Contractor Biz

IS YOUR BUSINESS MAKING A PROFIT

Believe it or not, there are a lot of contractors out there that have no idea why they charge what they do. Most of them charge rates based on some crazy square foot price or yardage that they heard other contractors are charging. It's hard to imagine busting your back day in a day out charging a price that Jimmy down the street said was a good price just to find out once the dust settles at the end of the season you have absolutely no more or less money in your bank account than you started with. I've been there. I'd work morning to night hustling my ass off just to find out at the end of the year I didn't make any money. Man, did this take the wind out of my sails.

We made some adjustments over the years but it still wasn't satisfactory and then one winter during our slow season, me and a few of my fellow friends that had contracting companies decided to sit down and analyze our businesses. Wow! This was an eye opener, none of us were making the money we thought we were making. All three of us had businesses with revenue that ranged from 1.8 to 3.2million at the time. We got back to the basics and analyzed all of our numbers; Cost tracking, budgeting, employee rates per hour, profit margin, overhead, expenses. By the time we were done we all came to very similar conclusion that we weren't charging the right price to be profitable. From that point forward we all stopped charging for tasks by the square foot and run every project through our estimate form and now we know we are charging the right price.