8 Year-End Financial Myths Costing Your Business Money
Attn: Jobber Community It's about that time to be thinking about year-end...and many home service business owners make the wrong move (or no move at all). Join me on October 22nd at 11am ET where I am collaborating with Jobber to discuss 8 Year-End Financial Myths that could be costing your business. Sign up today (link below). PS If you register and attend live, there's a chance to win a $50 gift card. See you there! https://www.getjobber.com/events/year-end-financial-tips/How to Win the Job When You’re Not the Cheapest Bid
Have you lost a job recently to a lower bid, even though you were confident your price was fair for the scope? Same story I hear a lot from contractors we work with. Homeowners rarely have a real way to compare the quality of two bids. They can only compare the number. So when price is the only variable they can see, price is what they use to decide. The fix isn't to always be the cheapest bid. It's giving the homeowner something else to compare, and that something else usually comes down to a few concrete things they can actually see and weigh against price: How clearly you explain what's actually included in the price and what isn't? Whether you walk them through your process instead of just handing over a total Proof that other people had a good experience with you (e.g., reviews, before and afters, past jobs in the neighborhood) What happens if something goes wrong after the job is done? None of these replace a fair price. But when a homeowner can see the difference between two contractors, price stops being the only thing they have to go on. What's worked for you when you weren't the lowest number on the page?How do you calculate your baseline price before sending a quote out?
When you look at a job site, how are you actually building your estimates? Are you pricing based on true operational costs and target profit margins, or are you matching local competitors and hoping there is money left over at the end of the month? Knowing your numbers comes down to a few key questions: What is your true hourly overhead rate? (Total monthly fixed overhead divided by total monthly billable hours) Are you calculating margin or markup? (Markup on cost is not the same as gross profit margin. If you want a 30% margin, multiplying your costs by 1.30 leaves you short at 23%.) What is your minimum shop rate before pulling a rig out of the driveway? How are you handling this in your business?How are you qualifying new clients?
This is something we’ve struggled with for a few years. How and when to really qualify clients before you do the estimate. Right now our flow is typically people will call and speak to my Admin and she will book them in for a video call with myself. They can also book and schedule this online through the AI receptionist or online booking. Now because we’re just doing a video call we’re not driving all over. I don’t really have a whole lot of skin in the game. I’m wondering, should I not qualify them too hard? These are the qualifying questions that we’ve been trying to ask. 1. When would you like to get this project done? 2. Do you have a budget for this project? 3. Have you got other estimates that we need to be aware of? Who is hard-core when you do this? If you didn’t like the responses you were getting would you literally stop the video call and say sorry we can’t give you an estimate for this? I would love to hear how hard-core others are doing this? Thanks for your time.Those who charge for inspections, do you have a flat rate or does it depend on the property?
I recently got a request for a rodent assessment for a house that is about 10,000 sqft, an absolute monster of a house with 6 levels, a 4 car garage (buddy has a McLaren 750S, Porsche 917, Ford GT and a Range Rover!!!), vehicle lifts, elevator, separate chef kitchen, indoor pool...the works! I told the homeowner my standard fee for a more modest sized house, and that I would have to triple that to be able to spend the time at their home and not feel rushed. They did agree and made no issue out of it but it did make me wonder how other people approach this. Then I found the issue areas and they were about 3-4 times as many as a regular house and the cost reflected that. More doors, vents, cracks, holes, utility lines...it was insane. Should I have kept the inspection charge the same knowing I would find many many more holes or was it smart to up the inspection charge?Are You Building a Business or Just Creating Yourself Another Job?
It’s easy as a small business owner to get caught up doing everything yourself. At what point do you start delegating, hiring, or putting systems in place so the business can operate without you being involved in every job? I’d love to hear how other owners are making that transition while still keeping quality and customer service high.Should customers pay more if they refuse auto-pay?
Auto-pay saves a lot of admin time in a recurring service business. Manual billing sounds simple until invoices sit unpaid, cards fail, reminders pile up, and someone has to decide whether to pause service. That extra follow-up has a cost. I don’t think every customer who avoids auto-pay is a bad customer. Some people just prefer more control. But if one customer requires more billing work every month, should they pay the same price as someone on auto-pay? I’m starting to think manual billing fees make sense. Something simple like: “Auto-pay is included with monthly service. Manual invoice payment is available for an added admin fee.” Do you require auto-pay, charge more for manual billing, or let customers pay however they want?What’s Your Target Gross Margin vs. Actual Net Margin? Let’s Benchmark.
In home services and contracting, top-line revenue gets all the attention, but net profit pays the bills. Many trade operators aim for a 40–50% gross profit margin to retain a healthy 15–20% net margin, but actual figures vary significantly based on team size and trade complexity. A standard healthy benchmark breakdown often looks like: Cost of Goods Sold (Direct Labor + Materials): 50–60% of revenue Overhead & Operating Expenses: 25–30% of revenue Net Profit Target: 15–20% of revenue I’d love to benchmark with the community: Are you hitting your target net margins consistently as you scale, or is overhead creeping up faster than revenue? Where are you seeing the biggest pressure on your margins today?Are You Selling Your Service… or Selling the Experience?
Customers have more choices than ever. Sometimes the difference isn’t just the service you provide, but how you make people feel from the first interaction to the final follow-up. What are some ways your business creates an experience that keeps customers coming back?Service Agreement Ideas for Project Based Businesses
This one has got me racking my mind. One thing they always talk about when you are building enterprise value in a business is having predictable revenues. I think for something like window washing, lawn care, poop scooping etc it'd be easy to have predictable revenues because it's pretty straightforward to have a re-occuring service agreement. But what about us GCs? I originally thought I could get people with a membership for a percentage off jobs. This seemed like a good idea till the first two people to sign up only did so because they had large $40k plus jobs so it was a no brainer (it paid for itself 2x over). If I tried to make the percentage off smaller, it wouldn't be enticing enough to get people interested. Let's brainstorm here guys - what can a general contractor do as a monthly or quarterly service to get in to the service agreement game?
