Lesson Learned Contractor Marketing episode 91

 

 

So the saga on the experiment for episode 89 could you has flexible pricing?

 

Let’s talk about the lesson learned and have some fun at my expense.

Just to get a little overview on episode 89 lets go back for a moment to get you caught up I did the episode in response to a Facebook post I saw about some people complaining about being beat on pricing in their area and got to thinking about could you have flexible pricing to go into a new area or go head to head with someone else’s pricing.

So knowing my numbers and running the numbers I decided to run an experiment the funny thing about running the numbers they may work on paper and in theory it may work. But when you get into the real world and the little nuisances that can go wrong the equation never adds up the same way.

So off I go to try the experiment I reduced my price to half price on a roof clean and house wash

And that day everything went well, I made a decent profit for the day and all was well for that day then the sun set and the sun rose and another day was here.

Then I got a call from the customer and had to go back and make her happy and as most of you know when you go back to a job no matter what happens it’s for longer than you want. So in this case its really 3 hours with 2 men, no now its 6 man hours and vehicle and equipment expense.

So here is one lesson learned the real expense of what it take to go back after the job is supposedly done. Let’s run the numbers.

Let’s say you break even is 38.00 per hour add 45% profit you need to charge 70.00 per hour

Then you have vehicle expense let’s say for argument sake its 15.00 per hour so 2 men and a truck is 155 per hour now you add your 3 hours comes to 465.00 it cost you to go back . But in reality that is not a true figure.

The true figure is it actually cost you 930.00 no it cost me 930.00 to go back because you have to figure in lost revenue yes lost revenue because I should have been somewhere else making a profit for the company .

It cost me 930.00 to go back on a job that was less than a thousand dollars. The irony if I had charged my regular pricing I would have made 130.00 profits when the dust settled.

The other lesson learned is don’t mess around with your pricing it’s that simple stick to you guns. You can experiment on going up but never go down .Because when you mess around and go down Murphy always shows up to mess up your day.

Your number one goal as a business owner is to make a profit for your company it’s your responsibility.

It’s not your responsibility to be the cheapest, to brag about how busy you are or brag about how much you charge the customer. It’s your responsibility to make and keep you company profitable. And to know your numbers and charge accordingly is the start of being a profitable company.

Every day is a learning experience this is just one of the many lesson s learned.

Thank you to our sponsors this week who make this program available to you.

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UAMCC

United Association of Mobile Contract Cleaners is a nationwide network of contract cleaning contractors that embraces the power washing, window cleaning, carpet cleaning, and mobile cleaning industry. More Than Just A Contract Cleaning Association providing contractors with the tools necessary for growth, the UAMCC can assist homeowners and property managers connect with insured, qualified contract cleaning companies. No more guesswork and no more worrying if your contractor runs a legitimate business. Go to uamcc.org that’s UAMCC .org to learn how you can be the best in your industry   check out the UAMCC here