Improving profits on construction contracts can help your business succeed and put more money in your pocket. The key to any successful business is correct pricing. There are tips for pricing that can drive more business through your doors as well. This article will look at ways to improve profits on each contract and techniques for getting more of them. Your knowledge and skills as a contractor are worth money so don’t undercharge for anything. Similarly, pricing too high can scare off customers. Here are five tips to improve profits on construction projects:
Offering discounts may seem counter-intuitive but we will explain why it’s not. If you offer, let’s say, 10% off the job for new customers or for referral business, you will have to set your base prices higher so that you are not losing money. The higher base prices only convey that your skill and knowledge are worth the investment and show that your company is high end. With discounts, your customer will still get a good deal and you will drive more business to your company.
Time is money
Time management is the hallmark of the successful business. Make sure that you are spending your time wisely and that projects don’t get behind schedule because this can be costly. Time is money, as they say, so your workers should not be goofing off on the clock and you should focus on the important issues that require your attention. When snags come along it is important that they are handled professionally as hidden costs are bound to come up in this profession. Have a backup plan in place and you won’t be wasting time trying to figure out a resolution when something unexpected occurs.
Proper money management is also important for your business and a great way to improve profits for each job. Don’t waste money when you can avoid it. When there are multiple different prices for the same materials get the best price that you can. There can be two identical products at very different costs so make sure you are getting the best deal. Don’t pay more for something you can get for less. Even though the higher price may sound like a superior product, this is false. Many stores or even wholesalers have different price tags because their overhead costs of operations are different, so do some research to find the best materials for the job at the best price.
As stated in the point above, getting the best possible prices for materials is important. Make connections with suppliers and seek out discount stores that have materials that are just as good as you would find in a Lowe’s or Home Depot. Purchasing materials at remnant stores or second-hand does not necessarily cut down on quality. Make connections and build friendships with your suppliers so you get materials at a discount. The customer will not know the price you pay, but if they are happy with the results then there’s no harm done. If you prefer to pass along the discounts you get to your customer, they will be even happier still. Customers love to save money.
Up-to-date software and cutting-edge technology can definitely improve your profits. Software that helps you bid jobs and conceptualize plans is a great way to save time and money. There are programs that can analyze blueprints, help you design the renovations (e.g. AutoCad), and budget the project properly. These software programs, though they may cost money up front, will help with efficiency, accuracy, and professional finishing so that your project looks perfect when it’s done. If you want to kick it up a notch you have to get with the times. Using technology to your benefit will save you money in the long run, and increase sales and profits.
Professional contractors who want to improve their profits are taking steps to do so by working smarter, not harder. Are you working hard or hardly working? If you follow your passions in life then maybe your job feels more like a hobby. Don’t get bogged down or feel taken advantage of because you are working for less than what you’re worth. Remember that you provide a valuable service for people – you work on their homes: the place they live and spend most of their time. Your pricing should be fair for both you and the customer. If you price jobs the right way customers will be beating down your doors to have you give them the best service available.