Mark-up (was Steinway parts)

[David Ilvedson]

can't figure out your example about the agraffes,  



"For example, we began to work with agraffes differently many years ago which added about 60 hours into our jobs but which did not get costed into the then current contracts. We wanted to do it, we couldn't in conscience not do it knowing the good results we were getting, so we took the hit for a while. "  

if you mean you were experimenting with an agraffe procedure, I can understand not adding it to the bill...sort of/not really...but eating an extra 60 hours?   what the heck were you doing to the agraffes?   making them?...;-]   



David Ilvedson, RPT

Pacifica, CA 94044









Original message

From: paulrevenkojones at aol.com

To: pianotech at ptg.org

Received: 2/19/2008 10:37:41 PM

Subject: Re: Mark-up (was Steinway parts)





David:



You, and some others, continue to overblow the loss/gain aspect of this way of doing business. My "estimates" (simply another word for a proposal) are as close to the real cost we see involved, parts and labor. Any under- or overages are miniscule in the grand scheme of things--the cost of a total restoration. If we discover a way to do something differently at the time we're doing the work, it can cut both ways for us. For example, we began to work with agraffes differently many years ago which added about 60 hours into our jobs but which did not get costed into the then current contracts. We wanted to do it, we couldn't in conscience not do it knowing the good results we were getting, so we took the hit for a while. On the other hand, we discover some "efficiencies" or "better" (faster) way to do something, and we are able to increase the profitability of the work.  But don't inflate the differences, David; we're really talking figurative nickels and dimes. But it too! k a long time to get to this balance point, and we have been steadfast in trying not to learn (the skill of estimates, or the skills of restoration) on the backs of our clients. 



You make it sound devious and a bit mean-spirited. It's neither. It is calculated! We know to a dime what our time is worth and how much time it takes today to do something; we constantly recalculate it. Since we do not buy or sell pianos, we do not have the economic impulse to speed or corner-cutting. The best among us who do buy and sell don't either--they insist on quality and the proper attention to detail.  More comments below.







-----Original Message-----

From: David Love <davidlovepianos at comcast.net>

To: 'Pianotech List' <pianotech at ptg.org>

Sent: Tue, 19 Feb 2008 10:22 pm

Subject: RE: Mark-up (was Steinway parts)





A set contract with a stipulated fixed price (a bid) is not, by definition,

an estimate.



A contract is by definition a contract. A stipulated fixed price is not a bid. A stipulated fixed

price is the firm result of an estimate/assessment/proposal/bid.  A bid is an offer to 

work at a certain price. An estimate may be a bid or a stipulated fixed price. A stipulated fixed price

included (by law)in a contract may have a foundation in estimating, proposing, assessing, however

you want to parse the language. The reality is that the "Estimate of Costs" form we use and call so, is 

referenced in the Contract under the cost and terms of payment as a binding attachment and will not (and cannot)

be deviated from, contractually. 



 Paul states that the losses and gains balance out.  So that

suggests that when he ends up ahead he keeps it and when he ends up behind

he eats it. 



Do you discount your tunings when you're done in an hour and a half instead of 

an hour and three quarters? Yeah, we all find something else to do if we're charging 

a price based on a per hour analysis. And again, I talking about chump change against a 

multi-tens of thousands of dollars contract. 



 That's good for the person for whom he eats it, not so good for

the person from whom he keeps it.  What you're doing then is simply

overestimating the job and returning it under the estimate for things you

don't end up having to do. 



Hmmm, never done that. Maybe I should....no. I don't think so. That's pretty base behavior 

in my book. 



That's something different.  That's ok if you

want to do it that way and I can see the benefit of simply saying we

approach the job assuming we will do everything and it costs $X.  On many

jobs, I now do it that way and I do everything, meaning, I don't try and get

by with not doing some procedure just because I can get away with not doing

it.  Do the job right and be thorough.  However, there are often times when

someone is trying to hit a budget on a project.  You end up trying to do

what's necessary for their benefit but you discover in the process that you

can't really get away with skipping some procedure you thought you might

have a chance to. 



We constantly lose work to those who are willing to do what the client wants based

solely on budget. We set a price, don't deviate, don't negotiate, and if the client (with 

whom we spend a lot of time explaining procedures--even to the point of making a 

"rebuiling your piano"video many years ago at our cost and never selling it for any profit) if

the client can't afford it, then we don't do it. 



 Do you eat it?  Or do you go back and say, hey we did the

best we could to come in on your budget but we think this procedure really

needs to be done and here's why...  And, btw, that possible contingency

should, ideally, be outlined in the "Estimate/Proposal".  



Those "contingencies" are dealt with in discussion with the client, and again, we either reach

agreement or not. If not, we move on. There's plenty of work. :-)



Paul







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