Thursday, April 14, 2011

Stop Doing This or Go Broke!

This is serious ...

As a friend, and hopefully your mentor, I hope you're not doing this.

I know times are hard, jobs are difficult to get and few and far in between.

But ...

Dropping your price to get the work, isn't worth it!

Let me explain.

I've been overwhelmed by contractors coming to me in desperate situations. What I'm seeing is desperation, pure and simple.

Understand this ...

Bad decisions will cost you money, cost you time and eat into your profits. In the worst case, one bad decision can totally kill off your business. That means, taking work for nothing is a losing proposition!

If you want to lose money, stay home and watch Opray, you'll lose less money!

Every single contractor who has come to me, when I look at their financial, has taken work below costs and ... volume doesn't make it up. It just makes it worse!

When you are in some kind of pain – physical or emotional or financial— any kind of discomfort – you tend to act on things you believe will alleviate that pain. And your belief that something will help grows stronger the longer the pain goes on. After a while, anything with a remote chance can look like a winner. Wishful thinking starts to seem quite grounded, and grasping at straws feels like anything but.

In other words, you make BAD decisions!

It’s to decide in favor of something we think will bring gains today or tomorrow than for a strategy which may take weeks, months, or longer, to materialize. This means a fortune-changing strategy, which will help us, can get sacrificed to something mediocre we think will help us with a short-term remedy.

So, why did they do it? Grasp for straws? Settle for failure?

Here is what I found.

• They didn't know their numbers.
• They didn't have a strategy.
• They didn't market.

They short-changed their chances for success, because they didn't know. In other words, they allowed themselves, through desperation, to become the victim.

Listen, the economy is tough, and it will be tough for a long time. As a matter of fact, it will never go back to the way it was. That is a thing of the past. You need to adapt.

How you can get started.

1. Take the time and calculate your markup. Even better, calculate three. A low one which I like to call my last chance or worst case. The one you think is right and an optimistic one. Then calculate the results of each one if they were used. Which result do you like? Run with that one. If someone wants you to do it for less, walk away.

2. Develop a strategy. You know times are tough, how will you compete? What will you do? Lay out a plan and work the plan.

3. Learn how to market your construction services. Get your business out in front of your prospective customers. Don't wait for them to come to you.

Every contractor whom I am working with who is doing the above with me is getting work and making money. It's not easy and there is not a ton of it out there, but they are getting their share. Taking work for nothing, leaving money on the table just to get a job with high hopes, is a poor strategy.

I hope this will help some of you to start making a better decision on getting your work at the right price.

No comments:

Post a Comment