How To Price Your Fake Rock Project
One of the more challenging questions you run into as a business owner is how to price your work. In a general sense the simplest answer might be “as high as possible”. But like everything this can be taken too far…….in a sense. You can end up damaging your brand if people, (your clients, prospect and fellow tradesmen) think you’re being greedy. The problem is one person’s “greedy” may just be their sense of value or self worth. Especially in areas of creativity. Defining value in the creative arts can be vary arbitrary and fickle. The beauty of our systems is that over time things do tend to balance out. The greedy folks get humbled and the humble folks can get esteemed. Not always or every time. But generally… But back to the question. How to price our work?
With people there exists in any marketplace two things. What people in general think is a fair price and secondly what the actual “market rate” might be for a given product or service. What people think is fair will fluctuate based on who you’re talking too of course. But what the market value or rate is is more concrete. It is determined by supply and demand. Lots of available commodity or product, the price drops. Less of it, the price goes up. Basic stuff. In the category of doctors and lawyers etc. the years it takes to become one comes into play. As well as the rarity of the skill sets, (how many people can do something out of the overall population). Think of professional athletes.
RARITY
A number of factors go into pricing something. If it’s rare or one of a kind AND there is a demand for it, expect to pay a premium price. Then if things are reversed expect the opposite. Fortunately for us fake rock contractors what we do is somewhat rare. Not a lot of people do what we do. Thus we benefit from the rarity of skilled tradesmen in our “industry” when it comes to pricing our work. At least for now.
EXPERIENCE
How you price your work is also generally impacted by your level of experience. More experience then more potential for better profit margins for you. I use the words “generally” and “potential” because we can always be undercut by other contractors who bid less than us, experienced or not.
COST OF GOODS
In this category you have your hard costs. Supplies, materials, labor, sub-contractors, rentals, engineering, permitting, and all that goes into building your project. What you charge must cover all these expenses.
OFFICE, LICENSING, MARKETING, EQUIPMENT PURCHASING & MAINTENANCE, EMPLOYEE, AND INSURANCE COSTS
What you charge must include a percentage for all the your additional costs to own and run your business.
MARGIN/MARK-UP
After all of the factors above this is what YOU get to keep……hopefully.
FEEDBACK FROM THE EXPERTS
A bit ago I put up a picture on a Facebook faux rock contractors forum site. It was a computer rendering of a project that I had been asked to provide a bid on for a pool builder.. I mentioned in my comments the fact that I had provided a bid after which I was told that the pool company had someone who could build it for less than a third of what I had bid. The picture is at left. This was a new build fake rock project consisting of a number of boulders.
Most of the comments agreed that the lower quote must have indicated that the person or people who bid it were either un-documented workers, (who would have almost none of the cost of doing business expenses a legitimate California business has), were just building very very sub-par work, and/or were just bidding based on an hourly wage. One faux rock contractor even said his bid would have been 5 times the low bid…more than mine. And many thought my bid was “about right”. Point is in the real world you often find circumstances and factors that are challenge to overcome.
GETTING YOUR FOOT IN THE DOOR
There’s also the issue of what to do when you’re starting out. You’ve gotten a handle on how to make a good product by studying, taking some training’s and/or just simply practicing and now you are ready, (or you hope and think you are) to offer your services to the public. What do you charge? Well for me I began by doing some small jobs with little to no mark up. I considered it marketing. I then found a friend who said he’d pay for the materials if I built a project for him. This I considered an opportunity. The project was a larger one than any I’d done before. So I built it and got great photos, some video, and a happy client testimonial. Now I had some additional solid evidence that I could use to try and sell myself to new clients. I then negotiated a booth rental space at an upcoming garden show and the rest is history as they say, (I explain this strategy in more detail in my book “Makin’ Rocks” which you can order here).
PER JOB OR HOURLY?
Earlier in my career I tried to figure up job pricing by adding all my expenses then estimating the hours it would take to do the job then multiplying that by what I thought I was “worth” per hour. I ended up seemed to always be struggling financially. What I was not including were again all the office or business expenses as well as travel expenses, profit, marketing, a “what if” or padding portion that need to be included for a business. I was NOT just working for wages.
This notion of billing hourly became very interesting when it came to repairs or remodels, (a generally smaller size product you might say). In an effort to be “fair” I would put together a proposal based on my estimated work time then add supplies, materials and any other costs like equipment rentals etc. and provide the bid. Example: 24 hours or (3) 8hr days at $50hr for me, ($1,200) plus $540 materials and supplies for a total job bid at $1,740 or more depending on how long the job took. In my mind $1,740 was a pretty good chunk of money. So I was a little nervous asking people to pay that. I shouldn’t have been but I was. I had nothing to compare to when it came to pricing fake rock projects. Also couldn’t perfectly predict how long a job might take. But if I could get $50 an hour that was pretty amazing to me at the time I thought, (had never made anywhere near that when I was a dental technician). So how’d that work? Well as I mentioned, my cost of doing business had not been included in my pricing. So as time went on I never seemed to have enough money to cover all the bills that kept showing up. In addition, my clients perceived me through the “lens” of my hourly wage. They were paying me $50 dollars an hour! So if I wasn’t moving fast enough or they thought I was taking too long they weren’t happy.
LESSONS LEARNED
Over time I added all the categories I’ve mentioned above to arrive at my job estimates. My hourly, employee costs, a percentage for my office expenses, cost of doing business, travel, licensing, insurance, a profit and marketing, and some padding to cover surprises. This worked better. But still things were a struggle. So now I have shifted my strategy.
HOW IT’S NOW DONE
No More Hourly Jobs: I no longer consider a project based ONLY on my time & materials costs to do the work.
Project Minimums: Having built hundreds of projects over the years I have a sense of what I’ve been paid before and thus can start with some basic estimates for any given job. Examples: Small grotto say $10.8K to $12.6K. Medium one, $20K to $35K Big: $50K+ Pool Slides are bid based on a liner foot amount plus other factors like the challenge of the engineering and layout plus site access etc., (of course the terms “Small”, “Medium” and “Large” are totally arbitrary. There aren’t universally accept standards that fake rock builders use at this point). I also try and anticipate any possibly factors that could drive up my job costs and thereby lower my margins...profit margins that is. If I detect that a certain potential job might have “issues”, (expenses) that need inclusion in my bidding calculation I add them in. Addition engineering, permitting, inspections, site access problems etc. for example.
Am I Busy? If I’m slow I may lower my bids to try and make sure I’m not pricing myself out of my market. However, I do know that I have established a pretty good reputation in my industry and area for quality and thus feel fairly safe asking for better budgets than at the beginning of my career.
BUT WHAT’S A FAIR PRICE AFTER ALL’S SAID AND DONE?
That IS the question. I’ve seen fake rock jobs that clients have spent thousands on that I wouldn’t have payed a penny for. They were a disaster. Ugly, fake looking, rusting, cracking, collapsing, a mess. I am constantly fixing and repair them… And I’ve seen these kinds of projects in very expensive neighborhoods. Did they pay a fair price for what they got. No way. The question is to what standard are we seeking to measure up too as faux rock designers and builders?
Are we looking to throw something into a clients yard or property that KINDA looks like a rock and MIGHT last for a while? Then CHARGE AS MUCH AS WE CAN for that? And even add new up-charges/expenses IN THE MIDDLE OF THE JOB that your client didn’t request to kick up our profits? Sadly this has been all to common which is why “contractors” generally don’t have the best reputations and why governments have had to create permitting and policing agencies to try and protect the public.
For me if you can design and build an authentic looking, long lasting, faux or artificial rock project you deserve as much as the market will bare and/or you are able to get. If your work doesn’t measure up you should’t be charging the same as those who’s work does. Or maybe you should not be building fake rock projects for the public quite yet. My first jobs were for myself. I learned what worked and what didn’t doing those projects. Mistakes were made on jobs in my own yard. Really we should have a minimum standard that people need to meet. Unfortunately, there isn’t one. But as a start does our work match nature should be what we ask ourselves. If yes, then you are ready to offer your skills to the market. These issues are true of every product or service out there to one degree or another. So back to how much to charge?
THE BEST AND THE WORST
In terms of how much people are able to command all businesses and fields of human endeavor have those who get paid the most and those who get paid the least. Sometimes it makes sense. The person’s work, (or company) is amazing, they have a long track record, (or are believed to be especially gifted), are considered “experts” in their’ field with most people in agreement that they deserve the money they get doing what they do. On the other side of the spectrum a person’s work, (or a company) doesn’t measure up. Is poorly done, weak in design, sloppy in execution or in some other way obviously is not worthy of a high economic reward or compensation.
This truth however doesn’t preclude people from trying to get as much as they can from people for their work even if they really aren’t worthy of it. Thus the famous term “buyer beware”...
But we’re talking about how to charge for our work. Well here’s the basics.
Add up all your expenses, add a percentage for you business, for you, a pad percentage for the “what if fund” and see if you can get someone to pay you that amount. Example: EXPENSES + 15% FOR MY BUSINESS, 25% FOR ME, AND 15% FOR “What If” INSURANCE, (to cover unforeseen costs/expenses). This means that after all your expenses you should be keeping 55% as profit before taxes. A 55% margin. $10K job, $5,500 margin.
TOP MONEY PEOPLE
But then what about the folks making the top money in the industry? They may have margins in the 65% or 85% margin range. Well if they are doing good quality work I say good for them. The more they can make the more all the rest of us can make. “A rising tide lifts all boats” it’s been said. The obvious question is then: how can you get paid more for what you do? How can you become the top paid guy or gal in my field? Or at least in a similar price range as the top people? There are multiple answers to this question most around the way you run your business.
BUSINESS STRATEGIES
Some rock guys just do insanely cool awesome projects for the elite customers of the world. They command top dollars for their work. Some work as hired artists on the theme parks, zoos, aquariums, and other public areas of the world. Others, have built businesses that can provide good projects for a large volume of customer each year. Still others have businesses that have mastered the training category of fake rock construction charging thousands for workshops on the trade. While still others have invented or put together new products that they sell to the industry. With most individuals covering multiples categories I noted above.
WHERE TO START
If you don’t mind traveling see if you can get a job working on one of the many rock jobs around the globe. If you want to start your own business then a good starting point should be how well do you practice your craft? How well do you design and build authentic and real looking faux rock projects? Once you start getting this right all that’s left is finding clients who will hire you. We should always be seeking to create and design the best quality rock work there is. So learning and growing in your skill sets is is critical. You can price your work to “get in the door” as I mentioned above to start things off then increase your pricing as you gain experience.
THE REAL WORLD
You will be competing with others IF you have other contractors in your area and you have a client who wants to shop the job. I have lost jobs to other contractors, (I assume based on pricing) and I’ve had clients tell me I was the only one they could find who could do the work.
You may also be able to find people who don’t really care about the pricing as much if you are able to sell yourself and your abilities to them personally and effectively. The keys to this are developing rapport and trust with people. Showing examples of your work and how it compares to less quality work can also help Getting referrals from you past client’s on video or a note, email, message or written letter is also important. But you may also need to be whiling to ASK for more money. Do this and you can begin to find out what you are able to get for your work based on your competitions pricing and the power of your reputation, and sales skills, (Yes, take a class, read a book and study sales if you’re not very comfortable with it).
SUMMARY
How you price your work depends on 2 primary categories.
1) - YOUR PERSONAL QUALITIES OR ASSETS: Your SKILLS & TALENT, ABILITIES, EXPERIENCE, REPUTATION, BUSINESS ACUMEN, and SALES SKILLS.
2) - OUTSIDE FORCES: THE ECONOMY, GEOGRAPHY, (where you live and do business) NUMBER OF COMPETITORS, PERSONAL HEALTH, OUTSIDE SUPPORT, (friends and family)
You can control the first category. Get as good as you can in the craft. Live, work and build with integrity and honesty. Do your job with a servants heart. People can feel it. And they REALLY appreciate it. Build awesome projects that exceed your clients expectations. With the second category just be adaptable and aware of what’s going on. Things can change so change when they do. And always keep a positive optimistic attitude.
I’ve made over $1,200 a day and I’ve made $0 a day. Billed out similar jobs for $2,500 and $6,500+. $12,500 and $23,000. What I can tell you is the higher priced jobs were more fun but sometimes the lower priced jobs were the best I could get at the time, (2008 - 2009 season).
Those who make the most money believe that they are worth it and have customers who believe it too. They are also good at business and at the business of doing “good”. Now your job is to be the best you can be. So you can charge the most you can charge. For clients who are eager to hire you because…..they believe and they know your WORTH IT!
- Dave