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Sound Reinforcement - Forums for Live Sound Professionals - Your Displayed Name Must Be Your Real Full Name To Post In The Live Sound Forums => LAB Lounge => Topic started by: Dave Rickard on March 26, 2011, 08:20:34 PM
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I don't want to go into details on the open forum, but--
Does anyone see any issues with bidding a small show as "50% of the lowest bid"?
I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
Thanks in advance.
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I don't want to go into details on the open forum, but--
Does anyone see any issues with bidding a small show as "50% of the lowest bid"?
I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
Thanks in advance.
I'm speechless.........
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I'm speechless.........
Don't be. Pretend, for the moment, that I'm still sane. ;)
If I shared the details I think you'd understand.
Conventional wisdom aside, any protocol/legal issues to worry about?
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Don't be. Pretend, for the moment, that I'm still sane. ;)
If I shared the details I think you'd understand.
Conventional wisdom aside, any protocol/legal issues to worry about?
It seems to me that it makes the whole bid process a sham. If I were to experience this after putting in a bid in good faith I'd be very unhappy with the outfit conducting the thing as well as anyone who went into it knowing that they were subverting the process......regardless of the (undisclosed) details.
I believe this may well be what is called "collusion".
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[Does anyone see any issues with bidding a small show as "50% of the lowest bid"?]
I am sure Lots of folks write checks everyday to be part of "The Show"
Loan them your credit card, Pay the hotel bill, Rent them a limo, pick up the Bar tab.....
Post your photo on you tube. You are Famous.
[Conventional wisdom aside, any protocol/legal issues to worry about?]
I was going to suggest your reputation as a Sound Professional (You seem to have already left no doubt about that with your Post)
Regards, John
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It seems to me that it makes the whole bid process a sham. If I were to experience this after putting in a bid in good faith I'd be very unhappy with the outfit conducting the thing as well as anyone who went into it knowing that they were subverting the process......regardless of the (undisclosed) details.
I believe this may well be what is called "collusion".
Yikes!!!
Thanks Dick. That was the info I was looking for. End of story.
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Whoa there John!
If you knew me, you wouldn't make that assumption about my ethics.
I didn't know the answer, so I asked. Simple as that.
Thanks to Dick for his excellent answer.
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I don't want to go into details on the open forum, but--
Does anyone see any issues with bidding a small show as "50% of the lowest bid"?
I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
Thanks in advance.
And you think you can do the job? Do you have all the required gear and knowledge and experience needed?
What is in it for you? Remember that some bids are placed by people who have no idea what they are doing and do not the tools or skills to do the job-and you want to do it FOR HALF?
Maybe there is something we are missing here.
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I don't want to go into details on the open forum, but--
Does anyone see any issues with bidding a small show as "50% of the lowest bid"?
I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
Thanks in advance.
The first large job I ever did (large it terms of length of the gig, not so much the equipment I used -- it was actually little better than a speakers on sticks job, but it lasted a month). I cranked the numbers out and figured, "gee, if I work for a stage I'll have to buy to do this job, I can turn a positive cash flow at about $11,000." The next lowest bid was $75,000. I almost lost the gig because they couldn't believe I could do it for $11,000 versus the $75,000 of the next highest bid. They made the guy come back with a revised bid. He came down to $45,000 and stopped there. I got the gig, despite the reservations of the people hiring me.
Long story short, I've been doing the job ever since. I'm charging a lot more money now, but I proved I could do the job by grossly underbidding everyone else. Each year the job goes out to bid, each year I'm about 33-50% less than the *next lowest bid*.
Gee, I'm paying *real* employees (workman's comp, taxes, insurance, etc.), buying lots of gear each year to do the show (an average of about $5,000 per year for this particular gig), and I still come out having cash left over in the cigar box at the end of the month.
The main thing is that I *own* everything I use. I don't rent. The only "non-business" thing I'm still doing is that I run my business out of my garage (so I don't have the overhead of office/warehouse space).
If you're pretty sure you'll get repeat business, don't be afraid to put in a low-ball bid. In time, you'll get the price up and things will be cool. However, it's a lot harder to displace an existing company that the client is satisfied with, even if you do come in with a much lower bid. So if you have an open bid and you have the opportunity to get a long-term contract (or get to be the sound company that they're happy with), by all means do what it takes.
That being said, be prepared to do whatever it takes to make the client happy and keep them happy. That has worked *real* well for me. I can't you how many clients I've gotten because the clients were tired of working with "grumpy sound men" or were tired of being told "well, you didn't pay for this, so I'm not going to bring it as part of my kit" (such as a few extra microphones). You're hired to solve problems, not be the source of problems.
As for stating in your bid "50% of the lowest bid." Well, there are two scenarios I see happening here:
1) the client doesn't take you seriously.
2) the client figures they can hire you for whatever they feel like paying you (making up a low-ball bid).
I have often told some perspective clients "I can beat whatever price you're getting right now." Some of those clients told me they were getting the sound donated. No, I can't beat that price. :-)
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If you're pretty sure you'll get repeat business, don't be afraid to put in a low-ball bid. In time, you'll get the price up and things will be cool. However, it's a lot harder to displace an existing company that the client is satisfied with, even if you do come in with a much lower bid. So if you have an open bid and you have the opportunity to get a long-term contract (or get to be the sound company that they're happy with), by all means do what it takes.
And there you go.
It's a dormant venue brought back to life by people I have no relationship with yet (they just moved here to reopen this).
I enjoy an excellent reputation, but I got seriously low-balled on the first show, and I'd like the opportunity to demonstrate why we are the *best* choice for an ongoing relationship, even though we're not the cheapest.
Nothing improper going on, I just want to show our capabilities before long-term decisions are made.
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And you think you can do the job? Do you have all the required gear and knowledge and experience needed?
We've got the gear and the experience. No worries there.
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This is a very interesting thread.
This sort of thing goes on all the time. I've even seem something like this involved when a sound company was looking to make a big move and purchase a lot of gear. The manufacturer came across with some incredible numbers on a package that included speakers, amps, and consoles. (it was a large "group" that sells speakers, amplifiers, and consoles with different brand names)
They'd do it for you too. Just let them know you are serious about dropping a quarter-million.
The buyers wanted a different brand of speaker, but the offer was too good to refuse. What made this especially sweet, from a business point of view, was that the speakers they ended up "settling" for were higher profile, and easier to rent.
Personal relationships have to start somewhere, and doing a show "on the cheap" can be a sound business investment. It's getting the repeat business at a fair market price that's the tricky part.
I'd put a number in the bid, and explain in writing that you are willing to operate at a loss to show them the level of service that you offer.
You might want to mention that shopping around is something. that they should be doing anyway.
Good luck to you, sir!
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I don't want to go into details on the open forum, but--
Does anyone see any issues with bidding a small show as "50% of the lowest bid"?
I'm not worried about profit on this one, I just don't want to get bitten by something I didn't see/know.
At least in my world, that would not be considered a valid bid. What if someone else bid it the same way? Do you take the next lowest bid and the other bidder would be 50% of that, making him low, so then you'd be 50% of that? But then you'd be low and his bid would be 50% of yours and so on until one of you is doing it for free and the other one is filing a lawsuit for having lost the bid when their bid should have guaranteed their being the low bid.
Bid a number. Clearly state what you are providing for that number and any deviations from the RFQ/RFP. And keep in mind that if you make them a great deal now then you are potentially establishing in their minds that same consideration being a reasonable expectation in the future.
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I'm not worried about profit on this one..........
Here's todays take on this:
This is taking things out of context, said context being businesslike operation and fairness across the board. What about your other customers? How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....". My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.
What goes around, comes around.
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Bid a number. Clearly state what you are providing for that number and any deviations from the RFQ/RFP. And keep in mind that if you make them a great deal now then you are potentially establishing in their minds that same consideration being a reasonable expectation in the future.
That's my plan.
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Here's todays take on this:
This is taking things out of context, said context being businesslike operation and fairness across the board. What about your other customers? How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....". My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.
What goes around, comes around.
Excellent point. I need to consider that also.
I'm glad I asked here with plenty of time to consider the options presented!
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Here's todays take on this:
This is taking things out of context, said context being businesslike operation and fairness across the board. What about your other customers? How happy will they be knowing they have paid one rate and someone else gets a cut rate because "...I'm not worried about the profit on this one.....". My "worry" is staying in business and that means charging everyone a fair and equitable rate for services.
What goes around, comes around.
Excellent point.
I can see it now. An exisitng customer finds out about the low bid and askes why they can't get the same price. "Well I gave them a cheap price so I could gain them as a customer". "Fine (says the existing customer), unless I get the same price, you will lose me as a customer".
And it won't matter if their current price is under the next guys, it will be the principal of the thing that drives them away.
A very serious thing to think about.
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Excellent point.
I can see it now. An exisitng customer finds out about the low bid and askes why they can't get the same price. "Well I gave them a cheap price so I could gain them as a customer". "Fine (says the existing customer), unless I get the same price, you will lose me as a customer".
And it won't matter if their current price is under the next guys, it will be the principal of the thing that drives them away.
A very serious thing to think about.
I agree, maybe Randy has a client where he was able to raise the price to a reasonable level after giving them a fire sale opening price. My experience has been that once you give someone that great deal on the first show they will be pretty resistant to a significant increase to bring them more in line with what you need to make money. You are also likely to be thought of as the "cheap" vendor, and may not even be invited to bid on high profile events.
Bid what you think is a fair price for your capital investment in gear and your labor, and for your expenses. If you get the gig, great, if you don't, have a meeting with the client to talk about what you can do in the future to get their business.
Mac
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Personal relationships have to start somewhere, and doing a show "on the cheap" can be a sound business investment. It's getting the repeat business at a fair market price that's the tricky part.
I'd put a number in the bid, and explain in writing that you are willing to operate at a loss to show them the level of service that you offer.
Even if the client understands that this is a one-time discount, there's no way to guarantee that they aren't just using this as an opportunity to get this one gig done cheaper than they have been and then going back to the other guys for the following gig. Then how would you feel about doing a gig with no profit (or at a loss)?
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I agree, maybe Randy has a client where he was able to raise the price to a reasonable level after giving them a fire sale opening price. My experience has been that once you give someone that great deal on the first show they will be pretty resistant to a significant increase to bring them more in line with what you need to make money. You are also likely to be thought of as the "cheap" vendor, and may not even be invited to bid on high profile events.
Mac
Yeah, that had a lot to do with my statement "If you're pretty sure you'll get repeat business, don't be afraid to put in a low-ball bid." Raising the price afterwards generally hasn't been an issue because I've also increased the level of service. The big gig I discussed in my previous post, for example, consisted of a small 16'x16' stage with all MI gear. The next year I added a (large) truss with a hard ceiling covering a 16'x24' stage. The price went way up. The year after that I added choir risers (the price stayed the same, but it was an okay price at that point). This past year I didn't really add any new equipment to the mix (well, technically I did it with a SAC system rather than a small Behringer disposable powered mixer, but that was for training purposes on my part, not part of the contract).
Other than the client above, most of the work I do is the the $1,000 to $2,000/gig range. I get a few jobs that are $2,000+ now and then, I also do a lot of work under $1,000 if it's one person setup/strike and I have a working relationship with the client. By and large, though, if I'm sending out a team I usually impress the heck out of the perspective client that I'm providing a low-ball bid on and I've generally gotten repeat business. The only time there was a hiccough was when I went from paying my crew as "subcontractors" and went totally legal, paying them as actual employees. My labor costs almost doubled (overtime, taxes, and workman's comp will do that to you). I had lots of clients bitch and moan about getting the price jacked up on them, but they were also relieved that the whole workman's comp/payroll taxes issue wouldn't ever bounce back at them.
The one thing I've found almost *never* works is to do a free job with the expectation that it will get you more work. I do free jobs for some friends now and then; but I have absolutely no expectations from such work other than I'm going to go out and have some fun. The couple of times a promoter was offering me "pie in the sky" returns by doing a "showcase" show for them, I wound up with pie in my face. Doing free gigs is fine if it's what you *want* to do, but never expect it to lead to much else (I can only think of one time where this is happened for me). That's not to say one should never to free jobs; I do 4-5 per years (mostly charity benefit types of shows), but don't do them on a promise of bigger and better things. Make sure you're covering your costs. That's what I do when I low-ball jobs -- I make sure all my costs are covered (well, other than perhaps *my* personal time). This approach has worked quite well for me in the past.
Now, as I've admitted, I don't work at the level of many other people around here. I probably have a bigger rig than your average weekend warrior (particularly considering I do a lot more than just sound), but I *don't* make my living doing this, I still work out of my garage, and it's still mostly for fun. I've been fortunate enough that my cash flow has been in the black for a couple of years now (including all the money I spend on gear every year, which is not insignificant for a "hobby" business). I suspect that when I move into a warehouse unit (and my overhead doubles again), I'll be able to brag about how I've actually "made it" in this business if my cash flow is still positive. Until then, I guess I've just been fairly lucky and haven't made more than the normal number of mistakes.
The *main* thing I've learned in this business, however, is that the quality of your gear, your prices, your technical expertise, and the quality of the show you put on are all *secondary* to how hard you work at keeping the client happy and the event issue-free. I've taken away some gigs from some soundcos mightier than I because they created more problems for their clients than they solved.
Cheers,
Randy Hyde
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The one thing I've found almost *never* works is to do a free job with the expectation that it will get you more work. I do free jobs for some friends now and then; but I have absolutely no expectations from such work other than I'm going to go out and have some fun. The couple of times a promoter was offering me "pie in the sky" returns by doing a "showcase" show for them, I wound up with pie in my face. Doing free gigs is fine if it's what you *want* to do, but never expect it to lead to much else (I can only think of one time where this is happened for me). That's not to say one should never to free jobs; I do 4-5 per years (mostly charity benefit types of shows), but don't do them on a promise of bigger and better things. Make sure you're covering your costs. That's what I do when I low-ball jobs -- I make sure all my costs are covered (well, other than perhaps *my* personal time). This approach has worked quite well for me in the past.
From the Basement... click the thumbnail...
http://forums.prosoundweb.com/index.php/topic,1552.msg8325.html#msg8325
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From the Basement... click the thumbnail...
http://forums.prosoundweb.com/index.php/topic,1552.msg8325.html#msg8325
Nice "gotcha", Tim. And in a parallel vein:
Q: How do you recognize a level-headed Swede?
A: He drools snus out of both sides of his mouth.
DR
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Nice "gotcha", Tim. And in a parallel vein:
Q: How do you recognize a level-headed Swede?
A: He drools snus out of both sides of his mouth.
DR
I never knew one could use a Swede to check the drum riser for level!
Tim Mc
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From the Basement... click the thumbnail...
http://forums.prosoundweb.com/index.php/topic,1552.msg8325.html#msg8325
That was fun.
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That's my plan.
Also, if the venue gets you for dirt cheap, they might not want to pay any higher in the future, since "you did the job for $xxx last time.
Seems like a bottom feeder move.
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Also, if the venue gets you for dirt cheap, they might not want to pay any higher in the future, since "you did the job for $xxx last time.
Seems like a bottom feeder move.
You know, I hear this comment all the time. Never been a problem with my clients. Maybe I'm just a perennial bottom-feeder, I guess.
Doing jobs at a discount, especially if you make it clear that you're doing the job to prove your capabilities, is a *marketing cost*. No different than any other form of advertising you pay for. I've done lots of these types of jobs to "prove my mettle" and I'd say that 3/4 of them have worked out. I generally price the jobs so that I make money *on that job alone* (that is, I don't consider the extra overhead costs, like equipment replacement, having to cover the fact that I might not be doing a job next weekend, etc., etc.). If the client comes back and says "well, you worked for $xxx last time, I want it for $xxx this time," I simply point out that I gave them an introductory price and the introduction is over. If I'm not good enough for $yyy, then they need to hire someone else (who will, in my case, undoubtedly cost them $zzz where $xxx < $yyy < $zzz). Most of the time I don't get any static from the clients at all because they know that I'm generally quite a bit less expensive than the alternative.
However, YMMV because I have a day job and I don't have to make a living doing this kind of work. I can afford to pass up the boring (but paying) corporate gigs and (usually) concentrate on fun stuff. That said, I will admit that I've done a lot of $500 jobs for clients who hire me for larger work but need a small entertainment stage at a "Farmer's Market" or some such. Not at all a money-maker, but it keeps the client happy so that I get the larger (and more interesting) jobs from them. The bottom line is that their budget wouldn't allow more than $500 for that particular job, they don't care if I use all MI gear for it, they just want something going on. If I can do it by myself (i.e., not involve any employees), I actually pocket a few bucks; if I have to send an employee out to do it, well, I break even (when all the beans are counted). I put that down as a marketing cost. The bottom line is that I'm willing to work with my regular clients and I realize that not every show they do is a full-out rock concert; sometimes, they've just got a small little thing off in the corner of the shopping center or park that they want done. Taking care of them in situations like that is what keeps the larger jobs coming...
Again, it's all about marketing.
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You know, I hear this comment all the time. Never been a problem with my clients. Maybe I'm just a perennial bottom-feeder, I guess.
Doing jobs at a discount, especially if you make it clear that you're doing the job to prove your capabilities, is a *marketing cost*. No different than any other form of advertising you pay for. I've done lots of these types of jobs to "prove my mettle" and I'd say that 3/4 of them have worked out. I generally price the jobs so that I make money *on that job alone* (that is, I don't consider the extra overhead costs, like equipment replacement, having to cover the fact that I might not be doing a job next weekend, etc., etc.). If the client comes back and says "well, you worked for $xxx last time, I want it for $xxx this time," I simply point out that I gave them an introductory price and the introduction is over. If I'm not good enough for $yyy, then they need to hire someone else (who will, in my case, undoubtedly cost them $zzz where $xxx < $yyy < $zzz). Most of the time I don't get any static from the clients at all because they know that I'm generally quite a bit less expensive than the alternative.
However, YMMV because I have a day job and I don't have to make a living doing this kind of work. I can afford to pass up the boring (but paying) corporate gigs and (usually) concentrate on fun stuff. That said, I will admit that I've done a lot of $500 jobs for clients who hire me for larger work but need a small entertainment stage at a "Farmer's Market" or some such. Not at all a money-maker, but it keeps the client happy so that I get the larger (and more interesting) jobs from them. The bottom line is that their budget wouldn't allow more than $500 for that particular job, they don't care if I use all MI gear for it, they just want something going on. If I can do it by myself (i.e., not involve any employees), I actually pocket a few bucks; if I have to send an employee out to do it, well, I break even (when all the beans are counted). I put that down as a marketing cost. The bottom line is that I'm willing to work with my regular clients and I realize that not every show they do is a full-out rock concert; sometimes, they've just got a small little thing off in the corner of the shopping center or park that they want done. Taking care of them in situations like that is what keeps the larger jobs coming...
Again, it's all about marketing.
True, I just wouldn't feel comparable trying to put in a bid that's "50% lower than the lowest bid"
As a band I know we NEVER play for free, except the off chairity fundraiser, which is few and far between. We never give discounts because if the word gets out that "well, you played that show for $xxx instead of $xxxx" then you'll never get your rate again.
I too have a daytime job, so I'm able to pick and choose the gigs I want to cover, so it works out.
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Thanks for all the answers guys. They were (almost) all helpful.
In the end, I think folks on both sides of the issue are correct. It depends....
I'll let you know how things finally work out.
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Personal relationships have to start somewhere, and doing a show "on the cheap" can be a sound business investment. It's getting the repeat business at a fair market price that's the tricky part.
I'd put a number in the bid, and explain in writing that you are willing to operate at a loss to show them the level of service that you offer.
Even if the client understands that this is a one-time discount, there's no way to guarantee that they aren't just using this as an opportunity to get this one gig done cheaper than they have been and then going back to the other guys for the following gig. Then how would you feel about doing a gig with no profit (or at a loss)?
This where the business decision making comes in.
There is always a chance that "the other guy" really is as good as you are at doing the gig, but is just a poor businessman.
There are a lot of ways to advertise. A full-page ad in a daily newspaper can cost thousands of dollars, and never generate enough business to justify the cost. A series of ads in the local arts weekly can cost a couple hundred bucks, and bring in all kinds of work.
You have to analyze the risk/reward, and decide if you are in a position to suck up the results of the worst case scenario.
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It was suggested to me that I simply invite them to other gigs we're doing so they can see how we work and the results we provide. The invitations will be to both soundchecks and shows.
I don't know why I didn't think of that, but that's what I'm going to do.
If they can see and hear a difference, great. That doesn't mean they'll be willing to pay more, but at least it will be an informed decision.
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It was suggested to me that I simply invite them to other gigs we're doing so they can see how we work and the results we provide. The invitations will be to both soundchecks and shows.
Hi Dave, We do that all the time, costs little and can pay off big.
Regards, John
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It was suggested to me that I simply invite them to other gigs we're doing so they can see how we work and the results we provide. The invitations will be to both soundchecks and shows.
Hi Dave, We do that all the time, costs little and can pay off big.
Regards, John
Thanks to all who have contributed to this thread, I really appreciate it!
The rest of the story-- I decided not to go the low-ball route at all.
I bid each show correctly, and got outbid on the early shows by folks with mismatched mains and orange power cords.....
I continued to invite them to my other shows and submitted very detailed bids.
I'm not completely sure of all the reasons, but I finally got a show. We'll see what happens.