Would you sell a Dollar for 90 cents*?  Or  85 cents*? Or 80 cents*?  Of course not, but that’s what many contractors do on a daily basis.  Over the last few years in Continuing Education Classes, I have encouraged you to know what your costs are and to charge enough to make money- be profitable.   Some of you have listened.  I opened the following email a few weeks ago:

Thanks Scott for your EXCELLENT Advice.  I kept raising my prices to levels I FEARED because you set more realistic TARGETS I couldn’t imagine.

 1. I took my first vacation in 10 years last year.  It worked out so well we took a second trip to Italy.  This year we’re already booked for Spain this January.

 2. I kept raising my prices for service and NOBODY NOTICED, No one noticed our labor rate went from $xxx an hour to $yyy an hour. (xxx and yyy are different for each organization)

 3. I was able to afford to paint our first van with the rest being scheduled for wrapping and painting this year.

 4. I’m finally working on the business process and putting together a training program to replace my hands in the field.

 Thanks for Reminding me of my GOALS so I could have the TARGET to hit and the Balls to pull the Trigger.

Running a business is straightforward, but it isn’t easy.  If you don’t know what questions you should be asking or how to get the answers- it makes it almost impossible.  

The first question you should be able to answer is “What are your numbers?”  Successful business people know their numbers and when their numbers aren’t what they want them to be (happens to everyone), they make changes in their operation to get back to the numbers they need. I know one VERY Successful contractor who closes all of his residential jobs the next morning by 10 am.  If he lost a nickel yesterday, he doesn’t’ want to lose another nickel today.

Also, successful business people aren’t afraid to pay themselves fairly.

Come to our class to learn about your numbers, where they come from and what they mean.  How much Working Capital do you have?  Is it enough to support 10% growth, how about 20%?  What is your cost of a service call and how much profit do you expect to earn on each call?

We will also discuss some of the tough decisions you have to make.  Should you take a job for 5% less than you quoted?  You’re having problems with your formerly best employee, what now?  Your Customer will pay you net 10 for a 3% discount, should you take it?  I’m interested in selling my business someday, what do I do to be prepared for that day?

* Every time you charge less than a dollar for a dollar of work YOU and YOUR Family are taking money out of your pocket to subsidize your customers.  WHY?

18 years ago I closed my business.  30 people went on the street that day.  The three biggest reasons were I didn’t’ charge enough for my services, I didn’t know my numbers and I wasn’t capable of making the tough decisions.  I had the opportunity to be financially successful, I would like to help you achieve your own version of success.  This applies to people who work by themselves, there are more one man bands who make $200-300k annually here in NJ,  as well as to people who have 30, 40 or more employees.