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Developing a pricing structure.

Discussion in 'Heavy Equipment & Pavement' started by ksss, Nov 24, 2013.

  1. zabmasonry

    zabmasonry LawnSite Senior Member
    from C. VT
    Messages: 316

    While pricing is important, I think that its just part of a much bigger picture. In terms of pricing, I think more important then $$/hour or such is what is the final product, and keeping your price tied to the final product. It sounds like KSSS has figured out a sqft price that he knows is appropriate for his product, others do it their own way. In terms of speed of work, keep in mind that for many customers time is worth more then money, and your ability to be in and out is a real asset.

    There are a lot of factors to overhead, overhead management is one of the things that separates the boy's from the men when it comes to business management. Overhead isn't bad, just can get out of control very easily. In general for those of us who are starting out, keeping overhead low is imperative. When started my business, I literally didn't have a cent to put into it, I had to borrow money for equipment as well as working capital. Instead of buying a new or nearly new truck, I purchased a 16 year old truck which kept my monthly payment down, I also had a 10k line of credit to be able to afford to repair any issue that came up with my truck. That is also a good point, part of managing overhead is having access to cash, a line of credit is a cheap way to make sure that you can get through some short term slumps without issue. (a word to the wise: if you keep your head in the sand and don't make changes a line of credit will only bury you deeper). Last words: really know what your overhead is, if you don't it will catch up to you.

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