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Old 12-27-2009, 03:41 PM   #21
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Default Acknowledging your further points

Hello Ken,

Yes we operate in a commercial environment; facilities maintenance at petrochemical/pharmaceutical complexes, shopfitting, hotels/bars. Salesmanship counts of course but the emphasis is on handling scaled-up jobs where we are sometimes both a sub-contractor and an employer of other subbies. The work is characterised by deadlines and unintended consequences Ė generally not of our making.

Iím sure many forum members recognise our type of business and have several contracts on the go at once which necessitates having a back office to monitor contract costs on a daily basis and produces management reports that are scrutinised and argued over by senior personnel who are not the proprietors.

But in essence the sole trader and the corporation are both faced with the same dilemma; how to differentiate themselves from their rivals. We have an advantage because we operate on a scale that shuts out the one-man-band. The sole trader faces a mammoth task because painting & decorating is one of those sectors that is easy to enter (itís also easy to be forced out). No wonder many members complain about being undercut by ďamateursĒ.

But to get back to your original point, by all means give yourself a pay rise. Just remember to increase your Labour rate if you yourself carry out the work, or bump up your overhead recovery rate if youíre salaried, or better still give yourself a dividend at the end of the year on the back of higher profitability.
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Old 12-27-2009, 04:58 PM   #22
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Hi patti, thanks for the response. Now that I understand from where you are coming I can wrap my brain around the economy of scale and your perspective of price consciousness.

There are tax implications, dividend distribution, and markup theory that I intentionally left out of this article. I do factor all of the above into my own numbers analyzation.
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Old 02-13-2010, 09:17 PM   #23
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Good information, thanks.
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Old 02-16-2010, 04:55 AM   #24
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Amazing stuff!!!!! Please keep it going!!!!!!
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Old 03-24-2010, 08:36 AM   #25
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Quote:
Originally Posted by ghaffar795 View Post
There is two main factors of raising prices of commodities. Such factors are Demand and supply. When demand increase, the price of commodity automatically increase. When Supply decrease the price of commodity increase and vise verse
Well, aren't you just the smartest thing to spam a forum since Al Gore invented the internet! Must have an MBA for an answer like that
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Old 03-29-2010, 07:32 PM   #26
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just want to say thanks for the post very gd info
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Old 08-05-2011, 06:22 PM   #27
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Terrific article! I am at a point in my business where I need to take a close look at the books and get to know my numbers better. I really appreciate all the practical information!
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Old 07-25-2013, 02:16 AM   #28
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This is an informative post for a residential painting company but what is your take on a commercial painting company that only does work that he/she bids on and is awarded. Advertising doesn't really get more business. How would a company like this increase profits. I guess it is all about cutting costs and becoming more efficient?
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Old 07-25-2013, 09:09 AM   #29
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Quote:
Originally Posted by Paint expert View Post
This is an informative post for a residential painting company but what is your take on a commercial painting company that only does work that he/she bids on and is awarded. Advertising doesn't really get more business. How would a company like this increase profits. I guess it is all about cutting costs and becoming more efficient?
Service businesses are all about efficiency, so I do agree with you there. Let me pose this question to you.. What happens when you max out? When every employee is firing on all cylinders and you have top of the line equipment to get the job done reliably and more quickly than anyone else? Do you drop your price further and add more employees? (the only way to increase billing if not raising prices). That is the point when it comes full circle back to generating leads and monitoring closing rates. The more leads you have, the higher you can charge.

I made an investment in outsourcing an appointment setting company for larger/commercial jobs. Just like anybody else in the beginning, I under-priced to land work and did the "make it up with efficiency" rain dance. That doesn't always work out as planned. I'd rather have a little extra margin in each job to plan for the one where things just do not go right. Once more leads came in, I was able to sacrifice some closing rate and make more money without the living-on-the-edge-of-cheapest-pricing to stay busy.
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Old 07-29-2014, 07:36 PM   #30
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My philosophy on doing more volume and charging higher prices is to become a sales superstar and marketing genius...the rest is just details!




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Old 09-23-2014, 10:21 PM   #31
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Really great info as usual, Ken!
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Old 04-04-2017, 04:24 PM   #32
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thanks for the info Ken.




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