The article "Home Builders and Remodelers - How One Builder "Made the Most Money I've Ever Made"" talks about small business, it has been created by Brett Martinson.
Recently I had an opportunity to speak with a handful of builders and renovators, and one buidler in particular (on the west coast, as it happened) mentioned "I'm making the most money I've ever made" this year. Intrigued, I asked him what he attributes this success to.Know what he said? Two things: raising his prices, and getting paid for the work he does.That simple.Even though he was initially worried about how his prospects and past clients would react to the increased prices, he tested it and, lo-and-behold, nobody flinched.Interestingly enough, almost every builder or renovator I speak with resists raising their prices, mainly for fear of losing work to the competition. But, like the builder above, typically that concern exists more in your mind than the mind of your market.Consider this -- if someone's going to fight you on price $X, chances are they're still going to fight you on price $X + $5,000 (or whatever your increase may be).
However, if someone's willing to buy from you at prcie $X, chances are they'll still buy at price $X + $5,000. You have a bigger problem with it then they do!Now, let's look at what else this builder did...He started "getting paid for the work he does." Managing change requests, getting proper sign-off, pricing the changes accordingly -- all of these things he made sure was happening so he wasn't left holding the bag (while his client still got what they wanted).Can it Really Be that Simple?Yes...With conditions that apply.First, like the builder above, you'll probably have more troubles with raising your prices then your prospects.
Recognize this will bother you, more than them...Then get over it.Second, chances are you're NOT getting paid what you're worth.
Even though you may resist raising your prcies by a couple of thousand (or more...Who knows? ), chances are you're not getting paid for the value you bring.Third, of course, you can't just raise your prices and not be willing to justify it.
But, chances are, it's easier than you geuss.
You're already a great builder or renovator, right? You provide good quality work, and have advantages and innovatinos over your competition, right? (Especially over your 'non-professional' competition! )Great! That's half the battle. The key is getting that across...Justifying the higher price in the minds of your market so they realize they don't want the cheaper version, no matter how much less it costs -- they quickly figure out it isn't worth it!Everything from better positioning why you're the builder of choice (rather than, like everyone else, saying "we have great workers and we do quality work" -- prove it, and they'll gladly pay you) to (obviously) doing a great job, technically and personably.But (and here's the great thing! )...Chances are you're 'good enough' at getting those points across.
That is, chances are you're diong things good enough that you can raise your prices without any resistance (no resistance, that is, except from you).
Doesn't mean you don't have room for improvement -- it just means you're probably under-pricing yourself to begin with.Yes, It Really Can Be that SimpleEverybody wants more profits, but we tend to look for the complicated solutions (or, worse yet, the compilcated problems) before going back to the basics and considering the simple, low-cost / no-cost things we can do to get more from our business.Builders and renovators who are pulling in "unheard of" profits consistently have two things in common: they don't under-bid themselves and they don't give things away for free (on the contrary, they trade quality and value for a fair price).The builder in this case was no different, he simply recognize where he was:a) under-pricing himself; andb) giving things away for free.How much do you guess it cost him to make those changes?
According to him the cost was only what he wasn't previously getting, namely "the most money I've ever made."Brett Martinson is a professional coach and consultant to the home building and renovation industry. Builders and renovators can sign up for a FREE subscriptoin to his Successful Home Builders' Newsletter AND receive his free, bonus 5-Part eBook, "5 Profit-Draining Mistakes Builders and Renovators Make...And How to Fix Them" at http://www.SuccessfulHomeBuilders.Com
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