Already on ArticleSlash?

Forgot your password? Sign Up

Contractor Marketing and Profit Margins - For Contractors Only


Visitors: 327

The majority of most small businesses are specialty contractors. The top ten percent of these businesses make over 50k per year. In other words, most of these contractors are making less than 50k per year.

Top Mistake - Pricing Too Low

Many new contractors make the mistake of charging too low. They base their costs on what other people charge and reason if they are a little bit cheaper it won't hurt much and they'll get a lot of business. There are a lot of problems with this reasoning.

At Fair Market - Everybody Is Broke

I worked for a large electrical company. They would bid jobs to break even. They would look to barely cover their costs. Then, they would have people look for reasons for change orders. On the change orders, the cost would be bid much higher. No competing company can come in for such a small change. All the changes add up to enough money to keep the company going.

The only way a contractor can make money is to charge above average rates or come up with “change orders". The best way to do business is to be up front and honest. Most of all, know how to avoid bad customers; and that means most of them. It's the minority of customers who know that quality comes with a price. Try to work exclusively off referrals from the “right" areas.

People Don't Appreciate Low Prices

No matter what you charge, people think it's an arm and a leg. New contractors do a lot of favors and freebies to customers to earn good will. However, customers view it as their right because they are paying so much. Truth be told is that most of these contractors are close to broke. So, don't make the mistake of thinking people appreciate freebies.

Customers Want High Priced Goods

Charge the most and people will think you're the best. Instantly, everyone will want you to do their work. They will question your work a lot less because you must obviously know what you are doing at that high price. You also have a huge benefit of weeding out all the penny pinchers. You will only be left with customers that understand price isn't everything.

For further landscape information, please visit Outdoor Shower


Article Source:

Rate this Article: 
NJ Home Improvement Contractor- Finding A Remodeling Contractor
Rated 4 / 5
based on 5 votes

Related Articles:

What to Give Your Employees to Boost Sales and Profit Margins

by: Peter Geisheker (June 05, 2008) 
(Business/Sales Training)

20 Easy Ways to Improve Retail Profit Margins

by: Lynn Switanowski (May 13, 2007) 

Buy Effective Custom Ecommerce Software to Increase Your Profit Margins

by: Steve John (November 17, 2011) 
(Internet and Businesses Online/Ecommerce)

Can a Salesperson Increase Overall Sales and Gross Profit Margins at the Same ..

by: Will Fultz (July 09, 2008) 

Virtual Numbers Leads To Hike In Business Turnovers and Profit Margins

by: Ayan Biswas (November 29, 2012) 

Accounting Business Outsource Process See Your Profit Margins Increase in ..

by: Michelle Barkley (June 24, 2008) 

Selecting A Contractor Tips By A Bergen County Contractors

by: David Pangione (April 05, 2013) 
(Home Improvement/Remodeling)


by: David Pangione (April 27, 2012) 
(Home Improvement/Remodeling)

Materials, Labor and Profit Figure Into Contractor Costs

by: Robert J. Carlton (July 22, 2008) 
(Home Improvement/DIY)

NJ Home Improvement Contractor- Finding A Remodeling Contractor

by: David Pangione (January 16, 2012) 
(Home Improvement/Remodeling)