Mark Up and Profit or How to Sell at Prices Higher Than our Competition
Mark Up and Profit or How to Sell at Prices Higher Than our Competition
You might think that there is a single thing that will help a small painting business to make money. You keep saying to yourself, If Joe Blow would only work harder and smarter, or if you lived in a different area, or this and that or some other lame excuse or reason why you don’t make any money. Maybe the brainstorm occurs and you think that if you buy your paint cheaper you will make money on your jobs.
Why do all of our jobs end up in a scramble to finish before another hours wage is subtracted from your own pay? Why does it seem so unfair when the owner asks for a little thing to be done when you practically gave the job away? Mostly, why do all of your jobs end up with peanuts left over for you?
One simple answer will make all of these problems go away. This one thing will make the jobs fun again. Hey! Mr and Mrs. Homeowner ask you to move their wicker furniture outside on the porch for the summer, no problem. All of a sudden you want to do the absolute best job for your clients. Now you realize that instead of being the cheapest painter, you become known as the painting company with the highest quality.
Here is the answer. No other single thing will do it. Charge enough money to make a good living, and still do the same job. Oh sure you say, I can’t raise my prices because the going rate is…….this or that. Or people want the cheapest job. Wrong and wrong again. We are almost always the highest bidder. And you know what else? I get freaked out if find out that I am the lowest bidder; because I must have missed something on my estimate. There are times when I am low or in the middle; because, there are a few painters around who have a rep of being high priced. You know, they are the ones that you can’t believe that they do any business, or have fantastic connections. Know what? Nonsense!
One half of the 800,000 businesses that start up this year will be gone next year. Why? Do you think it’s because they are making too much money? Why do painting companies have bad reputations? Is it because they do quality work? Why are the oldest companies the one that are known for being “High Priced”?
Ok you say. For just a minute you believe me; but, then you say, people want a cheap job. That is purely not true. What do you want when you buy a brush? Most painters buy quality brushes because they last longer, do a better job and in the end will cost less because you will buy 2 or 3 cheap brushes for the price of one good one. Do you buy the cheapest food? Did you ever skimp and buy a cheap tool like a cheap broom or mop or something and have it fall apart in your hands?
A guy called me up last summer (June) and sounded like he was going to cry. I asked him what he wanted; he said he needed a painter. I told him we could do anything until September because we were booked solid. I was still intrigues because of his voice being so upset, so I said I would try and refer him to a good painter or whatever I could do. Asking him to tell me his story was a real treat, not for his pain; but, to prove this point. He told me he had a referral of this painter from his brother-in-law, and that he got 4 bids and this guy was lowest. The prices were the cheap referral 00, next 00. Then 00 and 00, and there was one at 000(maybe he gave this to blow the guy off or whatever, obviously he didn’t need the job that badly) so what I said, what happened to make you so upset? He said the low-baller started painting his condo, and right off the bat he was making the guy upset. The owner was a commuter to a job that made him leave early and come home late. The first thing this painter did that upset him was that he smoked in the guys house, (the owner was not a smoker), the second thing to upset him was they painter was paining his bedroom ceiling by walking on the guys bed with his shoes on and no drop. The 3rd thing that really grossed him out was that the painter would use the toilet and not flush, and it wasn’t just pee. Finally, the guy gave him the 2nd installment of the job, and the guy never came back. He was the cheapest price, so I ask you, how many of your customers would want this kind of a job?
Price is not the biggest factor. Most people would say quality is. But, if you think of the things this owner mentioned, never once did he say the quality was bad; but, I will bet it did. He was upset because the painter was blatantly disrespecting him. People buy because of a lot of things; but, mostly buy on emotion. They buy because they “feel” that all things are right. Then probably quality, if the customer perceives that everything is equal then they will buy on price. And it is that ignorance of theirs that causes the trouble. The sad thing is that painters continuously play this game with them. When the job is over and it has been an absolutely horrifying experience. The owner will cry to all who will hear that all contractors are bad, failing to understand that he created the mess himself, by buying a painting job based on price alone.
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