A secret revenue hidden in most contracting businesses
Everyday in your contracting business a potential revenue generating secret remains underutilized.
If you have a business that estimates between 3 and 5 projects per week, making a few small changes can generate between 5 and 10 thousand extra dollars per year. This secret can also pre-qualify tire kickers and increase the closing rate on the jobs you bid.
Here’s the secret: Begin charging for estimates!
Not possible you say? Let’s take a closer look:
#1 Change your mind-set
I am surprised when contractors object to this approach when, honestly, they have never asked! The strongest objections I hear are from people who have never tried.
I promise you that contractors are already doing this successfully in most markets. I used this approach in my own contracting business successfully for years.
#2 A rock’n marketing campaign to drive qualified people to your door.
It is so much easier to ask to be paid if you have your pipeline filled with quality prospects. A marketing strategy that builds the know-like-trust factor gives you the upper hand in getting compensated for preparing an estimate. This is something you should be doing regardless of whether you choose to charge for estimates. If you don’t have a good marketing campaign chances are you are leaving thousands of dollars on the table.
#3 A refined phone sales process.
Taking your prospective customer through a telephone sales process will pre-qualify the lead and help educate them on the benefit of hiring you to produce a scope of work for their project.
#4 Change the approach from estimates to scope of work.
You can continue to give free estimates but adopt a new policy in your company that you no longer give estimates unless a proper scope of work is generated first.
Consider the approach a car repair shop uses when they charge for a diagnostic inspection. They can’t give you an accurate estimate without first connecting your car to a computer diagnostic machine. To my knowledge there are very few shops that do this for free. You understand this, so does your potential customer.
If you have ever worked closely with an architect or designer this is how they make a living. They are called in to spec out the job and produce documents.
Making these 4 changes in your business approach can put additional revenue in your pocket and increase your closing rate. I invite you to run the numbers for yourself. If you charged 50% of your current estimates $250 to develop a scope of work this could equal 5 to 10 grand per year in additional revenue for doing what you already do for free.
Want to know more? You are invited to join me on August 22nd at 5pm eastern time for a one hour webinar. I will outline a strategy to help you customize a program for your business.
Here’s a video invitation to join me August 22nd:
“ You miss 100% of the shots you don’t take” – Wayne Gretzky
4 Responses to A secret revenue hidden in most contracting businesses
Leave a Reply
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Using Account Numbers in Your QuickBooks Chart of Accounts
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- How To Turn On and Use Manual Payroll in QuickBooks
- QuickBooks Tip - Job Costing Starts With A Simple Item
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- Welcome to the QuickBooks for contractors blog
- QuickBooks Tip - Child Support Garnishments
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks Tip - Determing Cost of Goods Sold
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks 2015- The Good, Bad and Ugly, Part 1
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks for Contractors Tip – Advanced Progress Invoicing