Pass those savings along?

I read an article this morning where the author talked about passing savings on to clients. While this sounds well and good, I would caution you to place this low on your list of priorities when you’re putting a job together.

You have worked years learning your trade, or at least most of us have. Many of my good friends have 30 and some over 40 years in this business. Having that kind of staying power is the result of studying and practicing good business practices. The paramount business practice is to make sure that your company makes money on every job you do – if you don’t, you won’t stay in business. Being profitable is a requirement for survival. And this isn’t a practice round – it’s the real thing.

You go on a sales call, get the answers to your four basic questions (as discussed in Profitable Sales, A Contractor’s Guide) before you do any estimating or give away your ideas or suggestions. Get a commitment, do your design, compile your estimate, write your agreement and present the package for signature.

Along the way, if you find some good buys on materials, that’s great. You are under no obligation to share those savings with anyone, much less a potential client. Tell me, how many would be willing to pony up more money if the material cost increased AFTER you signed a contract?

Being concerned about passing along “savings” to your clients shows that your focus is on price – and it focuses your clients on price. Your focus should be presenting yourself and your company as the contractor for the job, i.e., the Contractor Of Choice. Price becomes the issue on sales calls if you make it the issue.

Michael Stone

The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses. He is the author of  Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations. More here.