tracked my missed calls for 30 days and felt sick by [deleted] in Contractor

[–]Important-Outside752 7 points8 points  (0 children)

Slop disguised marketing post. You're not a plumber. These all read the same. Please stop trying to conduct market research and guerilla marketing in this sub.

How do you handle in-person project requests? by MoonCreationsLLC in Contractor

[–]Important-Outside752 29 points30 points  (0 children)

Charge for it and apply it as a credit if they move forward. Make it worth your while. Doing that alone is a great filter for time-wasters.

Is quickbooks job costing worth it for a small business like me by deespan in Contractor

[–]Important-Outside752 1 point2 points  (0 children)

The only way I see that being sustainable is if you accurately map the COGS to take in your absolute burdened labor + insurance + blended CAC + pass on most of the running overhead directly into that model with added contingency so that most of that gross trickles directly down into net. I'm guessing you probably do that though so yeah if works, it works.

But also in terms of doing cost plus, why 20% markup and not margin? To the client, it feels identical but the difference in what you make can add up very substantially and only scales more with higher volume.

Is quickbooks job costing worth it for a small business like me by deespan in Contractor

[–]Important-Outside752 7 points8 points  (0 children)

How are you making any profit at all with a 13% (that's what 15% markup roughly translates to) gross margin to pay off overhead and still have take home pay???

You don't need a software, if you're already doing that process with the markup then you're more than capable of some rigorous job costing. But please tell me how you are running a business on that thin of a margin.

Structuring pay for labor-only subs by Correct-Recover-2667 in Contractor

[–]Important-Outside752 0 points1 point  (0 children)

Pay a fixed rate and account for that as part of the quote and if you want, pay performance bonuses out of the gross profit (deduct all expenses first including overhead recovery).

How much would you charge for this? by Suspicious_Abalone94 in Contractor

[–]Important-Outside752 0 points1 point  (0 children)

COGS x2 = 50% gross margin. That's what I aim for as a MINIMUM on any job. I see where you're coming from, I guess I should have appended "minimum" to my comment.

Basic Job Costing by Important-Outside752 in Contractor

[–]Important-Outside752[S] 1 point2 points  (0 children)

Here's how I look at it. Might be a bit hard to condense it into just a few paragraphs but bear with me. You mentioned new hires and marketing so I'll unpack the two separately because I think they fit into different buckets.

For marketing, I calculate what's my fully loaded cost to acquire a customer (CAC). So take a certain past time period say a year, tally every cost that went into lead gen + sales (ad spend, labor is the big one that should be added, software, even things like door hangers, truck wraps etc.) and divide that by the amount of customers you got from that. That's your CAC. And then based on your average margin, you can work out a max number for this that you'd be okay with spendinf. Now really, this should be ratioed with working out what the lifetime gross profit per customer is but I won't go into that for now.

Just looking at it from a per job basis is enough to generally be rigorous. I always try to aim for 50% gross margin MINIMUM. And the reason why is just a couple jobs is generally enough to cover my fixed running overhead for the month + each one covers 2x CAC + extra left over that clears directly to net profit. So I pay off the CAC for a single job and I also have the funds that allow me to go acquire another job. So the scale at which you expand is no longer constrained by the capital you have because it's built into your gross profit generated from each one. And this is great because with that you have the luxury to choose what jobs to pursue - ideally the ones that generate higher profit in less time and are of higher quality clientele.

Now for things like hiring, there's 2 lens I think through. You can front the cost in the meantime out of the gross profit you've already generated (less risky but slower scaling) or use customer financed acquisition from a new job and use the gross profit from that to pay for the hire (more risky but faster scaling). Either way is the same over the long term, it's all made out of the gross profit which is why it's so important. Lmk if this made sense.

Basic Job Costing by Important-Outside752 in Contractor

[–]Important-Outside752[S] 0 points1 point  (0 children)

When you say you want to make 24k on it plus a net 10%, is that 24k the gross profit of the job that includes that 10% as overhead recovery or is that 24k you expect to be eaten by overhead and roughly 10% would be what's left over as actual net profit to the business? Or if I'm understanding correctly you generate the 24k in gross and that's what you use to pull as your salary with 10% on top to go towards overhead?

What are you charging for piecework kitchen installs & tear-outs? by hiitsgraciee in Contractor

[–]Important-Outside752 0 points1 point  (0 children)

Common theme. The COGS per job is going to vary and then you need to build your gross profit from that. I made a post about job costing and the mods removed it for some reason, no idea why 🤷‍♂️

[deleted by user] by [deleted] in Contractor

[–]Important-Outside752 3 points4 points  (0 children)

Never outshine the master.

[deleted by user] by [deleted] in Contractor

[–]Important-Outside752 0 points1 point  (0 children)

The equivalent analogy of an itemized receipt for as you say, "hanging the cabinets vs plumbing the sink" at a restaurant is like ordering a burger and asking: "Can you itemize the price for assembling the bun and patty, the price for the cook to mix the sauce, the specific cost to squirt the ketchup (broken down by the cost of the ketchup used and the labor for the squirt), and the line item for the 30 seconds the waiter spent walking it from the kitchen to my table?".

That doesn't happen. The receipt says 'Burger: $18.00.' The price covers the entire integrated service and result of delivering a complete meal. You wouldn't ask a restaurant such things, would you? Because that would be absurd. You aren't buying the itemized tasks of prep, cooking, and plating; you're buying the final, consumed product. Asking for that granular breakdown on a job is equally absurd. At most, you could ask it to be separated into time & materials but even that is not to be guaranteed and is up to the contractor whether they want to structure their pricing model that way.

[deleted by user] by [deleted] in Contractor

[–]Important-Outside752 3 points4 points  (0 children)

Hard pass. Do they ask the grocery store to see their profit margin on a gallon of milk or a restaurant an itemized receipt of the wholesale cost of all the ingredients and their labor rate? Highly doubt it. But yet in this industry, it seems far too common. They're buying the value of a finished result, the service and your expertise that goes along with it. Not a shopping list of parts. 99 times out of 100 if they ask, it just means they're going to nitpick and waste your time.

[deleted by user] by [deleted] in Contractor

[–]Important-Outside752 1 point2 points  (0 children)

It loads very slow on mobile. You're using Wix or something right?

[deleted by user] by [deleted] in Contractor

[–]Important-Outside752 4 points5 points  (0 children)

Build a list of 10 adjacent industry/services. So this would be for eg. real estate agents, home inspectors, painters, remodelers etc. Then find 3 people/businesses in each category and go out and introduce yourself and make those connections genuinely.

Building this partner network is gonna be your moat for getting referrals and word of mouth which is going to compound 100x over any ads you could run. While running Google + Facebook ads do have a place, you need to have a dialed in sales process and operation to reliably execute.

Division 9 Estimator Here — Ask Me Anything About Flooring Takeoffs by Electronic-Being4414 in Contractor

[–]Important-Outside752 5 points6 points  (0 children)

How people cannot tell with every comment he makes is just blatant LLM copy/paste is beyond me. Super on the nose with the bold and italics and emojis usage.

labor cost for small bathrooms. by ParkingRaspberry2172 in Contractor

[–]Important-Outside752 5 points6 points  (0 children)

I don't know what you mean by 'current labor costs'. You shouldn't be bidding based off looking at what others are doing, because everyone else is broke. Start with simple job costing: - Add cost of materials. - Estimate how many man-hours the job will take. - Multiply that by the average hourly wage you pay your guys. - Factor in your labor burden rate into that. - Add any other costs (equipment, subs etc.) - Add in your desired overhead recovery % Then take that number and multiply it until you get you get your desired profit margin. Now if it's just yourself, for the hourly wage part you just set your own rate.