Pricing and Winning Jobs

Is the self-employed contractor always at a disadvantage to the more established service provider? Not necessarily, but the latter does tend to reap the benefits of name recognition.

This alone can make it difficult for self-employed contractors to compete in some niches, and in certain corners of the country. For many prospective clients, a larger and more established brand is the obvious ‘safer’ option of the two.

Even if in reality, they could get a better deal and benefit from superior quality standards with a self-employed contractor.

Either way, self-employed contractors need to do everything they can to win over prospective clients as quickly as possible. Speed is always of the essence, as delayed quotations may be interpreted as a lack of professionalism. In addition, the longer it takes for a job to be priced and a quotation presented, the more time there is for a client to take their business elsewhere.

This is where specialist quoting software like ZapQuote can help. Capable of reducing project markup and quotation times by up to 80%, ZapQuote can make all the difference when time is a factor.

Producing prompt quotations is a key factor in winning jobs, but so too is the accuracy and detail of the quotations you produce. While all jobs are inherently unique, the fundamentals of producing professional quotations that convince clients to sign on the dotted line are as follows:

1. Assess Market Conditions

The state of the economy at the time of the project should be the first thing you consider. Your usual pricing structure may need to be adjusted (in either direction) to suit the broader economic picture at a time. Costs for essential supplies and materials may have changed significantly since your last job of a similar nature. Likewise, your own living costs and operational costs may look nothing like they did at this point last year.

Always take into account the various factors and pressures that can influence job profitability and affordability.

2. Research Your Competitors

By far, the simplest way to come up with a rough bracket for your own project pricing structure is to take a look at the competition in your area. This doesn’t mean effectively duplicating your competitors’ pricing structures, or even undercutting them. It simply means checking what kinds of prices clients are willing to pay (i.e. are paying) for services like yours, so you know what’s considered affordable or otherwise.

Bear in mind that quality standards, buying power and other factors may make it impossible for you to quote jobs more competitively than some of the bigger service providers in your locality.

3. Location Considerations

Another important issue to factor into your estimates is the location where the project will play out. Think about how far you will need to travel in both directions, how much extra time you will need to budget for transportation, any potential issues with site accessibility, and the conditions of the site you will be working on.

It is always advisable to conduct a full site inspection before submitting a quotation and to take the time to discuss the project at length with the prospective client.

4. Be Comprehensive Yet Concise

Clients expect to be presented with professional-looking quotations, which while comprehensive in detail are also concise. Summarising the main tasks (i.e. costs) of the project into a series of bullet points often works best. Try to keep your quotations free of complex jargon, or at least provide an explanation as to what any complex terms mean.

Where possible, hand your quotations to your prospective clients in person and take the time to go through them together in full.

5. Basic Cost Structure

A basic template cost structure will make it much easier for you to price your projects in general. There’s plenty of scope for modification, but the basic formula that works for most self-employed contractors is:

Hourly rate x hours estimate + cost of materials (with waste/service percentage) + % for overheads (business insurance, transport costs, etc)

The size of the profit margin you add to your projects is up to you, but tends to fall between 15% and 20% of the total project costs with most self-employed contractors.

Additional Tips and Guidelines

Rounding off, a few additional pointers to help you win more jobs as a self-employed contractor:

1. Ensure you have a clear understanding of what the client does not want you to do, along with what they do want you to do (e.g., surfaces that don’t need to be painted).

2. Be as patient as possible with clients who keep you waiting, and with those who change their minds at inopportune moments.

3. Keep your quotations as consistent as possible, in terms of their general layout and presentation. Doing so creates a more professional image for your business.

4. Always deliver quotations in person where possible, even if you are not sure the client will go ahead with the proposal.

5. Never overpromise or overstate your capabilities, even if you are confident that doing so would win you the job.

6. Be honest and open about things like timeframes and the potential for additional costs, rather than paving the way for potentially unpleasant surprises.

For more information on any of the above or to discuss the potential benefits of ZapQuote in more detail, contact a member of the ZapQuote team anytime for an obligation-free consultation.