Pricing Calculator
Calculate the Sale Price of Any Job to Hit a Desired Amount of Gross Profit Every Time and Remove the Risk of Leaking Profit
Gross Profit Margin Targets
01
PRICE FOR GROSS PROFIT, NOT MARKUP
The biggest pricing mistake we see from Plumbers, Electricians and similar business owners is adding a mark up on materials and labor and presuming that is their profit margin. It’s not. The biggest pricing mistake we see from Plumbers, Electricians and similar business owners is adding a mark up on materials and labor and presuming that is their profit margin. It’s not.
The biggest pricing mistake we see from Plumbers, Electricians and similar business owners is adding a mark up on materials and labor and presuming that is their profit margin. It’s not.
The solution? You must calculate the gross profit margin for all your jobs before you send your quote/bid and again once the job is completed.
02
PRICE FOR
A TARGET
Having a clear Gross Profit Margin target for your quoted jobs and charge up invoices will stop you having to “take a stab in the dark” each time you price a job and take emotion out of pricing.
Having a clear Gross Profit Margin target for your quoted jobs and charge up invoices will stop you having to “take a stab in the dark” each time you price a job and take emotion out of pricing.
The solution? You must calculate the gross profit margin for all your jobs before you send your quote/bid and again once the job is completed.
03
BACK COST
YOUR JOBS
Back Costing is the process of checking the job once is it completed to see if you hit your target. The purpose of Back Costing is to find jobs where you didn’t hit your target so you can look for what went wrong and make adjustments for those jobs next time.
Your back costing will also highlight what type of work is most profitable for your business and whether any particular customers are better to work with. An example would be a particular building contractor whose work is more profitable or is better organized. Check out more back costing tips on the next page.
01
Check the hours of labor vs budget, as labor overruns are the biggest cause of lower profits.
02
Calculate the Gross Profit Margin on each completed job, not just the dollar amount of profit.
03
Use a job management system to automate the process. It’ll save you hours.
04
Check the GP Margin on all Charge-Up invoices before sending and adjust to achieve target.
04
TEMPLATES SAVE TIME AND STOP MISTAKES
Pricing templates save you having to price each job from scratch. The hours saved on each job priced means you (or your pricing person) can spend time working on other tasks or areas of your business.
Once your templates are completed you’ll be able to price most jobs within 10 to 15 minutes. Add the quantities or measurements into your template, check your Gross Profit Margins, and then the job will be priced. Check out more price templating tips on the next page.
01
Use existing jobs as a starting point for the estimated quantities (material required and labor take-off).
02
Use Job Management Software to store your pricing templates so they can be converted into purchase orders quickly and you can back cost against the price.
03
Ensure the price book from your suppliers is up-to-date so that you don’t get surprises when your merchant invoices arrive.
04
Back cost all jobs so you can tweak your pricing templates and ensure they are constantly improving.
05
Build cost modules, pre-built or measurement rates for larger jobs that include labor and material. E.g. Toilets, extractor system, drainage etc.
06
Create set prices for servicing and smaller jobs. E.g. Tap washers, power points, extractor fans, water filters, lights, heat pumps etc.
05
GET COMFORTABLE ASKING FOR MONEY
Do you find yourself feeling “bad” or thinking “they’ll never pay that” or getting upset when customers say “no” to your prices? To achieve the right margins, the margins you deserve to be paid, you have to be comfortable asking for money.
Your business requires you to generate good margins so you can pay your team well, invest in good equipment, technology and vehicles, and most importantly make a healthy profit. Your profit is the reward you get for taking the risk of being in business. Aim to be the best and most expensive. Not the cheapest. Everyone loses a race to the bottom!
01
You have a skillset and experience built over many years. You have tools and equipment your customers don’t. Your customers couldn’t do your job even if they wanted to, they’re paying for your time and the peace of mind that the finished product is reliable. That is valuable.
02
You’re in business to make a profit. Otherwise why take all the risk and deal with the stress? Profit allows you to hire better team members, buy better equipment, and therefore provide a better service for your customers. Charge for the service you want to provide.
03
When you do something time and time again you subconsciously devalue it. Jobs you’ve done thousands of times won’t seem valuable to you leading you to think you need to charge a lower price. Your customers haven’t done the jobs thousands of times, it’s valuable to them.
In this session, we will do 3 things:
- Figure out where you want to go in your business.
- Identify what are the roadblocks that are stopping you from getting there.
- Build you a 6-week, step-by-step plan for how to overcome those roadblocks.
If you want to claim a session, you must be a Plumbing, Electrical or similar business owner doing over $35,000 in monthly revenue.
To claim one of these sessions, click the link below, fill out a qualification form and book a phone call with us. We will use that call to make sure the session is right for you.