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Have a question and looking for feedback from industry peers? This month KBDN listens in on dialogue between industry professionals as excerpted from the KitchenBathPros.com online Designer Discussion Forum.
BILLING FOR BATHS
I’m curious. How do others charge for bathroom renovations? Kitchens are pretty straightforward, but there is much more work involved in bathrooms - many more selections, more detailed drawings, seemingly more material changes and more detailed plumbing.
Right now I’m billing by the hour and putting a mark-up on materials, however, I’m putting in so many hours, I’m afraid to bill my client for the work. Next time I’d like to do it differently, but I’m not sure how. Has anyone worked out a successful plan for bathrooms?
Thanks for asking this. I really dislike doing bathrooms for all the reasons you mentioned. It just seems that I can’t charge enough to justify the amount of time involved, especially the hand drawings for tile designs.
One thing I have done, that none of my clients object to, is to charge separately for measurement fees, both on kitchens and baths. When clients see the level of detail that goes into the construction drawings, they understand this is separate but necessary work that is required for the ultimate design.
I do a lot of bathrooms and make very good mark-up. The key is not to break down everything to the customer in writing. Instead, you need to write up the proposal with all the work, but only have one bottom line number for the total job.
We’ve struggled in bathrooms, and do the lump-sum type of proposal, but we never seem to actually make any money on them (after the whole thing is over and we calculate time, labor and products).
Our thought process is that if they have a kitchen that will be remodeled in the next five years, we’ll do the bathroom.
Otherwise we aren’t excited about the job.
Our average bath comes to 15-22k, while our average master bath comes to 28-60k. And we still don’t see much actual profit for the amount of work.
I’ve priced a lot of bathrooms over the years – the operative word being “priced.” The rate of converting pricing to sales is very low. We have even lost kitchen jobs when we were asked to price a kitchen and bath at the same time. Even though we separate the cost of each, the customers will think the kitchen price is fine but will pass out at the price of the bathroom. They will then assume, since the bath price seems so high, we must, therefore, be too high on the kitchen price.
I have reached a point that, when I talk to a customer initially, I will press them for what their budget is, and if they don’t want to tell me, I will tell them what an average bathroom costs to remodel. If they are still standing, then we will proceed.
I think it is hard for people to imagine that if a 200-sq.-ft. kitchen costs $25K-$35K, that a less than 100-sq.-ft. bathroom could possibly cost $15K-$25K.
You make a good point about the bathrooms winning bids. Our percentage is way down from bathroom bids to actual sales.
We win maybe one in 10 bathrooms, but with kitchens, it’s more like seven out of 10.
When our clients ask for a breakdown, I don’t provide one, as we only sell our bathrooms as a package deal.
I do tell them they have the option of acting as their own general contractor and getting individual quotes from a demolition guy, the plumber, the electrician, the drywall guy, the hot mop guy, the tile guy, the cabinet installer and the painter.
This is a great topic. Many of my clients get more sticker-shocked with the bathrooms. It’s such a small room, so they think, how could it be that expensive?
A few years ago, I teamed up with a bathroom remodeler. I help the client with the materials (cabinets, countertops, fixtures, etc.). It’s worked well for me. It takes a lot less time and I can concentrate more on my kitchen jobs.
We’ve thought about teaming up with someone on bathrooms, but if you give up the mark-up on plumbing fixtures, there isn’t much left to cover all the little extras you get into. Since we are in an area where no one charges for design time, that rules that part out.
It seems like people would rather hire a plumber to change out fixtures and hire a carpenter to do the tear out and rebuilding and a floor covering person to install the floor, and buy cabinets and countertops someplace rather than go for the one price to do it all. It must be some kind of coping mechanism to break the prices down in smaller quantities, making it easier to swallow.
We did have a guy a few years ago, who, after getting a price from us, shopped everything individually and came back to us to do the job because it was cheaper. But that is the exception and not the rule. I don’t think most people would do that because they don’t want to admit that we were right.
I’ve decided that unless you are a design/build type of operation, doing bathrooms really does not make much sense.
I supply cabinetry, countertops, bath fans, faucets and occasionally, the toilet, tub/shower surrounds, shower doors, etc.
The remodeling specialist I work with does all the installation and project management. He also does the tear out, trim work, flooring and drywall.
I don’t charge for design time, since usually the design is done, or it’s a basic replacement bath where there aren’t many changes possible. I had one that was complicated, but her materials were over $10K and she was a repeat customer, so I didn’t charge the fee.
If you want to do full-service bath remodels, it’s best to be a general contractor or design/build company.
This thread caught my interest because over the last three years, I’ve probably done maybe one to two baths a year. Strangely enough, though, this year since January it’s been “Bath City.”
I just looked through our jobs and we’ve sold over $110,000 in bath products (for five projects) since January. Now we’ve got retainers on two more. It’s kind of weird why all of these bath jobs come at the same time.
We are a pair of independent designers with no showroom. We sell cabinets, countertops, plumbing fixtures and tile. We refer our clients to a general contractor who does the labor.
I agree that the specifying, ordering and running around is much more than we do for kitchens.
We do make a decent profit on this stuff but probably less than on just a cabinet order if it is based on hours invested. You have to be accurate because errors and/or omissions can eat up every ounce of profit as there is no place to really build in much extra margin to cover mistakes.
We tend to group items together and write our contract using descriptions rather than item numbers so clients can’t go online to price shop.
I started in this business 25 years ago before the big boxes and the Internet. It was much easier for a showroom to make money on bathrooms then.
But, of course, that’s old news. Nowadays, you have to go with the flow.
We’ve had a big influx of bathroom remodels since the first of the year, too. I think part of that is the fact that it’s so slow, I’m jumping on anything I can to keep myself busy.
And you all are right – the total profits just aren’t what they are in a kitchen, plus there’s more work on my end. We sell the cabinets and countertops, then coordinate with the contractor, plumber, etc. These jobs eat up a lot of administrative time because we still end up assisting in selecting fixtures and messing with schedules.
I’m thinking of instituting a separate “project management fee” for the administrative runaround – around $2,000 for a $10K-$20K project. That will pay for selection assistance, several trips to the jobsite to communicate with the contractor and subs, and being the one person the homeowner can call and yell at when things aren’t done right.
How do you charge for tile installation? With more and more jobs calling out for intricate cuts and inserts, underbidding a tile job can tank profit margins. Do you charge an additional design setup fee for the elaborate patterns? How do you know how much to charge until the tile is selected?
We’re design/builders, so our case might be a bit different. Tile has to be chosen first, then we design the layout prior to sending it off to different tile setters to bid.
And, without exception, there is a wide variety in bids. We don’t rely on one tile setter since some have varying degrees of expertise that we call upon.
With uneven handmade tile, glass tile, metal tile and different tile thicknesses, I can’t see doing it any other way.
READY FOR A BOOM
Tomorrow I strongly believe that I’ll be adding two big projects to several that I have recently acquired. All of the projects are nice and big and potentially very profitable.
It’s been tough out there lately. In fact, it’s been 1-1/2 years that it has been slow for me. And, the “slow” period came suddenly after a record-breaking 2005, all of which happened in the first six months of 2005.
Then, things went south, and quickly. Of course, work came in, but not much. From what I understand, it was a region-wide thing too, not just me – which made me feel so much better!
So, bring the clients on, I’m definitely ready!
Good for you, Susan. I am also very busy in Michigan. I had more good leads in the first 15 days of January 2007 than I had in the entire last four months of 2006.
I am feeling good right now about where things are going, and I am glad you are busy, too.
I’m curious as to what you think changed to make these clients want to buy now. What is the difference between three months or six months or one year ago? I always think it’s the planets or something like that. Is it something mystical like that or some other reason you can attribute?
We were slow, too, for the last couple of months, and I was getting nervous because I read all of the posts from other parts of the country saying how slow things were. I‘ve had the same experience with tons of good leads since January. If we could find out why this kind of cycle happens, maybe we could use it to our advantage as far as scheduling the rest of our lives.
I think it’s partially the planets. Some of my new work is due to previously satisfied clients, so that’s really important, but also there is a lot of competition in my area. So, maybe that partially accounted for the slowness, the amount of competition and the whimsical attitudes of a potential client. If one little thing doesn’t seem right, they have a million more places to go.
One thing that has changed is my computer guy. The one I had for years made every change on my Website, even if it was little. After many years, I needed to make a switch. One of the very first things my new computer guy did was to say, “Do you know you can make Website changes yourself? Get yourself Dreamweaver and I’ll show you some basics.” Well, Khat, that has been the single biggest thing that I’ve done to make a difference in my business these last months.
I’ve made a lot of improvements to my Website in recent months and have some big programming/linking changes to do in the next few weeks. In fact, when I am finished, I thought I may present it to get a critique from you guys. You know, we haven’t gotten into the nitty gritty of Websites in terms of substantive discussions. I think Websites are incredibly important. So, maybe my improvements made a difference. I’ve added a number of k/b marketing innovations to the site and have a big idea for another that will happen within a week or so.
I do have a theory, and maybe it’s controversial, but whatever, others are free to disagree (and I encourage that). I believe that slow times may come, but in the end, they will go. We are a capitalist society, and money burns a hole in pockets – if people can find a way to get their kitchens done, they will. They’ll wait, but we are a consumeristic society, and they’ll get it done, whether the wealthier clients have to downgrade a bit and the middle-class has to go to lower end, but they’ll do it. So, as a business person, I do always have hope, solely because of this theory.
The problem is I just can’t predict the timing!
After all my years and knowledge of my market, I still can’t always predict the ups and downs, and this last downturn, no one I spoke with in my area knew why it came when it did. The war theory was bandied about, along with the aftermath of Hurricane Katrina (even though we’re far away from the area that was hit), but perhaps, too, it had something to do with the consciousness that these brought about, and how fast something bad can happen. I think perhaps that became very unsettling to people, the realization of vulnerability, and maybe that was part of the slowdown.
I think (and I am crossing my fingers as I type this) that I can officially say that I am busy again! Yahoo! Not even two weeks ago, my husband nervously asked me if I had a game plan for the rest of 2007, because 2006 was so bad financially, we had to wonder whether 2007 would be more of the same. I nervously said that I was pondering different options with my business.
I was even thinking about applying in the kitchen department of a big-box store so that there would be at least a meager paycheck each week!
Since then, however, people have been coming out of the woodwork. Between referrals and previous customers calling for me to design more rooms for them, things are really looking up.
I hope that this continues for all of us, so let’s all keep our fingers crossed.
Glad to hear others are so busy! That can only bode well for everyone. Since January 1, I, too, am run off my feet here in Ottawa, Canada. I can truly say I have not seen sales and traffic like these past three weeks for over a year (not to say it was never very slow our way).
My theory for the recent surge? We have now been in our showroom for 10 years and the referrals are really starting to pour in and we (we are a cabinet manufacturer as well) are now promoting a “green” kitchen line that is piquing huge interest, even from the U.S.
Here’s to a busy (and profitable) year to all of you out there!
We were pleasantly busy for the early part of 2007, with more qualified leads coming in January than the previous few months combined. Last year was our worst in six years. I’m not ready to call this pickup in leads a “trend” yet, though I remain hopeful.
I’ve noticed for years that what motivates one person often motivates a lot of them. This not only includes selling jobs, but also getting paid.
We will go for a while with very few people paying and then all of a sudden they will all pay. That’s how this week was.
We received over $70,000 yesterday. I also got down payments on two kitchen remodels yesterday, got the go-ahead on a reception counter and a large desk unit today, and sold another kitchen remodel at the end of the day.
Now, if I can just figure out what it is that really motivates people, maybe I won’t have to work for a living any more.
I guess I should count myself among the lucky ones after seeing what everyone else has been experiencing.
Here in Seattle, where I am based, everyone I know was busy last year, including our business. And it looks to be the same way this year, at least up to this point in time.
But, we were certainly behind the rest of the country coming out of the doldrums a few years back, so maybe we are just lagging again. Hopefully that is not the case here, and business will stay strong.
I really don’t know what it is that triggers our fickle economy and equally fickle buyers. It seems like it doesn’t take much, especially since the tragedy of 9/11. I think deep in the back of our minds we are all still a little skittish from the events of that day, so we tend to give up a little easier than before that happened.
We are definitely an economy of buyers, and ultimately if we can, we will purchase what we want, whether it be kitchens or whatever. It would be nice, though, if we had a crystal ball to tell us when it is going to lag and when it was busy, so at least we could plan our vacations!
I’m very glad to hear that you are all so busy.
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