LOTS of extra time to get savvy on his/her new hobby and find the lowest of lowest prices. I've recently taken to a Big Papa approach with these guys and we are starting to get that weekly cash flow on consultations and designs and things are looking a lot better because of it.

CHARGE FOR YOUR TIME! ALL OF IT! Don't back down because these people really do need you and there is no way they should marginalize your value.

I hope you respond with Larry's exact words Dawn.

There is an old saying:

"Time is Money"

I recently had a client who is a big DIY'er, who basically wanted me to provide him a shopping list. On the list (of all stuff he can't buy on the internet), I also added a consultation fee for creating the list, and one for his system design (tell him what wires to pull where). I sent him an invoice along with the list.

He called me and wanted to know why I invoiced him for the 'estimate'. I told him that the 'consultation fee' would be applied to any purchase, but we were not in the business of creating system plans for people at no charge. This customer owns a tree trimming business, so I asked him if he would like it if I asked him to come out and tell me which trees to cut down, how to cut them donw, then went out and rented a chain saw and did it myself? He got the point.

Then he says "Well, I guess I assumed you guys made all your money in the equipment." I told him that internet shopping pretty much destroyed that, so the only thing I have to sell is my knowledge, experience, and skill. I told him the Kellogs Corn Flakes story (search for it in a previous post), and he again agreed with me.

Then this guy has the balls to ask me to tell him where to run the wires ANYWAY!

That's when I told him I'd be happy to draw up a detailed plan on his blueprints, at a rate of $500/hr.

He thanked me for my time and hung up.

Moral of the story....

You are ENTITLED to make money for your knowledge, skill, labor, parts, and anything else associated with your business. Those classes you take to learn about HDMI or sound deadening material COST YOU MONEY, even if they are 'Free Vendor Trainings!' in time lost selling (as stated above), installing, etc.

"Time is Money"

Say it with me, gang.

Fred

After our email with the restaurant analogy and explaining our personalized service and track record, etc... the client came back and wanted to go ahead with the job.

My husband was actually the author of that email. He's much better than I at customer service. :-)

Dawn

what is the cor flakes analogy...I searches for corn flakes and got 220 responses...the search on this thing needs boolean...

Dawn, I would have just sent a response back stating that "Well I can't beat those prices so I guess you'll be seeking proposals from other companies." Thank you and good luck.
Oh Marty in closing I would like to say that your calculations are off a bit but I know where you went wrong.
Check to make sure that there's no cranial obstructions in the lower GI tract.
That will do it every time.

haha..boolean logic..haven't wrote one of those maps in years!

Jason, would it be permissable to use your Customer Supplied Equipment Policies Form for my clients? It is very well laid out and I am actually working on a system now in which the client has provided 10 new flat panels he bought over the internet. It came down to within less than a week to install and he hits us with "I assume you will provide the mounts and all the hardware?"
I asked him if he knew what happens when you "assume"...and told him it's the ME part that really gets my feathers ruffled...

[Link: remotecentral.com]

Scroll down to #15

Fred

Fred,
I was just about to type my opinion when I went and read your corn flakes analogy and it matched my thoughts. It's perfect.
I think the restaurant analogy is weak. A restaurant doesn't break down the price of every item and ingredient and the time it took to prepare it.
People go for the meal and the experience.
If you can't sell the meal (the package) and the experience, someone else will or you'll be left installing crap they bought themselves.

More and more customers want me to install components they provide. I just add a couple hours to the bid and hit them on the installation related parts that they can't easily find elsewhere (bulk RGB cable, connectors, custom wall plates, etc). When something breaks (which rarely happens) I tell them with a clear conscious to call the company that sold them the equipment.
The restaurant analogy makes sense, but when it comes to consumer electronics some people think they know everything and will shop the equipment for the lowest price, so get them on whats hard to find, good custom installation service. Make your money on labor and the install related parts and be glad your not responsible for their equipment.

We've all been down that road before. First - most manufactuers won't support any sales from the internet. only from an authorized dealer or reseller.

This client is looking for a BB or CC install and not a pro design.

I posted that form over on IP a while back. If you like, I'll send you the .doc and .wpd files to make it easier on you. I still have it all in a zip file.


The only things that I ask are that you 1)modify it as much as you need, and 2)if you make it better, please share the better version.


Jason

Jason I would appreciate a copy shot to [email protected] if you have a moment.

Any improvements will be available to all. (If I could improve it).