Barid,

 

It not about the cost of the equipment, it the value the customer feel they are getting. If you told the customer the job would take 4 day and you get it done in 2 the customer has every right to question you on the price per day.

There is always a preconceived value to the customer. I have seem marble restoration contractor after contractor loose business because after the job was done in less time the preconceived value the customer felt they were over charged. The next time the customer needed work they look for a different contractor.

 

Let’s look at a $2000 investment in a piece of equipment if you are going to use that piece of equipment at least once per week or more it might be worth the investment. But if you are going to only use it once every 2 to 3 months the cost of that investment would probably not be a good return on investment. Now if your company has excess cash then a long term pay back may not be a bad idea. You may find you can take a complete write off on that piece of equipment in one year instead of depreciating  it over the IRS rules.

 

I have operated a restoration company that had marble and stone restoration sales in excess of I million dollar per year and had a net income of 32%. It all about volume and pricing the jobs to keep you guys working 22 days per month, and adding new technicians and build their work load up to 22 days per month. the next thing you need is re occurring income ( Maintenance Contracts)  where you can keep one, two or three guys working 22 nights per month.

 

At the end of the day one can continue to invest dollar after dollar to buy the newest and fastest system but unless you give you customer a value for the dollar they spent ,your repeat business will suffer. I have seem restoration contractor consistently invest in equipment and at the end of the month they have some neat tools but they can’t pay their bills .

 

I can remember when concrete polishing first started guys were getting $2.50 to $3.00 per square foot, then everyone wanted to go big and purchased all this big equipment to do the job faster. What actually happen the competition keep getting lowering their prices and now the price for these guys with the big equipment are getting $1 to 1.25 per sq. ft and if they are working that equipment every day they are losing money.

 

I like to keep thing simple, go after the  sale volume and build my reputation  on fair prices and great workmanship. This is how I built my last marble and stone restoration business and this is how I plan to build my new restoration business.  

 

 

I sure other feel different but I’ll stick with what I know has work for me and other I worked within the past that have great sales, great profits  and they keep their business simple with minimum investment.

 

 

 

 

 

 

John E. Freitag

President/Director

The Stone and Tile School

Office 407-567-7652

Cell 407-615-0134

jfreitag@thestoneandtileschool.com

 

 

www.thestoneandtileschool.com

 

 

 

 

Hi John.  I did bid the job with the Makita in mind.  That being said, you bring up an interesting philosophical point.  My general philosophy is that, whereas I may take into account however long it takes me to get a job done the regular way, If I can get it done more efficiently by being more technologically advanced or smarter than the next guy, I shouldn't make less money simply because I am better at it.  To use a Wild hypothetical example, If I were to buy a $50,000 floor machine that allows me to price a job at $1.00 psf rather than three, I would still charge $3.00 on the assumption that the capital cost of the machine drives up my  sunk costs and my capital risk (maybe I would prie a little cheaper to insure getting th business) , and there would be no reason for me to buy the machine if It didn't allow me to work more profitably.  So If I can get a job done in two days rather than four by investing in a $2000.00 machine and learning how to use it, I think I should reap the rewards.  The bessemer steel process made Carnegie Steel the largest steel company in the world 130 years ago because they figured out how to do it better than the other guys.  Anyway, I'm interested to hear what other people think, because this equipment costs a lot of money and not worth it if I can't use it to my advantage. 
Baird

--
________________________________________
>From the desk of
Baird Standish
Managing Partner
Facility Specialists, LLC
1616 Walnut St.
Philadelphia, PA 19103
Phone: 215-732-7505
Fax: 215-546-9160

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