The Cost Of Doing Business

shoemaker

I'm curious if anyone else has had to or is considering a higher than normal increase or increases in general to their pricing because of the steady cost increase of doing business.

Last week my cost of coil stock increased 8% and added to that the increase in lumber cost,gas and related increases I've decided to add 10% to my overall contract charge.
Last increase I put up was 5%,8 years ago.

I've tried to pay my guys more to help offset their costs,but my bottom line has suffered for too long and though I hate to do it,it has become a necessary evil.

genecarp

pass it on

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knothole

I always believe "You do what you have to do" to make it.

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Follower of Jesus Christ

AllAmerican

Mark up as necessary and don't apologize for it.

You are paying more for everything and you have to pay your people more so they can continue to eat and live indoors. You may lose some customers to the bottom feeders. Usually those are customers you do not want anyway.

DavidC

We constantly update our materils pricing and deliver quotes based on current information. Lately we have begun enforcing the time limit by requoting with current pricing after thirty days if they decide to hire us at a later date.

We also have started to include fuel charges for each job.

You do need to pass on the cost of doing business to your customers if you expect to have any for long.

Good Luck
Dave

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www.CookContractingLLC.com

Jason Whipple

After doing my taxes this year and seeing "the big picture", I raised our prices over 30%. I'm also keeping close watch on material prices. I call the lumber yard for the latest prices almost every other week or as needed.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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marc

We adjust our prices probably 10 times per year.

If materials go up 5% we go up 5%

Why should we obsorb a price increase?
You must remember that the customers pay for materials, labor, admin, marketing, etc. WE DON'T

We just handle the money.

We do everything in our power to keep the overhead down but it's still way up there. (41.1%) this number does include owners salaries but it's still very high.
We have already spent over $11K for gas this year.

We need to make a minimum of 50% gross profit to be healthy.
42% just to survive this down time.

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Marc

SelfContract

Let's see how high up more the sky limit can be.

Jason Whipple

Is this cost something you show the customer or is it just figured in and not broken out for them to see?

I'm seeing this on more and more quotes from Sub's, but I'm just not sure if I would feel comfortable showing this as a line item yet. Maybe it's something I need to get used to.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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DavidC

Our added fuel cost is included in the bottom line cost. We only show that one figure to the customer, along with a very detailed job description. We don't line item anything for the customer to see.

I have no problem talking to the customer in very general terms about the rising cost of gas, materials, insurance, etc. They all seem to understand and it actually helps to cast doubt on the low bidder, as in what did he forget and will they try to add in suprise change orders to recoup later.

I will usually follow up with - I don't see any increase in labor rates in the forseeable future. With that I'm hoping to illustrate that these other things are out of my control.

Good Luck
Dave

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www.CookContractingLLC.com