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dirt diggler

These numbers are all hypothetical for this example


I have am looking at $200,000 in overhead this year

(includes salaries, insurance, marketing, tax set-asides, etc.)



If my projects yield 20K in gross profit (after project costs) I can do 10 projects

If my projects yield 10K in gross profit - I can do 20 projects



Both scenarios make it in the end.

The first - you'll work less, for more money - but you're on the high end and may not land enough jobs


The second - you'll work more, for less money - but you're on the low end and will land enough jobs




How would this affect your pricing? and why?

Stone Mountain

Trouble is the bigger jobs generally have lower margins and higher aggravation factors.
This past year I did several $25-30,000 decks. Four $7500 decks are easier to do and have (in general) a lower stress factor and higher margin then the one $30,000 deck.
The $30,000 deck had LOTs of detail, several visits to the site, inumnerable conversations with the client, a fair bit of downtime for the crew, sluggish cash flow; well, you get the picture.
With an under $10,000 deck, your'e almost ...in'an'out, takes a week, you get your deposit, get paid on complettion, pay the crew, move on. It's simpler, takes less concentration, the homeowner is less picky, (also usually more thrilled when it's done), I generally don't have to visit the site, and the sale is quicker and takes much less effort.
And don't you beleive you'll make a higher margin on a bigger job. The homeowner pushed more, you have more room to move, you can absorb more mistakes, you get asked for way more extras, you are on site longer, giving the homeowner more time to think up complaints or changes.

I've found that the only thing big jobs are good for is the ego and your web-site.


Getting back to your original question: a nice mix or small, medium and large jobs would be best.

Steve

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Residential Deck Specialist: Vist our Website
www.fenceanddeck.ca

realpurty2

First thing I'd do is be finding a way to lower my overhead.

I like to err on the side of caution as they say. I'd rather the company be busy year round at reasonable rates than to charge more and have downtime. It seems like less of a gamble to sell more jobs at modest prices than to risk not getting enough jobs to pay the overhead.

I'm sure others will disagree but that's just my two cents.

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Woman in a Man's World.

Brian

I would rather work less for more money-- that is being efficient.

The key is developing systems and focusing on the right market so this can happen.

I don't aim for the high end or the low end. The high end market is too small, and the low end market won't pay. I aim for the middle, which is a much larger market. I then develop the systems, marketing, and pricing to reach this market.

Brian Phillips

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Houston Interior Painting
Houston Exterior Painting
Houston Painting Contractor

dirt diggler

there ya go


btw guys -- READ - NUMBERS ARE HYPOTHETICAL. lol - sorry i should have made that more clear


(they aren't my numbers -- im not putting my real ones up, obviously)

ruskent

Personally would rather do a couple large jobs, instead of a ton of smaller ones. However, for me, a large job is normally has a ton of smaller jobs put together.

Honestly, i love not having to move tools or equipment for a month or two.

Also, i have much more satisfaction doing a large job compared to a small one. I just got back from looking at a job earlier today. Should easily be six figures when everything is all said and done. But its really just alot of smaller things put together.

Now will make make more money on a larger job then a smaller one? Not neccesarily. However, my equipment mobilization cost goes way down. Delivery cost go down.

However, on larger jobs you have to stay fast moving and not slow down. I think my pace went down alittle bit on my first big job.

dirt diggler

Guys


it's my fault - i can't get my thoughts on here well enough with this


you are looking at a $200,000 overhead


you WILL pay this before the the year is over


now ... you WILL have to earn $200,000



how does this affect your pricing? your sales, etc.

how does this affect your planning the year out???


OR -- is it not worth thinking about??

dirt diggler

Readers - go to revised thread

ultimatetouch

I agree with this to a point but why shouldnt we be able to make money on any job big or small. Charge more for the aggravating ones. The way I look at it is we will make it worth it for us to do it, maybe my next job like the one that aggrevated me will be 20% hirer to make it worth it but it will be worth it $$$$$$$$$$$$.

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Ultimatetouch
Illinois Remodeling Company, Kitchen Remodeling Chicago, Room Additions Illinois