When to raise your rates
Raising rates as a remodeler can be an easy accomplishment, as customers don't recur on a regular basis, as they do for gas-station owners or grocery stores. So they aren't aware that charges have gone up since your last job of a similar size and complexity. Deciding when to try to charge more can still be difficult; a miscalculation can result in lost business that brings in no profit at all.
Surveying customers whose jobs weren't contracted can help pinpoint if pricing is too high, and a job analysis can reveal if prices are too low. After that, the best time to try to raise a price is during the busy season, Shiner says.
"If you're busy, raise your rates," Shiner says. "If you don't get that job because you're too high, it doesn't hurt that much, and you can learn that you've reached your limit." On the other hand, if you land the job anyway, you know you're still in the ballpark.
Over time, remodelers essentially can raise their rates by doing their jobs faster — which also satisfies customers more, she notes. "You get better at what you do and can do it faster, which makes you cheaper because you can do more jobs in the same time," she points out.
Creating efficiencies in the office and creating more accurate estimates also can help bring in more profit without raising prices. Reducing costs can provide the same benefit as raising prices. As the saying goes, it's not what you make that matters; it's how much you keep.
