TCF469: Contractor Q&A: Best one-line advice for a brand new starter

Listen in as Tom and Dan answer your questions about how to price a job, how to decide when to hire your first employee, what percent should you make when it comes to marking up subs, why do clients prefer free estimates instead of professional charge quotes, even if the contractor is a registered member of a professional body and the best one-line advice for a brand new starter.

 

In this episode, we talk about…   

Question 1: I'm running an electrical company in Australia, and the material prices have skyrocketed. Is it better to charge by the hour or by the job? 

• The most successful contractors have a minimum service call.
• Inflation is not your problem—it's the customer's problem—charge what you need to charge to do the job.
• Make 60-70% of your gross labor profit.
• Have $100 per project sundries fees and hand the rest of the sundries receipts to the customer. 
• The materials are not your problem as contractors—the customers are the ones that have to pay for it. 

 

Question 2: How do you gauge when to hire your first employee? 

• Figure out your own pricing and start making the profit that you need to make
• Market your brand and learn how to sell
• Build relationships with other contractors 
• Get your money before you bring on employees
• Sub everything out that you need to 
• Set a goal for yourself to put $1,000 a day in your pocket

 

Question 3: I need help working on a minimum call-out and price a job. It's very risky to replace a water meter in a building—it won't take much time, but there's a high risk

• The price is the solution, not the time charge—charge what it's worth
• This is about salesmanship, having a conversation, and setting expectations

 

Question 4: When it comes to marking up subs, like a deck or a pavilion, what percent do you recommend? 

• 100%—if subs charge me five, I charge 10 for the job
• Let them price the job in a healthy margin—be happy, show up on time and then double it
• Great marketing and salesmanship makes this easy.

 

Question 5: What habits have you developed to overcome your limiting beliefs?

• Objectively analyze yourself regularly- Dan
• My affirmations are based on the kind of person I want to be in the future, and then develop the habits and actions that will make me more like him, and then your confidence grows- Tom.
• Surround yourself with FWS and people that think the same way

 

Question 6: Why do clients prefer free estimates instead of professional charge quotes, even if we're registered members of a professional body?

• Contractors have trained consumers to get free estimates.
• Clients prefer it because it's free.
• When you learn to sell and connect with their motives, position yourself and dig into the emotions of the thing, then they're happy to pay a consultation fee.

 

Question 7: Give one of the best one-line advice for a brand new starter.

• Do something that's going to set you up where you need to be and set yourself up to win- Dan.
• Be passionate about building your brand and marketing your business every single day—build that habit early on, because you will not make any money and you won't sell jobs without opportunities- Tom

 

Resources: 

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