I received a note recently from a woman asking if I’d be willing to speak to her husband. They were having a problem paying their bills and she was extremely frustrated. I asked her to call.
The first thing she said was, “You should start a support group for wives of contractors.”
She’s been married for years to a man she loves. He’s built all types of projects and based on the photos I saw, he builds them well. Architects and designers refer jobs to him all the time, and he has a great reputation. He is liked by everyone and always gives more than the contract calls for.
He’s also a really nice guy. He’s constantly told by clients and architects that his “bids” are too high, so he adjusts his price accordingly. They aren’t making any money, and now she’s looking for a job so they can pay their bills.
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This is a recipe for disaster, both professionally and personally. It’s not bad for your spouse to have an outside job; it’s bad when they need an outside job to pay the bills. They are carrying the load so you can work for yourself. That’s not how a partnership is supposed to work.
Here are some reality checks:
If you’re busy working but you can’t pay all of your bills, you’re almost certainly not charging enough for the work or service you are doing.
If your spouse has to have an outside job to pay the household bills, or if they choose to work outside but their income is the only one contributing to the household, you’re almost certainly not charging enough for the work or service you are doing.
If you’re busy working but you have credit card debt that can’t be paid in full each month, you’re almost certainly not charging enough for the work or service you are doing.
If you’re busy working but your business can’t afford a decent vehicle for you, or if you’re forced to have your office in your home because you can’t afford an outside office, you’re almost certainly not charging enough for the work or service you are doing. (There’s nothing wrong with having a home office as long as it’s by choice.)
If you’re doing your own books to save money, building your own website to save money, and wearing all the hats in your business to save money (sales, job supervision, company owner and carpenter), you’re almost certainly not charging enough for the work or service you are doing.
If you’re busy giving out bids instead of getting a commitment from a customer before you do any estimating, you’re wasting time. You’re also selling on price, which is why you’re almost certainly not charging enough for the work or service you are doing.
It’s important, if you find yourself in this kind of hole, to stop digging before it gets deeper. Step out by learning how to price your jobs properly. Learn to sell your value, not your price, and that requires polishing (or developing) your sales skills. If you can’t sell, hire a salesperson.
Every class I remind attendees that being in business isn’t about making friends. If you want a friend, go buy a dog. You’re in business to provide a service and make a profit doing it.
When everyone but your family benefits from your business, you’re doing it wrong. Give us a call if you want help.
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.