Don’t confuse profit with salary or hourly wages. Making a profit isn’t optional: Your business needs profit to survive.
It’s important to be focused on profitability. You’re in business because you want to keep a roof over your head and food on your table; you can’t do that when your business is losing money.
You can’t lower your price and expect to make up for it by selling more, because there is a limit to how much you can produce. Every job needs to be profitable.
Some clients want the lowest bid for their project, and nothing else matters. It’s your job to try to educate them.
Remember, you’re in business to provide a service and make a profit doing it.
It is a fact of life that when you sell construction-related services, you’ll have clients tell you that your price is too high. Bless their hearts. They have no idea what would be a fair price for the work they want done, they just know that your price is too high.
I read many articles on the construction industry looking for, among other things, information on how the construction industry is doing and what we can expect in the immediate and near future. One statistic that always interests me is the size of the average remodeling job.
In every business, some things we do eat into our profitability. Do you run your business or does your business run you?
I applaud this person’s efforts, helping someone else with the business side of business so the craftsman can continue being a craftsman. But this craftsman is going to have to either learn how to run a business or start charging enough for his work to both feed himself and pay an office manager.
Many of our website visitors aren’t contractors, they’re clients looking for help with a Cost Plus project gone wrong, or wondering if their contractor is overcharging.
Why would any serious construction-related business owner want to be the lowest bidder on a project? Let’s look at what that means.
Rabbi Lapin and I have the same opinion of that message – Horse Apples. He doesn’t say it that way, but I will. Most who prosper financially work to earn what they have.
I read an article where the author talked about passing savings on to clients. This sounds well and good, but place it low on your priorities when putting a job together.
Often when I talk with contractors, I hear, "I want to grow my company so I can make more money." Consider this, if size mattered, dinosaurs would still be here.
I heard about a scam a local building owner is pulling on his subs. He has several properties and is apparently worth a considerable sum.
Brian Tracy had a great quote today from Comedian Bill Cosby, "I don't know the key to success, but the key to failure is trying to please everybody."
I’ve talked about focusing your attention on the 1, 2, or maybe 3 things you do well and make the most profit on. Doing a good job of advertising and promoting those.
Someone once said, “No man’s business is safe while the legislature is in session.” Here is another example.
Michael takes a minute to talk about the value of making a profit. (video)
The ancient Chinese philosopher Confucius said, "The man who chases two rabbits catches neither."
I have had several discussions of late with contractors who can't accept that they should sell quality, value and service instead of trying to play the low price game.
If you are tired of starving because you have enough work but don’t have the money to pay your bills, heed these words.
Time for a quick review of some terms: gross profit, net profit, owner’s salary, owner’s wages. Owner’s salary is overhead, owner’s wages are a job cost.
If I’m a remodeler making a 44% gross profit, I’m doing great, right? It depends. Your gross profit means nothing if your sales will not support your overhead expense.
After reading our last newsletter, one of our readers wrote in and asked if my recommendation of 8% profit and 8% owner’s salary was a coincidence.