Friday, May 13, 2016

Estimating Expenses

Anything you do in your contractor or plumbing business that requires your time, you should be getting paid for it.  As I have mentioned in other blogs, I can’t tell you how many times I have gone out to give estimates and never charged people for gas or my time, because I thought I shouldn’t be charging them.  I’m here to tell you that is wrong.  You should have a profit, overhead, and business operating expenses in your jobs to allow for these activities.

Look at everything you do that you are not getting paid for and determine a percentage to make up for that, then add each percentage to each job that you do. When you go out to give a free estimate, it’s not free, you are just giving the illusion that it is free, but if they actually hire you – you will be charging them. Essentially you will need to get money from the people you are doing work for, to pay for the expenses for the jobs that you do not receive.

A lot of times contractors and plumbers put in a percentage. I charge 15 percent for operating overhead, and my profit was normally 10 percent.  So that’s 25 percent that I added onto a job, but I also did the research and knew this is what was needed. A lot of people are not going to be happy paying that. If that is the case you are going to need to get creative and divide that money up into other parts of the project.   The main thing is to get the money to make sure that you stay in business.

You have got to have the money to advertise, to pay for the gas it will cost to get you to your jobs, your papers to write on, and computers in your office.  Without this stuff you are not going to be able to run your contracting or plumbing business as effectively as you think you can. Figure out your number and implement it.

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