Construction is a tough industry. It isn’t for the faint of heart.
For some, the hardest part is making the sale. They can build anything, leap tall buildings, stop speeding bullets with their teeth. But when it comes to sales, they’re out of their comfort zone. They don’t want to talk about money or ask for the sale.
If that’s you, you need to recognize your discomfort and fight through it.
When you’re selling, it’s your job to find out what your potential client wants, when they want it, what their criteria is for picking their contractor, and what their budget is. If it’s a smaller project that doesn’t require plans, you need to estimate the cost. If it’s a larger project that hasn’t been designed, you need to ask for a design agreement so you can design the job within the budget.
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Once you’ve estimated the cost, you’ll apply your markup, write up an agreement, and ask the client to sign so you can proceed.
This is where it gets difficult. All too often, this is when you start questioning yourself. Is the estimate correct? Am I pricing myself out of this job? If my price is too high, what will they think when I quote the price? Should I throw in a freebie to appease them? When they sign our contract, will they think I’m hounding them when I ask for money? What if they accuse me of asking for money because I need it, not because they owe it?
If or when these questions pop into your head, remember:
- You aren’t in business to be anyone’s friend.
- Your markup isn’t a guess or a hope. It reflects your actual overhead and profit needs.
- You aren’t in business to help your clients save money or help them get the lowest possible price for their project.
- You aren’t in business to employ others, even family or friends.
- Business isn’t about you and your comfort level.
- Business is about making money and providing for yourself and your family.
- You are in business to provide a service, and make a profit doing it.
Let me repeat that last one: You’re in business to provide a service and make a profit doing it.
You’re earning your salary and the profit generated by your company. Business is a risk, and you’re the one taking that risk, not your clients and not your employees. You’ve spent years disciplining yourself to do the hard work. You’ve studied and learned, working to make your business succeed for yourself, your family, your employees, your subs and your suppliers. You know that “if it is going to be, it is up to me.”
Your effort to make things happen and get things done should be rewarded. So why question your worth? Don’t deny yourself a paycheck, and don’t deny your business the cushion of a profit when things get tough.
When someone asks for a bid on a job, explain to them that you don’t bid on jobs. You’ll give them a firm price quotation after you’ve established a time frame and budget for their project. If they aren’t willing to give you a time frame and/or a budget, they aren’t serious about hiring you.
Your client knows that if they want work done, they have to pay for it. Trying to get the lowest or cheapest price is a game to them. Don’t play it.
You have something they need: the knowledge, skills and determination to get their project built. Never, ever be ashamed of your knowledge or your price. If you estimated the job cost and applied the markup that covers your overhead and profit needs, your price is right and it’s fair. Get comfortable asking for money. It’s why you’re in business.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.