PLUMBING
PLUMBING BUSINESS How much? Are you crazy?
BY RICHARD DI TOMA CONTRIBUTING WRITER
a price to make a repair or perform an installation and he blurts out in a sarcastic manner, “How much? Are you crazy?” You reiterate your price apprehensively, because he has
M 76
accomplished the first part of his negotiating tactics. He made you feel uneasy about your price. Then he throws his second punch by saying, “That part can’t cost more than $50!” I’m sure you have heard this more than once. What do
you do? You obviously have a price buyer rather than a value buyer on your hands. He doesn’t know or care about the cost you incur to serve his need. He only wants to get the best job, but at the lowest price, as he sees it.
Matters to consider Setting aside not-for-profit and non-profit entities,
there is only one reason that business exists. That is, to earn a profit. You have a financial responsibility to your company, family, employees, creditors and clientele to do the best job while you recover your cost and maximize your profit so you can continue to afford to deliver excellence to consumers. Doing “the best job” for the consumer requires you to
first address the consumers’ needs and questions in an honest, logical and intelligent manner. Then you must perform the task excellently. But it doesn’t end there! You must also have the financial strength to stand behind your workmanship after the job is done. To do the best job and earn the reward you deserve for
the delivery of excellence to consumers, it is imperative that you know your true cost of operation and your value to society. Sadly, most contractors don’t! That’s the root cause of all contractor problems. Without knowing your true cost you cannot possibly know if you are selling your services at, below or above your true cost. Even if you think you are pricing properly, you cannot be positive that you are correct. Since most contractors don’t know their true cost of
operation, it stands to reason that business pricing procedures in our noble industry are flawed. On average, through the 20+ years I have been coaching contractors on business procedures, I have observed that many contractors shortchange themselves by ay least $50,000 per tech annually. Over the years that adds up to a mountain of money not earned. Contractors who shortchange themselves and sell their
services below their true cost cannot possibly deliver the best job to their clientele. Their lowest price forces them to cut corners. In turn, they cannot afford to perform the best job the consumer was seeking in the first place. It also means that those contractors are moving money rather than making money. Therefore, there is no true profit.
r. Jones calls you to his home or business to address his plumbing, heating or cooling need. You arrive and assess the situation. You give him
Simply put, they won’t have the financial ability, motive or desire to do the best job. Everyone loses. Ignorant contractors who turn their ignorance into
stupidity by quoting prices without being certain of their true cost are a disgrace to and a blight on our noble industry. They are the problem. The foundation of all your prices should always be the true cost you incur in serving your clientele. Since you are entitled to make a profit and since you want to be part of the solution, you must be certain of your true cost and your value to society before establishing any selling price.
How to address Mr. Jones Fair is a two way street. Since consumers are doing the
consuming, they are responsible for paying for your costs as they pertain to their request. They are also responsible to pay the profit you are entitled to for the delivery of excellence to them. First, it’s your responsibility to quote prices that are truly profitable. Then it’s your duty to deliver excellence to consumers. When Mr. Jones harshly asked, “How much? Are you
crazy?” he was attempting to show you that he knows more than you know about your business. If you understand the aforementioned matters to consider, you will know how to address Mr. Jones’s manipulative manner. The “How much?” and “Are you
crazy?” questions can easily be dealt with by explaining that your prices are arrived at by factoring your costs for each task as they pertain to that task. Smart consumers will understand. Silly, ignorant and inconsiderate consumers who don’t want to pay for the costs they incur aren’t worth being your client.
To do the best job and earn the reward you deserve for the delivery of excellence to consumers, it is imperative that you know your true cost of operation and your value to society.
e Turn to DI TOMA on p 78
phc october 2011
www.phcnews.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88