Raising prices can be a sore subject. Many construction business owners like you assume doing so will spell the end of your competitiveness. But by not raising prices, you're simply letting inflation and your suppliers' maintenance of your margins quietly eat away at profitability. The bottom line is that costs will always rise long-term - at least with inflation.
That means you have to pass on the costs to your customers or consume those costs yourself to the point where one day, you'll have to either suddenly raise prices or accept the eventual failure of your business.
The worst thing you can do is avoid measuring your costs by sticking your head in the sand. Cost rises will catch up with you eventually, so take action to maintain your margins.
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Topics:
Marketing Tracking,
Construction Marketing,
Construction Accountant Who Listens,
Contractor Marketing,
Contractor Tips,
Pricing Jobs,
How To Raise Prices
As prices continue to rise, you've likely noticed that your cost of doing business has increased as well. After all, the main point of any business is to make money, and you can't do that if you're no longer breaking even.
It's inevitable in every industry – you must raise your prices to continue making a profit. Many factors decide how much to charge, all of which are dynamic. The rising cost of goods, inflation, and a changing market are just a few reasons why any small business has to reevaluate its rates regularly to stay competitive (and to stay in business).
If you're overworked and overbooked, you're undercharging. People know your worth and are fighting for your time. It's time to increase your prices!
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Topics:
Construction Bookkeeping And Accounting,
Contractor Tips,
Contractor Guidance,
Pricing Jobs,
How To Charge Clients,
How To Raise Prices
There comes a time for every small business to raise its prices. While it may seem scary, remember that it's your job to keep costs fair for you and your customers. That means you have to charge prices that work for you and allow you to remain in business.
Am I Not Charging Enough?
Knowledge leads to profits and cash flow. What makes knowledge powerful? Use of knowledge. In this cutthroat construction industry, you may not be able to outgrow your competition forever, but you can always outlearn them.
Knowing The 80/20 Rule For Construction Contractors will surely help:
- 20% of your customers typically generate 80% of your net profit
- 20% of the goods or services you sell contribute 80% of your revenue
- 20% or 2 out of 10 of your staff create 80% of the value for your customers
The frightening consequence of the 80/20 rule is that 8 out of 10 hours we spend at work drive almost no value to the bottom line, and the most significant drain is trying to save money doing our contractor bookkeeping instead of reviewing the Key Performance Indicator (KPI) Reports.
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Topics:
Construction Bookkeeping And Accounting,
Contractor Tips,
Contractor Guidance,
Pricing Jobs,
How To Charge Clients,
How To Raise Prices
