ECN Forum Forums General Topics of the Trade General Discussion Area Making my business grow...

In reference to losing customers when you raise your prices: If there was a longstanding relationship that was lost because the price went up, either the price went up too much for the market in general or price was the only reason you were getting the jobs. If you are still getting and satisfying customers your prices are not out of line. Quit wasting time on the ones who look primarily at price. Let the people who will be out of business in 4 or 5 years because they are not factoring a reasonable profit in their prices take care of those customers. The company has to make a reasonable return on its time and other resources to survive in the long run. Like the cowboys that went into business selling hay. After a couple of weeks buying hay at $1 a bale and selling it for $1 a bale they realized they would need a bigger truck to make any profit. Or a friend of mine who told me when he first went into business he was successful on all his bids. He was working 60 hours a week and almost starving. Spend time where the best profit is, whether that is specialized work or best paying customers. And don't feel guilty about leaving a longtime customer; he can replace a low price contractor easier than you can replace him, but your reward will be better in the long run.

A good place to find out about what should be included in a good estimate can be found in Mike Holts estimating course or Neil McCain's course at http://trades.net/discus/messages/board-topics.html

So True.
I raised my rates after my 3rd yr, lost a few customers, don't miss 'em at all!

I just figured up that business expenses are in the $1200 per month range counting vehicle (100K miles in five years) fuel, maintenance, insurance, tools, licensing, liability, phone, cell, electricty, computer and office supplies, etc...

I'd like to make $20 per hour at least for now free and clear (except taxes). This comes to about the $28 range that alot have suggested, but does not allow for health and life insurance or a retirement plan.

I hope to slowly increase my rates over the next few months to achieve this figure by the end of the year.

This is all based on 40 hour weeks and steady work... Which may offset some.

I guess its a plan(?)

Have a plan, that's what they told me, sit down an do 1yr, 3 yr, 5yr speculations. Worked fine until the bear ate wall st.

Me too, things were going strong all Y2K until Gore freaked out and the people lost "consumer confidence", then all heck broke loose on wall st.

I sort of say tongue in cheek that to any Venture Capitalists out there... I won't squander like the dot coms did...

I'm reading this thread and I wish some of you would give me a chance to help! How much business do you loose because no-one answers your phone? Or because the machine picks up and they call the next guy in the book? I started my business just because I had friends in the same place you guys are in. Well I really can help.

Insurance is the big problem, you guy's need to get together and form your own. That will beat down your cost. It has been done in Nj for auto ins. A lawyer formed a group of low risk drivers at first and the company grew very large now.
It can be done. If you cut that rate in half you would be living large!

Beth,

Are you talkin' health and life or liability?


This thread was about various liability premiumns, most, myself included were less than $400 per year, which incidentally is 1/12 of what you charge for your services. How do you suppose that me saving $275 per year but spending $400 per month is going to improve my cash flow?

Please be careful.. You are among wolves...

I do admire your perserverance Beth, it in itself should constitute marketability.

Contractors liabilty insurance can be had in a group rate through local contractors associations, even national orginizations like the NASE. The catch is, ya gotta join, but hey go crunch the ####'s..

Life insurance is a thread in itself, it really only costs 3K or less to put my A** in a pretty urn for the mantle, headstone , empty casket, limo, and maybe a keg or two afterwards. Big deal!, your much better off to gamble a lame mutual fund in a tax shelter SEP , even in a bear market.

Health Insurance far outwieghs both in $$$$, it is a necessary evil that comes as close to extortion as you can get.
Ask any senior citizen livin' on purina about the pharmacutical cartel they dish out for...
talk about wolves!

[This message has been edited by sparky (edited 07-28-2001).]