what's up? Welcome back to the podcast. On this episode, we're going to be talking about the deadly duo. And that's right. We're talking about over-promising and under-bidding. Now, you probably thought I was going to say over-delivering, but we're talking about... over-promising and under-bidding, right? And we're going to dive into all this here. So buckle up because this is going to be one of those really little secret podcasts where there's a ton of gold, but it doesn't really seem like it in the beginning. So hang tight, stay with me, and we're going to get through this together as quickly as possible. I want to set some definitions though. I want to kind of define what I'm talking about when I say these things because it's going to be important later on. So first off, over-promising, that seems kind of self-explanatory, right? But over-promising is what we do when we're talking to a client and we're trying to make the sale. We sometimes will say whatever we need to say in order to try and make this sale, especially if we're a little desperate for getting a job landed, right? If I'm talking to a client and let's say I've built, maybe I've done two decks, you know, I'm in business for five years and I've built two decks in that five years and I'm talking to a lead and they want to build a deck. Now, am I the most qualified contractor? to do that project based on only having built two decks? The answer is no. If you think you are, you need to go and like check yourself, right? Because you're living in la la land. If you've only built two decks, you are not the most qualified contractor. You may be able to do it and you may be able to deliver a good product at the end, but you're certainly not the most qualified contractor. Compared to maybe someone who only builds decks and they've done a hundred decks, right? So over promising is when we're in sales mode and we're trying to close this deal and we're just selling whatever the customer wants to hear because we want that job. Now, sometimes we're not that desperate and sometimes we're not trying to deceive people. But the other side of that, the drawbacks, I'm sorry, not the drawbacks, but you know, as far as the, what we do is that we bid. or we think, or we sell with complete optimism. We're in uninformed optimism stage. And if you listen to my podcast number, what was it? 143. It's the emotional stages of change. This also applies into every single project that we do. The emotional stages of change is you start out at uninformed optimism, and then you go into informed pessimism. Then you get into the valley of despair, and then you go into informed optimism, and then eventually you go into fulfillment. But most of the times when we're talking to a client, it's a new project, we're excited, we want to make the sale, we're in uninformed optimism because we don't truly know what all we're going to come across in this project yet, right? We're optimistic that everything's going to go perfect. It's one of those weird things where no matter how many jobs you bid and you've had so much experience that you still bid with the perfect optimistic outcome, right? And so here's an example of what I mean by that. You're talking to a client and they say, hey, we need to get this project done by, you know, June 1st. Because my daughter is graduating from high school and we're having a graduation party for her and her friends at our house. It's a big event. Let's say you're a pool builder. You're going to put in a pool for them. They want to have this pool for the event. And you know that the deadline's tight, right? Like you know that it's going to be like everything has to go well in order to get the job done by that deadline. But you're optimistic and you're in your mind, you're thinking, well, if we have to work weekends, if we have to work nights, if we have to bring in extra help, you know, that's what we'll do and we'll make it happen. That's the uninformed optimism. So the client who, because you're the only one who says they can get it done by that deadline, hires you. And then in the middle of that project, something happens. You start digging and realize that like, there's a gas line right in the middle of where the pool is going or something crazy, right? Or maybe there was something buried there before, or maybe there was a sinkhole underneath there. And now you got to bring in like, you know, a hundred truckloads of dirt or whatever. Like those are things you can't predict. And then all of a sudden you're not able to finish the job on time. Right? So we say, well, Brian, that's like worst case scenario. Yes. But I can almost guarantee you that you are more likely to have a hiccup in a project than you are for it to go absolutely perfect. I've done over 2,500 jobs. And I would tell you that probably less than maybe 200 of those went perfect. So out of 2,500 jobs,2,300 of them had something go wrong. Now, they might have been minor, they might have been major, but this idea that everything's going to go perfect is just, it's hogwash. And you don't plan for that. You don't plan for the perfect execution, right? You try to go for what I call the lowest common denominator. If I do 10 jobs of the exact same thing, and eight out of 10 of them take two weeks, right? But two out of 10 only take one week. I'm not selling the job saying I can do it in one week because history says that it's going to take two weeks,80% of the time. But we get in this weird thing where we're like super optimistic and we're just going to make it happen. That's the uninformed optimism. We're just going to make it happen. We're going to jump through hoops. We're going to do all this and this and this, and we're going to make it happen. Now, sometimes you can make it happen. Sometimes you can bring in extra resources, but the second part of the equation of this is the underbidding side of it. So when you overpromise, and let's say you're doing that pool scenario, and then the worst case that happens, there's a sinkhole and you got to bring in 100 loads of dirt. It's going to take an extra two weeks and all this extra money. And then you underbid the job to begin with, you're screwed. Like you don't have extra finances available to make it happen, right? If the only company that can bring in 100 loads of dirt is like going to overcharge you or basically charge you a premium because it's short notice and they're pulling off a job, you don't have any money available to make that happen. Even if you're trying to, you're going to charge the customer extra for that. It just doesn't always work out like that, right? And so when you under... bid, you're shooting yourself in the foot to begin with. And then when you over promise, you're basically setting yourself up for failure. It's almost guaranteed to set yourself up for failure. So we've all heard the saying, you know, under promise over deliver, right? So the second definition, I actually didn't even get to the first definition. The first definition is that when I say under bid, I mean, you're not charging enough. And when I say over bid, What I'm actually saying is that you're pricing it accordingly, not that you're charging too much. I'm saying overbid to kind of tie in the words, a little play on words, but also overbid because you're charging more than what you normally would charge. So underbidding is not charging enough. Overbidding is actually charging what you should be charging, right? That's the first definition. The second one is that when I say overpromising, it's assumed, or I'm saying here as a definition or matter of fact, is that what I'm talking about is you're promising things you can't deliver on. And then we try to shoot for over delivery, right? Under promise over deliver is what the goal is. That's what we're shooting for. But in this case, we're talking about over promising, right? What we don't want to do. So we always want to try and under promise and over deliver. That's the expected part of it. So let's talk about four different scenarios here. Think of this as a quadrant. There's four quadrants and there's a grid there and you can plot this on the grid. There's four possible scenarios. The first one is that you over promise and under bid, which is what I just said. That's the worst case scenario that you can do. The second one is under promising and under bidding. So you're not promising the moon. You're just, you're promising the bare minimum, but you're still underbidding the job. That's a better scenario because you're not setting yourself up for failure with all these crazy deadlines and unrealistic expectations, right? I mean, you still need to, you still need to be overbidding, but in this scenario, if you under promise and underbid, it's kind of like you're basically going to hit the mark. Okay. The third scenario is over promising. and overbidding, which that's okay. It's one step above underbidding and underpromising because even though you're overpromising, if you have the correct margins and the correct profit, you can still deliver on some of these overpromises, right? But the best case scenario is to underpromise and overbid where you're setting the bar low. You're under promising. Remember though, the definition under promise over deliver. So I'm setting the bar really low. I'm going to price it accordingly, which is higher than what I, what I'm charging now. And that's going to allow me the finances and the profit to over deliver. I'm setting the bar low. I have the money where it should be. It's going to allow me to over deliver. What that's going to end up with is the customer is going to have a great experience. Because you may have told them it's going to be done by the end of June and you come in there and because you over bid it and you under promised the deadline, you get it done by the second week of May. And now they have an extra two weeks to use the pool and all that stuff. Right. Like that's, that's what I'm talking about here. So the best case scenario is to under promise and overbid. The worst case scenario is to over promise and underbid. And that is what most contractors do. Most contractors that I talk to who are struggling in their business, you guys are way over promising and way underbidding. I mean, like significant. Not even just a little bit, I mean significant. And I want to dive into the over-promising part because I want to kind of give examples of what, you know, what's happening beyond just like the pool scenario. So this, this kind of expands beyond just making promises, but really understanding your role as the contractor in the, in the relationship with a customer. So I almost. I almost titled this, I was going to talk about this podcast, this episode about really like the customer is not always right. It's actually the customer is usually not right. Right. That was kind of the original direction I was going to go, but I expanded on it and I'm inserting it here. When you're talking to a client, and again, I see this all the time on Facebook groups, mostly where the post is something like, I talked to the customer. And they wanted me to reuse the brick on their, you know, we tore out an old porch and they wanted us to keep the brick and then reuse it in the new section that we're doing in the new porch. And I told them that there may not be enough brick to do the whole project. And they said, well, we want to do it anyways. And I said, okay, because the customer is always right. It's their project. They're paying me. Right. And by the way, that's the employee mindset. If you're doing what the customer wants you to do, that's no different than your boss telling you what to do. You're just an employee. You're just doing what the client is telling you to do. That's an employee mindset. And so in a scenario like this, you know, then I see the post and it's like, and when we got done, we were, we were 20 brick short. And I told them we were going to have to go buy some and they didn't match and they were pissed off at us. And now they're not going to pay us. We want to put that fault on the customer because we, quote, told them that it wasn't a good idea, but then they made us do it anyways. And I read those kind of posts and I'm just like, I want to bang my head against the wall because it's like, you are the business owner. You are the expert. People are coming to you as the expert to tell them and to advise them on what to do. If I was in that scenario and I thought there was a possibility that we're going to run short, I would straight up tell them from the get-go, I'm not doing this project, right? We're going to have to have a plan of running out. Maybe if I know ahead of time that we're going to run short, maybe I can go get some brick that are close and we're going to put those on the back or on the side down low or below the grade line where you're not going to see it, right? But, you know, guys want to go out there and they go, okay, I'll do the job. It's a payday. And they go do this job and they start in the back and come around to one end and there's three feet short. And now they just want to patch in a bunch of old brick that don't match. You can't do that. It's your business, right? You say, customer, I'm not confident that we're going to have enough brick. So there's two options. I'm not doing this job using that brick. Or we can try and find some brick that's close match and try to come up with a solution that's going to hide those if we need them. Right. And I'm going to build that into my plan so that I make sure I have plenty of brick left over. Maybe I put all of the new brick on the side where you're not going to see it and all the new brick on the front are not new brick, but the old brick on the front. So it still matches. There's ways around that. But this idea that the customer said it, therefore they're correct and I have to do it. That is 100% an employee mindset. Hey, just a quick timeout from the show. In the next 30 seconds, I'm going to tell you exactly how you can transform your contracting business. Imagine being part of a community of winners where you can find out exactly what they've done to be successful. That's exactly what you get when you join the Profit Club. But it's not just a community. You get lifetime access to all of my course-related material, including all future material that I add. But wait, there's more. Each week, you'll get access to three group coaching calls to talk about sales, marketing, and business problems and answer any questions that you may have. Still not convinced? How about personalized one-on-one coaching to help you overcome your limits? And here's my promise to you. I guarantee you will double your investment within 90 days or I personally will work with you one-on-one until you do. So don't wait. Elevate your game with The Profit Club today. Now let's get back to the show. You are in the wrong mindset to own a business if that's what you do. The customer is not right. You're not hired just to do the job. You're not hired as labor. You're hired as the expert and you're trying to provide them real world experience that you have and help them. I had a client one time that was a very good client. And at the time of this incident, she was my best client, like the one that spent the most money with me. And she called me back to do some more work. We had a really great relationship. And she said, Brad, I want you to, I don't remember now what it was, but it had something to do with stairs in the basement. She's like, I want you to do this and this on the stairs. And I looked at her. Her name was Lynn. I said, Lynn, we're not doing that. And she goes, why? And I said, because of this, this, and this. And she's like, oh man, I really wanted to do it. I'm like, I know you did, but we can't do that. It's not going to work. And her friend, her neighbor was standing there and her neighbor, like it wasn't an interior designer, but had done, had, had plenty of experience working with contractors and, and doing projects and stuff. And she was kind of a, a D personality kind of a be in charge kind of person. And Lynn was telling me this later on, but she's, I left shortly after that meeting and she goes, you let your contractor talk to you like that. You let him tell you what you want to do. It's your project. It's your house. And she said, I trust him. He's never led me astray to this point. He's done lots of work for me. He's always on point. He's always, you know, delivered what I ask and I trust him. And that's what you're supposed to do as a contractor. You're not supposed to just go, okay, okay, I'll do whatever you want. Another incident I've talked about before, I did a stair conversion where they had carpeted stairs. They wanted to open them up, remove the carpets, have solid wood steps. And they were an elderly couple. They were like in their seventies. And I advised her. I said, I don't remember what her name was. Let's say it was. say Stacy I said Stacy this is not a good idea to have hardwood steps like it's you know they call them the widow maker because she didn't want to run her or anything she just wanted a hardwood steps inside the house and I was like it's just not a good idea and she's like I know I understand the risk I did all that you know I've done the research blah blah blah and I said okay so we did the steps but where I wouldn't budge is that she only wanted the handrail, it was open on one side down below, and then there was a wall going up the rest of the way. She only wanted the handrail on the open end, and then, you know, tied around the wall and going on up. And this was a staircase that was over 48 inches, or it was right at 48 inches. By code, you got to have handrails on both sides. And I said, no, for one, by code, we have to have a handrail on the other side. And two, it's going to be much better because it's going to be one solid continuous handrail from top to bottom. She didn't want to do it. I was like, Stacy, we have to. Like, it's not safe. You really, really, really, really, really need a handrail over here. And she's like, okay, fine. And then like two weeks after I was done, she messaged me and said, I'm so thankful that you made me put a handrail on because like the three days after you were done, I was walking down in my socks and I slipped. And if I hadn't had that handrail. On the other side, I would have fell down the steps and she could have been seriously hurt or killed. Like I said, she was an elderly lady. Those are instances where you have to put your foot down and say, like, you know, I strongly advise you against this or I'm not going to do it. That was the compromise with her. I'll do the steps, but we have to do the handrail on this side. You know, one for its code, like you have to pass code. But even if it wasn't code, we're still doing it for safety. That was the compromise there that we came up with. You're the expert, not your customers. It's not what the customer wants they get. That's bull crap. Remove that. Because here's the other thing. I have to laugh because some of the stuff is so blatantly obvious, but yet people still do it every day. The customer is not right. It doesn't matter because they're paying the bill. that you have to do what they say. It just doesn't work like that. If you go in and they say, Brad, I want to do this, right? This is what I want to do. And you're like, well, I don't really want to do it because I know that it's going to cause a problem later on, but yet you still do it later. And then when the job's all done, the customer complains to you because they said, why didn't you tell us that this was going to happen? Right? Why didn't you tell us that this was going to be an issue? I was trying to think of a scenario, but I couldn't. But there's times where it's like, you know better as the contractor, you know the outcome, but you don't say anything. And you're just like, hey, you're the boss. I'll do whatever you want. And then at the end, you get blamed because you didn't stand up for yourself, because you didn't tell them that this was going to be a problem, right? That's the other scenario where they, you know, it's not a scenario where it's like a safety risk and you're like, oh, I can't do this. It's you're adopting. all of the bad mistakes that they made. You're inheriting all that. You own all that. If I'm doing a project and the customer's like, hey, I don't want to put a front door on the house. I just don't want a front door because I want to live in nature. And you're like, well, that's kind of a bad idea. You need a front door. I don't care. I don't want a front door. Okay. And then at night, a bear comes in and eats them, right? You're going to say, well, I told them. I told them they needed to put a front door on there, but you still did the job anyways. Like you're, I know it's a stupid example, but that's some of the stupid stuff I hear. It's like, you're liable for that. If you know better, you're liable. You can even be sued for that. Where does people think that you just, whatever the customer wants, you do that? No, no, you're the expert. The last thing I want to talk about here with over-promising is a lot of times people hide behind contracts. And so you'll over promise verbally, but then in the contract, you'll have a contradiction to that over promise, right? You'll tell them we'll get it done by June. But then in the contract you put on here, guaranteed finish date is July 1st, even though you told them June 1st, right? Because you're like, oh, I'll just put a little buffer in here. So legally, I'm not, you know, I'm not obliged. And then they sign the paperwork and they don't see. where it says that you guarantee a delivery date of July 1st, and then the whole hell breaks loose, you don't finish, and then they want to sue you, and you go, well, didn't you read the contract? Didn't you read the contract? It says in there July 1st. Like, that's the stupid stuff that I hear and see on a daily basis. It's their fault because they didn't read the contract. No, it's your fault because you overpromised, and then you try to backdoor them with a legal contract. Bullcrap. Quit doing that. What's the drawbacks of underbidding? Now, I've talked about this until I'm blue in the face, but I want to touch on this real quick. If you're short, if you underbid a job, and especially if you overpromise, and now you have to jump through hoops to meet that promise because you go to the customer and say, hey, John, there's no way we're going to get this project done by June 1st like we promised because of the Cinco. And they lose their mind and say, you promised. I looked you in the face. And I said, do you promise to have it done by June 1st? And you said yes. So you make it happen. If you underbid that job, you're going to lose so much money. You might as well go out of business because you can't fix the overpromise that you did. You can't match it with the profits that you have because you underbid it. Right? You understand what I'm saying here? So a lot of times what happens. A lot of us turn into frantic finishers. If you've never heard of this before, frantic finishers, when you do the whole project towards the end of the project. And by the way, you never run out of time until the end of the project. I don't know if you've ever noticed that. You never run out of time on day one of the project. You always run out of time at the end of the project. And so on the last day or two days or last week of the project. everyone's running around like a chicken with their head cut off, trying to finish punch list, trying to get this job wrapped up because every day on the job, you're losing money. And that's when you turn into a frantic finisher and you can literally ruin the entire experience and ruin the whole job for the client on the last day of a four week job on the last week of a six month job. You can ruin the entire experience, your reputation, the quality, everything. You can ruin it on the very end of the job. And that's what a frantic finisher is. And so when you underbid jobs, that's what always happens. If you're listening to this right now and you're like, yep, that happens to me. You're not charging enough, period. If you're frantic finishing all your jobs, you're not charging enough. That should be all that you need is evidence that you're not charging enough. So with frantic finishing also can lead to shortcuts. If you're a week over on the project, you start shortcutting stuff. And so now not only did you overpromise, now you just extended the gap between overpromising and the actual delivery. When you start cutting corners, you actually extend that gap and it makes it an even worse experience. for the client at the end. This is why you need to make sure that you under promise and that you overbid, right? That's the scenario that you need to be in. But even if you're not going to, again, going back to my beginning, if you're not going to overbid, if you're too chicken to raise your prices so you can have a healthy business, if you're not going to do that, I don't even know why you're in business. I don't even know why you're listening to this podcast if you're too chicken to raise your prices. But if you're not going to raise your prices at the very minimum, under promise. If you're going to underbid, make sure you're under promising too. It's far better to say, you know, client, I don't know that I can do this. If it's a deadline thing, I'm not, I can't promise you I'll get it done by June 1st. I can't make that promise. Like there's just, I don't see how that's possible. I will do everything in my power to try and get that done. But, you know, I don't, I don't want to, I'm not going to make my guys work on the nights. I'm not going to make my guys work weekends. They already work hard. And I just don't want to, I'm not going to put that on them. So I can't promise you a June 1st completion date. I can promise you a July 1st and we can hope to get it done before June 1st, but I just can't make that promise. And now the customer can say, okay, it's a risk. Maybe we hold off. on doing the pool party until July. It's not ideal, but maybe we hold off until July or maybe we, you know, plan it somewhere else. Yes, I would like to have the pool done by June 1st, but if it's not realistic, then we just won't have it there, right? And then if you're able to actually get it done by June 1st because you under-promise and things did work out okay, now they may be, now they're going to be excited. Because maybe you told them a week later or a week before it's done, hey, Tom, great news. We're actually on schedule to finish this by May 25th. So if you did want to have that party at your place, you could still do that. That's just an example. It may not be the best example. But you can insert whatever promise there is here. Same with pricing. I tell my guys in the Profit Club, when you're pricing, we were talking about this very thing last night on our sales training. I said, when you're giving someone a ballpark, if you know, if you know, like 90% sure you can do a job for say $8,000, I don't tell them I can do it for $8,000. I say, you know, probably on the low end, or you shouldn't say probably, I say on the low end, you're looking at about 10,000. I give myself a buffer in there, right? I'm under promising. I'm under promising in the opposite way by giving myself a buffer. by saying it's more expensive. If I say it's $10,000 on the low end, I know I can do it for eight. And then I go out there and look at the house and there was something that we didn't talk about. There was an issue we didn't know about. And all of a sudden it's realistically going to cost $9,000, right? Not eight, but it's going to cost $9,000. I can go to the client and I could say, hey, great news. I know I told you 10. but we're actually going to be able to do it for nine. Now they're ecstatic because they were expecting 10, but I was really at eight. You see what I'm talking about here? That's like the under promising on the pricing side. You don't say, oh, I think I can do it for eight. And then you get out there and it actually ends up being nine because now you have to tell them it's going to cost more. Maybe they were like 8,000 was the top of where they wanted to spend. And now you just dropped on another thousand and now it's 9,000. And now they're pissed because they feel like you did a bait and switch. Like even in simple as how you deliver information, always under promise, always under promise over deliver and then over bid. If you do that, a lot of your problems in your business will go away. A lot of your, your customer service problems. A lot of your problems with clients will go away when you stop over promising. That's all I got for this episode, guys. I hope it was helpful. Do me a favor, leave a review, go to your favorite platform, podcast, Google podcast, Spotify, iTunes. I don't care if you've received any value whatsoever from any of my podcasts and you haven't left a review yet. How much do you hate me? I mean. How much do you have to hate someone not to go and spend 30 seconds and leave a review after you've done 146 episodes? Right? So do me this one favor and go review. And I don't care if you give me a one-star review, give me an honest review. I'm just asking for you to actually go leave a review for me. I would really appreciate it. And that's a, that's a very simple way of saying thank you for doing all these podcasts. I'd appreciate it so much. Guys, you know where to find me on the social medias, TikTok, Instagram, Facebook, YouTube. All you got to do is search for the Hammer and Grind podcast or just go to the show notes and you can go in there. You can schedule a call with me to talk about your business. We can do a profit audit and see why you're not making any money. We can do a strategy call and put together a plan for you. I'm here to help you. Stop playing small. Start investing in yourself and your business. to get to where you want to go. And remember, until next time, profit is not a dirty word.
