If there’s something we can guarantee you is that we won’t be the cheapest quote for your project. The reasoning behind is not as straightforward, it took us a lot of trial and error until we could find the optimal price for our projects. Since there was a short period where we were aiming to be the cheapest quote, we have to explain why this is no longer the case.
Before starting this business, our experience was mostly commercial. Commercial projects are huge, some of them over £100 million and virtually everyone is some sort of subcontractor of a subcontractor… of a subcontractor of one of the the large contractors. Subcontractors tend to be paid based on the number of hours they work, so the pricing was not a concern.
For residential or small commercial projects, the approach is very different. While there are many companies that still give an hourly rate + materials, this is not something we pursued. This creates a lot of uncertainty for the customer, not knowing the final price of the project, so we decided to offer fixed prices. The uncertainty is still there, but this time it’s on us.
The idea behind our initial prices was that lower prices would cause a higher demand and overall our profits would be better. We were wrong. Lower prices meant that we had to rush the job, use the cheapest materials, cut corners and have no profit from the projects; not having a profit meant that we weren’t even able to invest or innovate our business.
Higher prices changed the game for us. This allowed us to hire better skilled tradesmen in our team, spend more time on the projects, use good quality materials and have a good profit from the projects. This profit was mostly reinvested which in turn allowed us to use the latest technology for our projects, which improved the quality and efficiency of our business.
Most people prefer a mid-range/high end project, despite the higher costs. Although we had a strong backlash when we stopped offering the old prices, this strategy works much better for us.