Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Contractors: Is your pricing too low? Let’s talk about being busy but not making a profit.

Name: Painting Contractors: Is your pricing too low? Let’s talk about being busy but not making a profit.
Uploaded: 2023-07-10T16:10:40+00:00
Duration: 15 s
Channel: Daniel Honan
Description: In this conversational segment, the speakers warn painting contractors against underpricing their services, noting that many small firms become extremely…

10 Jul 2023 · 0 min

Watch on YouTube

0:15

In this conversational segment, the speakers warn painting contractors against underpricing their services, noting that many small firms become extremely busy yet fail to turn a profit. They cite a rule of thumb that if 25‑35% of customers do not push back on quoted prices, the pricing is likely too low. The discussion outlines a three‑step approach: first, recognize that underpricing is occurring; second, examine operational metrics such as production rates and labor burden; and third, adjust the sales process and pricing strategy to achieve a healthy gross profit margin.

race. You don't want to price yourself and just race to the bottom. I see a lot of folks, especially, you know, they're $250,000 in revenue, where they're just underpricing themselves like crazy. They're super busy, they're killing themselves, they're not making any money. And it's just, you don't want to be in that, that position.
So I've heard it said that if, you know, 25 or 35% of your customers don't push back a little bit on your pricing, it probably means your pricing's too low.
So first step, identify that you're in that place. If you are, And then second step, take a look at production rates, understanding, you know, your burden, labor burden, pricing yourself correctly, looking at your sales process to get your, your gross profit where it needs to be.