Like every business, you need a reliable, trackable system for quoting and invoicing, managing jobs, allocating labor and materials, collecting payments and paying taxes, etc. You also want to establish an easy, efficient way to communicate with customers, and encourage them to share their satisfaction with their peers.
Once you’re setup with the right equipment and have a reliable book of business, you can expect pretty fair profit margins. Many members of the ServiceWorks report margins of 40% or better but that can vary greatly, and just lowering your prices to get more work isn’t always smart.
Based on doing 10 jobs a week for $200 each, producing $2,000 in gross income, if:
Variable expenses are $30 per job = $300
Fixed expenses are $300 per week = $300
TOTAL EXPENSE for the week = $600
NET PROFIT FOR THE WEEK = $1,400
If prices are 20% lower ($160) and you get 30% more work, (13 jobs), producing $2,080:
Variable expenses are $30 per job = $390
Fixed expenses are $300 per week = $300
TOTAL EXPENSE for the week = $690
NET PROFIT FOR THE WEEK = $1390
In other words, you just did 30% more work for less profit.
To avoid falling into simplistic traps like undercutting yourself, consider using a simple mobile carpet cleaning software like ServiceWorks. This helps you track relative costs associated with jobs (including chemicals, gas, labor etc.). ServiceWorks time tracking feature also allows you to track actual time spent at a job, so you can ensure you’re quoting accurately—and making the most profit possible. Plus on top of that you can schedule your jobs automatically based on your availability.
Saving time to do the same thing you used to do helps you add more jobs per day without lowering your cost. Sign Up for FREE TRIAL with ServiceWorks.
