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Old 05-03-2016, 08:51 AM   #1
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How many years into running your business did the 'penny drop' and you started to charge what you need to make a profit ?
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Old 05-03-2016, 09:19 AM   #2
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from the first day in business......you dont go into business to lose money....
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Old 05-03-2016, 09:51 AM   #3
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Yes! It's necessary to raise prices for growth. Margins squeeze as doing business cost increases. If your not growing-your dying.
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Old 05-03-2016, 12:54 PM   #4
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[QUOTE=Ozplumber;960241]How many years into running your business did the 'penny drop,<snip>

I entered the world of business in 1969, before all the prices started their upward spiral. Man I was rich, just glad I did not buy a farm to raise race horses or some kind of exotic car. Trucks at that time cost about $3,500 bucks I had two -- then came the gas lines the upward spiral of everything, the riches I had were gone I could not keep going the way it was. So I joined NAPHCC, they sent out a book. a big book full of business ideas. One Sunday morning I was reading that book and there was a chapter about O/H and profit. It said what you are spending for items in your business excluding materials and labor divided by gross sales is your overhead percentage. It continued with a graph, on 1 side was % of profit you wanted and the other side was % of O/H you had -- the rest of the blocks on the graph were numbers like 1.13 through 1.93 or thereabouts. It connected I thought you dumb $hit. The difference between what I was selling for and what I should be selling for was dramatic. I changed things around and survived. Now fast forward to 1987 an article in PM by Frank Blau. He fine tuned my business education. Hence me talking about it all the time. I won't say any more but if you go into search on the Zone and then hit tag search -- In the search box type in "BUSINESS MATH"
it will open a post made back in 2014 take the time and read those posts.

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Old 05-03-2016, 02:30 PM   #5
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Quote:
Originally Posted by Ozplumber View Post
How many years into running your business did the 'penny drop,<snip>

I entered the world of business in 1969, before all the prices started their upward spiral. Man I was rich, just glad I did not buy a farm to raise race horses or some kind of exotic car. Trucks at that time cost about $3,500 bucks I had two -- then came the gas lines the upward spiral of everything, the riches I had were gone I could not keep going the way it was. So I joined NAPHCC, they sent out a book. a big book full of business ideas. One Sunday morning I was reading that book and there was a chapter about O/H and profit. It said what you are spending for items in your business excluding materials and labor divided by gross sales is your overhead percentage. It continued with a graph, on 1 side was % of profit you wanted and the other side was % of O/H you had -- the rest of the blocks on the graph were numbers like 1.13 through 1.93 or thereabouts. It connected I thought you dumb $hit. The difference between what I was selling for and what I should be selling for was dramatic. I changed things around and survived. Now fast forward to 1987 an article in PM by Frank Blau. He fine tuned my business education. Hence me talking about it all the time. I won't say any more but if you go into search on the Zone and then hit tag search -- In the search box type in "BUSINESS MATH"
it will open a post made back in 2014 take the time and read those posts.

(50 years ago, starting a business was cheaper and there was a whole lot less competition.)

Before anything, before calculating anything, an honest appraisal of business skills/aptitude must be done. An honest business plan must be done.

Formulas are all well and fine, IF you have what it takes to operate a business. You had better be able to justify your rates in customer service and quality products or you'll flame out real quick. Face-to-face gossip is far worse than a bad Yelp review and overcharging for bad work is the #1 killer.

In other words, if your skills are at handyman level, charge accordingly. No shame there at all and you'll do okay.
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Old 05-04-2016, 01:38 PM   #6
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About 3 months in after reading the formula for getting your price on here.
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Old 05-05-2016, 08:55 AM   #7
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How many years into running your business did the 'penny drop' and you started to charge what you need to make a profit ?
Too many years. I had a customer wish me luck in sleeping at night recently. I'm finally starting to charge enough I suppose.
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Old 05-06-2016, 11:18 PM   #8
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A lawyer I work for told me the other day after replacing some drain pipes under his tile shower to put up a picture of him in my "lake house" as he was handing me my check!
If he only knew that as a OMS I can barely afford my city house.......
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Old 05-09-2016, 11:00 AM   #9
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[quote=PLUMBER_BILL;960313]
Quote:
Originally Posted by Ozplumber View Post
How many years into running your business did the 'penny drop,<snip>

I entered the world of business in 1969, before all the prices started their upward spiral. Man I was rich, just glad I did not buy a farm to raise race horses or some kind of exotic car. Trucks at that time cost about $3,500 bucks I had two -- then came the gas lines the upward spiral of everything, the riches I had were gone I could not keep going the way it was. So I joined NAPHCC, they sent out a book. a big book full of business ideas. One Sunday morning I was reading that book and there was a chapter about O/H and profit. It said what you are spending for items in your business excluding materials and labor divided by gross sales is your overhead percentage. It continued with a graph, on 1 side was % of profit you wanted and the other side was % of O/H you had -- the rest of the blocks on the graph were numbers like 1.13 through 1.93 or thereabouts. It connected I thought you dumb $hit. The difference between what I was selling for and what I should be selling for was dramatic. I changed things around and survived. Now fast forward to 1987 an article in PM by Frank Blau. He fine tuned my business education. Hence me talking about it all the time. I won't say any more but if you go into search on the Zone and then hit tag search -- In the search box type in "BUSINESS MATH"
it will open a post made back in 2014 take the time and read those posts.

I tried the search on "BUSINESS MATH"...It didn't work, you have a link?
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