What is undercutting?

Develop the client...why are they shopping your signed contract? 

Price is never the issue. The issue is always value and cost is only part of what makes up value.

I wish you luck on your endeavor.  

Yep, sounds like they already have your competitor as their Surveyor, but need to keep them honest by providing rates of other Surveyors such as yourself. Keep an eye on which “potential clients” are shopping your rates and raise your rates for these jobs. Odds are that you aren’t the only company providing comparables though. The way I’ve treated this in the past is by replying with questions that require the “potential client” to dedicate a good amount of time and effort to respond. Most people don’t want to waste time (money) on answering if they don’t expect to obtain your services. 

There is somebody like that is every area we work in.

As I go along in this AEC business I become more and more aware of the fact that surveying is a nearly trivial cost to a project compared to Architecture and Engineering, and Architecture and Engineering is a trivial cost compared  to construction. Yet a poor survey can inflate A & E costs and impact design quality, and poor design inflates construction costs.  So if you are dealing with developers who are concerned about a few thousand on a survey cost estimate you are dealing with fools. 

If you are dealing with homeowners - or other forms of unsophisticated clients - then price is always going to be number one. You will be beaten by anybody who comes in $1 under. Tough to make money in that line.

One of Dan Beardlee's "gospels" is that if you aren't getting jobs, it isn't because you are charging too much. Another is that you don't want or need all the jobs.

Choose your clients wisely and set your rates objectively.  Provide good value and you will do OK.          

Surveyor Bob S. gives Mr. Soandso an estimate and time estimate. Mr. Soandso gets smaller number from Surveyor A. Hat. 

Surveyor Bob gets call from Mr. Soandso...need the survey fixed from Surveyor A. Hat...gets estimate from Surveyor Bob for time and money 125% of original estimate...

Be Bob, not A. Hat. 

Surveyor Bob S. gives Mr. Soandso a cost estimate and time estimate. Mr. Soandso gets smaller number from Surveyor A. Hat. 

Surveyor Bob gets call from Mr. Soandso...need the survey fixed from Surveyor A. Hat...gets estimate from Surveyor Bob for time and money 125% of original estimate...

Be Bob, not A. Hat. 

This problem isn't unique to small surveying businesses. What you're dealing with are price shoppers. You will need to learn to ask more qualifying questions to identify these kind of people and avoid them and turn the tables on your competitor and load him up with those PIA clients that you don't want. Ask more questions of the potential client, the why, what and when questions. Eventually you'll see them coming a mile away and send them straight to your competitor. It's normal with a new business to want to take every job that come through the door but I think you'll quickly find that isn't how you remain profitable. It's the old 20/80 rule. 20% of your clients will constitute 80% of your headaches.

Education comes from bad experiences.  Bad experiences come from attempting to land every job that comes along.  I am now so experienced, it is pathetic.  Today, I understand how to politely tell potential clients to go away.

You need to take a hard look at your business plan, starting with the name of the company. It seems to me you are trying to be everything to everyone, and it doesn't work that way.

Makes me wonder what the current demand is for mortgage surveys in Tucson.  

If you can really low bid the jobs, you might drive the other guy out of business trying to match. 

I'm not advocating doing it, but it sure would be fun. 

I've had a couple of similar situations. 

The last one was getting put on a list to do "Federal" work for an engineering company. Spent hours and hours "qualifying" for the work and never got any. Finally, I accidentally found out lots of work was going out, just not to me. So, I withdrew from the constant paperwork process and saved a bunch of my time. 

If you can really low bid the jobs, you might drive the other guy out of business trying to match. 

I'm not advocating doing it, but it sure would be fun.... 

I once had a steady client (CE  firm) and enjoyed a couple of years of getting most all their work.  The work tapered and I soon discovered I was being low-balled by another surveyor.

We generally had no contract but worked on a quoted price-time.  I realized the client was sharing my info with the other surveyor who was apparently doing the work for some amount less than I quoted.  I did stick it to him by purposely quoting low on a couple of jobs.

Finally the other surveyor balked on a job I quoted too low.  When the client called me back I was sorry to tell him things had picked up and I was way too busy. 😉

Life's too short.  Don't try to court firms that are willing to screw you around.

@fairbanksls  Residential mortgage applications in Tucson for qualified buyers is very slow, per my daughter-in-law the broker, so I imagine mortgage surveys are all but dead.

If the competitor is setting his price purposely just a bit under yours after receiving a copy of your proposal, that is unethical.  some states do or did have a provision in their Board Rules to that effect.  If that's true in AZ and you can get clear evidence that this is happening, show him the evidence and telll him to knock it off, or just file a complaint.

But if this is the case...

There hasn't been enough time to call a client back and ask how it went. 

Then you're too busy to concern yourself with it.  As others have said, concentrate of the quality of your own work, develop your best clients. 

Those who compete on price are typically able to do so by cutting corners in their work, and that will eventually catch up with most of them in one way or another.  They may find themselves at the losing end of a negligence case or settlement, might get their license suspended or revoked and/or get a substantial fine from the Board.  At a minimum, their entire client base will eventually be comprised of the clients you wouldn't want to deal with anyway.

If I was to go broke, which I did once, I'd rather do it by continuing to do good work at a fair rate on too few jobs than by performing a ton of work for too little money while accumulating unsustainable liability and building a reputation as the Kmart equivalent of the land survey community.

First of all, congratulations on the new biz, it's a fantastic feeling to get rolling. 

You've gotten some really good advice here, so I just wanted to add a few things.    If you are getting signed contracts then they want to cancel, I'd talk to my attorney about how to word those contracts.  Maybe put a clause in there about cancellation and billing time spent.  

It seems like you know who you're losing out to on these deals.... could it be a burned bridge situation? 

Also, I would review your website... some items need to be tweaked for alignment! 

I would really take Bruce Small's advice to heart, he knows that market well, and how to run a lean survey biz!  

I run into this all the time, My biggest competition is semi retired guys looking for golf money. I refuse to lower my prices because I value my license since I'm basically 1 of the 10-ish PLS' under 40 in my state, so I will be doing this for a while. So they book months out and I can get to a job in 2 week and I get the proper amount of work to keep my quality much higher than everyone else.

I was told early on it takes 2-3 years to get past the bottom of the barrel jobs and build up enough notoriety for your business to take off, I'm almost 3 years in and it appears to be true.

I'm mostly a residential surveyor so people will shop around to save $50 which sucks, But occasionally I get sent other peoples surveys and they are indeed producing a product that just barley meets local standards. Keeping my prices higher allows me to take less work and make a fair living, which is great for me. Now if you have employees to keep busy.... I can see grabbing as much work as possible, I just wish it wasn't at a 25-33% discount. 

Hang in there, Competition cant take all the work, and they will start pissing people off. Everyone that calls me thanks me for answering phone, and enough of them value it.