Are You Charging Enough In Your Trade Business
April 20, 2015
Let me say that you are not alone in thinking this way.
The amount of times I speak with tradies around Australia and they really don’t know if they are charging enough or not. The same old question comes up; ‘What are you charging?’. The tip is: What are you charging to make money?
There are so many guys out there that are working really really hard and just don’t seem to be getting any where. I’ve spoken to plenty of tradies wives who say ‘My husband John works six days a week and we seem to make a mediocre wage’. Why is that?
Why do we tradies work so hard for sometimes little reward?
There are some guys that keep going from step to step and growing their business and some guys that can’t even get off first base.
So, what about YOU? Are you a guy who is a one-man show that struggles and doesn’t make any money? Or are you a striving business with four trucks, ten trucks on the road and doing extremely well?
In speaking with some of the tradies that joined our program, Lifestyle Tradie, when we first spoke about what they were charging, I was absolutely blown-away and I could understand in five seconds flat why they were not making any money.
If you are a husband and wife team and you’re charging around that $50 dollar mark and you’ve still got running of your vehicles and expenses like petrol, that was the value a lot of the guys were charging about ten years ago…some guys are still sticking down that path.
Now I know different trade businesses have different pricing structures. You can get painters for as little as $35, and builders for around $65 or lower, and some plumbers are $100, $150 or even more. So what is the right price for YOU in your industry?
Every year we do a competitor analysis. Now I’m not talking about doing quotes or flat rate. It’s a do-and-charge rate. Do you work do-and-charge and what do you charge?
The competitor analysis gives us a really good understanding about what the market is doing, and gives us the opportunity to understand if we are middle range, low range or high range in our industry?
Then we can compare a great deal of other things like service and what you offer the customer. So, I’m not here to tell you if you’re charging enough. That comes down to you. All I can say is that I’ve turned countless number of businesses around simply by reviewing their rates and increasing them overnight by as little as $10 a job.
Here’s the thing: say you’re doing just 5 jobs in a day, with an extra $10 a job, that’s an extra $50 a day. $250 a week. Calculate that to 52 weeks of the year equals $13,000. That’s pure profit into your business.
As you can see, you don’t have to adjust too much to make a lot more money. So what are you charging?
I challenge all you to look at your rates, to look at your competitors rates and see if you are low, medium or high within the industry standard.
There are some guys out there that like to undercut the market and they think they are quite clever at getting more customers. That only works to a point.
You need to find a business that is sustainable for the long term, and what I’ve seen in over all the years of doing business, that the guys that are offering a good service at a premium rate are the guys that seem to have the money to market. They seem to have the money to buy new trucks, go on holidays and build a better business.
Something to think about. Are you Charging Enough in Your Trade Business?
- Join our Kick-Ass Tradies Facebook Group, for access to trade business specific conversations, tips and resources, plus a like-minded community of tradies.
- Book a 15-minute Game Plan Call with Andy, owner of Dr. DRiP plumbing and co-founder of Lifestyle Tradie, to clarify your priorities and get clear action steps.