Your Top 4 New Year's Resolutions By Roger Stanley Many contractors wish their companies could stand out more clearly from the competition. They wish customers would buy smarter and pay for the services they get. So, in 2005, Lawn & Landscape is going to cover marketing, sales and pricing more than ever. An underlying aspect of the value/pricing issue is that lowball competitors often set the price bar so low. In response, Ive thought about some good advice Ive picked up along the way regarding profitability, and Id like to propose four New Years resolutions for you to consider regarding getting paid what you deserve for what you do. Resolution #1: Recognize Your Costs. The owner of a Denver remodeling company shared some powerful pricing advice with me a few years ago and it applies to any contractor. This owner had grown his company from a one-person start-up into one of the largest companies in the area. His key to success came from a seminar on estimating. The seminar trainer convinced him of the power of accurate estimating that if you really know your bottom line job costs and your profit goal, this empowers you to set your price with total confidence. If a prospect wont pay you what you need, then you have to walk. Simple, powerful and absolutely true. No one can knowingly afford to take jobs at a loss. But if you dont know the real cost, it is possible to take such jobs in ignorance. To make money guaranteed all you have to do is know exactly the minimum price you need to cover your costs and then add your profit. If you do this and make the sale, you will make the profit. Do that a lot and your business will be a success. Resolution #2: Recognize What You Deserve. My first boss taught me the difference between pay and profit. As a business owner you are entitled to be paid for your work and time. Beyond this, your business also needs and deserves a profit. As was explained to me in a conversation about setting advertising rates, a business profit should be greater than what the owner could get by selling the company assets and then investing the money. For example, if your business assets total $500,000, and you could earn a 7 percent annual return on that investment ($35,000), then that fact should help you create a minimum profit target for your company. And that profit is for your business; it is above and beyond your fair compensation for working. The idea that customers "give" you a profit is wrong. The owner of a business deserves a profit for that business for the risk he or she is taking and for the asset value tied up in his or her business. Resolution #3: Recognize the Value You Bring. If you are selling mowing, weed control, tree planting, retaining wall construction or other services, you might not be getting as much profit as your competitor who is selling the same services, but pushing the fact that his clients can have "the best looking lawn on the block," "weekends free" or "a space to entertain friends on weekends." The customer decides the value of the services and expertise you sell. So, before giving them a proposal priced at what you think they will buy, ask the prospect enough questions to find out what they expect and then propose the job and price accordingly. Resolution #4: Recognize Time Wasters. Sandler Sales Training teaches you to get money on the table early in the discussion. In fact, talking about money right away helps contractors separate the tire kickers from the serious buyers. Your time is worth money, so why waste it hoping some prospect might be serious or that they can afford your services? Youre better off disqualifying tire kickers and people pumping you for ideas as fast as possible, and then use that time that you saved to qualify other prospects. By the way, tire kickers and dreamers wont be convinced by your time investment to agree to your outlandish price. Now, if you think your price might be outlandish, then please refer to resolutions No. 2 and No. 3 again. Heres to a prosperous and profitable 2005!