Benjamin Dyer of Powered Now looks at some ways that you can improve your profit margins, whether you’re a one-man band or run an ambitious, growing business.
We all go into business for different reasons. Some would like the flexibility to take time off and pick up their kids from school. Others hate working for a boss. Yet more have bags of ambition. Some are perfectionists that never want to make a compromise and need complete control of their work.
Whatever the reason for their business, most people would like to make a bigger profit. Let’s look at some of the ways how:
Charge more but do a great job
With 70% of work for homeowner coming from recommendations or previous work. With more incoming business opportunities, you don’t need to compete on price so much. It’s a virtuous circle.
Many electricians want to give a good deal to their customers and that’s highly commendable. But if you look at the car market you can quickly realise that people don’t just buy on price. The Dacia Sanderos is the cheapest new car in the UK and costs just £6,995. Yet it doesn’t even figure in the top ten sellers.
The single biggest mistake that people running electrical businesses make is to under-price. But charging a fair to high end price must be combined with doing an excellent job. The vast majority of people are happy to pay for quality. But they will be infuriated if they pay top dollar and then receive shoddy work.
Make sure you have online reviews
In a recent survey, 70% of homeowners thought online reviews were important and 90% had looked at reviews.
Basing your request on great work done, always ask your customers to do a review. There are many places you can be reviewed. Search for “edit business listing on google” on Google itself to make sure your business is listed and can be reviewed there.
Keep costs under control
You may remember the saying that you can be penny wise and pound foolish. An example is when you negotiate hard on a cost that doesn’t matter, while paying larger bills without a murmur.
The key is to look at your costs over a whole year and then work on reducing the items that you have spent most on in the year. For materials, Screwfix and Toolstation are great benchmarks to compare what you are paying.
Plan, be organised and consider automation
Planning is the key to efficiency, making sure that everything and everyone is on site when they are needed, so there are no unnecessary visits to the electrical supplier.
One of the clients of my company, Marcelle Stoughton of fast growing Fencing Services, has this advice: “To be profitable, be as efficient as possible”.
Being well organised means getting jobs done quicker as well so there’s less cash tied up in work in progress.
Obviously, I am biased but I must mention the thing that both my company Powered Now and others do – computer automation.
There are big benefits that come from computer automation. With the increasing use of smartphones and tablets, there are more and more solutions for the trade that run on these devices. They save huge amounts of time as well as getting rid of lots of hassle. Ease of use is much better than it was during the era of old steam-powered PC’s and the mobility of these new devices adds a whole extra dimension.
Our customer survey found that business owners using our system saved more than four hours each week. That’s a lot of extra hours to charge – several days per month!
Be decisive
There are hundreds of thousands of trade businesses with owners are making a decent living in the UK. However, it’s always a good idea to stand back from time to time and examine the things that you could do differently. I hope that some of the ideas here are obvious because doing complicated things can be the enemy of success.
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