Mike Draper of Renovantage.com points out that mediation or arbitration are useful alternatives to taking a homeowner to court (or having them take you to court) in the event of a serious dispute.
This is the perfect time of the year to ask yourself this question. “Do I really want to fly by the seat of my pants as a renovation contractor, or do I want to try to come up with the Three Year Business Plan?”
I recommend that renovation contractors have a Three Year Plan. Three years is a good timeframe as it is close enough that it is motivating, yet far enough out that you have time to reach your vision.
If you are going to grow your business, you will need to finance it somehow. Yes, there is a risk to that, but it’s a calculated risk. Understanding your cash flow is one of the calculations you will need to do.
If you are still doing all the construction yourself in your business, that’s fine. But understand that you will quickly reach a maximum annual earnings, and it will never really grow. You will be maxed out.
The fastest way to increase your bottom line is to be more efficient – or, simply put, by saving time. Everybody has heard the expression “time is money,” but only a few contractors – the extremely successful ones – are masters at saving time and operating with brilliant efficiency.
Lawn signs make you money
Not making enough money? Then learn to think about the bottom line, not just what you’re billing (top line) on every job you do.
If you are making a 20 per cent gross profit, and you increase your price on a job by 10 per cent, you will be increasing your gross profit by 50 per cent. So that’s the importance of watching your discounting, because the reverse is true. Decreasing your price by 10 per cent cuts your profit in half!
Your goal with an Upfront Contract is to reduce the number of proposals you do for people who never wanted to buy from you in the first place.