How much thought do you put into your project estimates? Knowing how many hours, how much manpower, and what materials you will need to complete a specific job isn’t enough to ensure the price you quote will create profit. Ensure you are building a profitable business with these tips.
1. Know Your Expenses.
You should always know how much it costs to run your business, not just how much it costs to complete a specific project. Each job must also cover expenses such as financing fees, gas, vehicle maintenance, office space, the electric bill, paper, pens and the thousands of other little expenses that are part and parcel of running a business. If you don’t already know how much you spend on overhead costs, review your expenses from previous years to get a rough estimate. Divide your annual overhead costs by twelve to figure out your monthly expenses and consider how you want to account for those expenses in your estimates.
2. Determine the Project’s Cost.
Labor and material costs are two of the largest expenses to consider for individual jobs. Remember to include any benefits you offer employees when figuring out your labor cost, rather than just their hourly pay. Travel time, gas, safety considerations and general accessibility can also impact how long it could cost to safely complete a job and should be taken into account.
3. Price for Profit.
Don’t fall into the trap of trying to offer low prices and instead, focus on the quality and experience that you provide. If your customer would prefer to avoid a large out of pocket expense, consider offering them a monthly payment plan. When creating an estimate for a job, remember to add up your labor, material, and overhead costs to get the break-even price, then add a percentage to cover your profit goal and any unexpected costs that may arise.
4. Take Advantage of Financing.
Very few companies can survive by being a low-cost option. Instead of cutting costs and crippling your profits, offer customers an affordable alternative – financing. Use Foundation Finance’s payment estimator to show your customers how low their monthly payment could be or offer a special promotion to close the sale. We offer financing options with no dealer fees for many customers, but remember that offering financing can help you close more sales, so even programs with fees can make sense if it can expand your buyer pool.
Interested in other ways Foundation Finance can help your business grow? Contact us for more info: 1-855-241-0024, sales@foundationfinance.com.
You can build on us. Enroll in the Foundation Finance dealer network today.
