February 03, 2022

15. How To Price Your Jobs With Russ, Sky & Andy

38 minutes

In episode 15 of the Professional Builders Secrets podcast, our host, Bosco Anthony is joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio discuss how builders should be pricing their jobs, the difference between net profit vs gross profit, markup vs margin, how to stay on top of fixed expenses and SO much more!

The traditional method of pricing jobs is to apply a margin to the cost of sales. The problem with this method is that you are hoping you will make enough profit to cover your overheads and wages. Building companies with revenues of less than $6m DO NOT enjoy the same economies of scale as traditional businesses like manufacturing or retailing.

This results in builders making little, or no net profit at the end of the year, despite taking on more work and increasing their revenue. When a building company grows, their net profit margin decreases, even when they don’t reduce their margin, they can still end up losing money. The problem lies in the method they are using to price their jobs, and during this episode, Russ, Sky and Andy reveal the secrets to avoiding this problem.

Tune in to the full episode to hear the APB trio uncover how builders can price their jobs for profit.

ABOUT RUSS STEPHENS

Co-founder of the Association of Professional Builders, Russ is a data analysis expert who has introduced data-driven decision making to the residential construction industry. Russ is also a proud member of the Forbes Business Development Council.

Connect with Russ: linkedin.com/in/russstephens

ABOUT SKY STEPHENS

Co-founder of the Association of Professional Builders, Sky specialises in taking complex business strategies and converting them into actionable step-by-step guides for building company owners. Sky is also a proud member of The National Association of Women in Construction and the Top 100 Women in the broader construction sector.

Connect with Sky: linkedin.com/in/skycheristephens

ABOUT ANDY SKARDA

Head Coach at the Association of Professional Builders, Andy specialises in helping business owners in the building industry identify and implement the skills and systems they need to be successful, without needing to go back to school. Or more importantly, without going bust.

Connect with Andy: linkedin.com/in/andy-skarda-92a6875/

TIMELINE

1:09 How builders should be pricing their jobs.

2:46 Net profit vs gross profit.

3:49 Margin vs markup.

7:35 Why builders need to stop focusing on dollar amounts.

12:04 Staying on top of your fixed expenses.

14:53 How builders increase margins and stay in demand.

21:52 The pricing strategy for success.

28:50 Why more clients does not equal more profit.

33:30 The industry benchmarks you need to aim to exceed.

LINKS, RESOURCES & MORE