How to Raise Your Markup: The Short 7 Step No BS Answer
OK, I’m sick and tired of the foo-foo fluffy BS answers some magazines and bloggers put out there to answer how contractors can raise their markup. All the BS answers I see offered by others never call these contractors out on their ignorance. Without knowing what markup they actually need to use how would a contractor who is “slowly raising” his markup know when he has finally hit the right markup? It drives me crazy! If you are ready for the no BS answers read on…
I have observed that the most common reason contractors can’t or won’t raise their markups is because they have no idea what markup they actually need to use. Yes, the hard truth is they are ignorant to how profits are built into their pricing and how to determine what markup they actually need to use. Due to their ignorance they have to guess and therefore completely lack any confidence in the prices they quote to consumers.
OK, no more BS.
If you want to make a predictable profit as a contractor here is the short and sweet no-BS plan.
- Recognize you have no clue what to charge to be profitable and make a commitment to stop using the WAG Method (Wild Ass Guess)
- Learn how the financial game works so you will know what needs to be considered and how to figure out what to charge. If you have never been able to do this on your own, consider the definition of insanity and take a different route.
- Do the work and due diligence required to calculate the markup you need to use to be profitable, to live the life style you deserve, and to be able to retire some day (before your body gives out or you die). Knowing this number will be business and life changing.
- Accurately estimate your direct costs to build projects and then use the markup you calculated to establish the profitable price you need to sell at.
- Tell prospects your price and stick to it with confidence.
- If you don’t know how to sell, other than by dropping your price, get real sales training. Remember, profits are earned during the sales process and protected during production. If you are trying to make money in production it’s probably because you’re not a business manager, you’re a carpenter.
- If the people in your current market won’t pay what it takes for you to run a real business find a new market to work in.
Done! No more BS.
She took control of the bull. But, will you do it?
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