How To Make More Money As An Electrical Contractor?
I still cannot believe the number of electrical contractors and electrical business owners I work with to find that they are blindly discounting all of their profit away. If you want to make more money as an electrical contractor, you will NEED to get to know your pricing and set it in stone.
1. Don't Discount - They Cut Right Into Your Profit Margin
Now that you have watched the video, you will hopefully understand the effect that discounting can have on your business and if you are not measuring the profit you have made after every job, then you may find yourself wondering why you are never making any money. I understand that discounting can get your customers over the line but you also want to understand that if your original price had a 20% margin on it and you discount 20% - you have just discounted 100% of your profit away and you are now working for free.
2. Know Your Costs - Only Accept Profitable Jobs
In the end, it's not about how much work you are doing, it's about how much profitable work you are doing. You can be fairly priced and you are allowed to make a profit but do you think it is fair on you and your family if you are giving your money away to a stranger through your discounting? You will always face customers who are going to try and screw you down on your price, there is no avoiding that, but you can be better prepared and have a solid pricing structure where you KNOW that you have a profit built in as long as you do it in the allotted time.
Develop a deep understanding of your costs and how much your electrical business costs you to be in operation per hour based on a 40 hour week. Then you will have a better understanding and drive around the effects that your discounts have on your business. This will also give something to discuss with your prospect if they are trying to make you work for less than it costs you to run your business. You can say "sorry, it costs me $90/hour to run my business and I need to make a profit for my family. Even better, you could implement the Shopping List Pricing System that we teach in the Academy to maximise your profits and get a real understanding of your costs per item.
3. Work On Developing A Better Rapport With Your Prospects
So you feel as though you need to win the job. This can certainly be done without the need to ever discount. Think about when you go to the supermarket, do you ever walk up to the manager and ask to get your groceries at a discount? Do you even know anyone that does that? This is because as a consumer, you know that the prices are set and then it is up to you whether or not you choose to buy them.
Work on demonstrating that you are set in your prices and you have carefully calculated them to provide your customer with the best possible service and materials at the best possible price. If they truly believe that as you do with the supermarkets, they will not argue, they will either take it or leave it and be okay with that - it's your family's money you are giving away if not.
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