Contents
- Onboarding New Staff with Pricing Exercise
- Scenario of a Small Truck Business and Daily Metrics
- Importance of Sharing Financial Information with Employees
- Understanding Pricing Nuances for Higher Profitability
- Additional Expenses to Consider
- Breaking Down Pricing Structure for Customers
- Importance of Profitability for Reinvestment and Growth
- Key Takeaways
Onboarding New Staff with Pricing Exercise
Scenario of a Small Truck Business and Daily Metrics
Importance of Sharing Financial Information with Employees
Transparency and open communication play a vital role in fostering trust and creating a sense of ownership among employees. Mike Disney highlights the importance of sharing financial information with the team. When employees have access to relevant financial data, such as revenue, expenses, and profit margins, they can better understand the impact of their actions on the company’s bottom line. Transparency helps to hold people responsible, makes them aware of how their choices affect money matters, and inspires them to work towards the company’s achievement.
Understanding Pricing Nuances for Higher Profitability
Pricing is not just about covering costs; it’s about maximizing profitability. Mike Disney emphasizes the need to understand pricing nuances to achieve higher profitability. Factors like market demand, competitor pricing, and value-added services should be considered when determining the optimal price point. Tradespeople and contractors can find the best way to make money without upsetting customers by studying the market, customer behavior, and testing different prices.
Additional Expenses to Consider
Breaking Down Pricing Structure for Customers
Importance of Profitability for Reinvestment and Growth
Profitability is the lifeblood of any business. Mike Disney emphasizes the significance of profitability for reinvestment and growth. By maintaining a healthy profit margin, businesses can allocate resources to develop new products, expand service offerings, and invest in marketing and employee training. Profitability also ensures the business’s long-term sustainability, enabling it to weather economic downturns and seize growth opportunities.
Key Takeaways
- Company Meetings to Discuss Business Profitability: Regular all-company meetings provide a platform to discuss financial performance, pricing strategies, and the importance of profitability. Involving employees in these discussions fosters a sense of ownership and promotes a collective effort towards business success.
- Customers Supporting Businesses for Sustainability: By educating customers about the value they receive and being transparent with pricing, businesses can foster customer loyalty and support. Satisfied customers not only provide repeat business but also become advocates, driving new leads and contributing to long-term sustainability.
- Help Service Experts Understand Impact of Purchase Line Items: Educating service experts about the financial impact of their purchase decisions helps them make more informed choices. When employees understand the cost implications of different line items, they can prioritize value for money and contribute to cost optimization.
- Importance of Accurately Estimating Expenses for a Business: Accurate expense estimation is critical for setting appropriate prices and ensuring profitability. Businesses must account for both direct and indirect costs to avoid underpricing and maintain financial health.
- Reinvest in New Products and Services to Improve and Grow: Profitability enables businesses to invest in innovation, new service offerings, and employee development. By reinvesting in the business, tradies and contractors can stay ahead of the competition and meet evolving customer needs.
In conclusion, understanding pricing structure, fostering financial transparency, and prioritising profitability are essential for tradies and contractors. By sharing financial information, educating employees, and accurately estimating expenses, businesses can build trust, promote productivity, and ensure long-term sustainability. Remember, pricing is not just about covering costs—it’s about maximising profitability while delivering value to customers. With the right strategies and a commitment to financial responsibility, tradies and contractors can thrive in their industries and achieve lasting success.
Ready to dive deeper into these topics? Don’t miss out on our full podcast episode with Mike Disney and unlock the blueprint to success in the talent market.
Video Discussion Points:
00:27 – Get 30 leads in 90 days
01:14 – Welcome back Mike Disney
04:58 – Educate employees on financial responsibility for growth.
11:42 – “1 booked call could mean millions – clarity, alignment, accountability”
13:31 – Create pricing structure for owner-operator business
24:26 – Costs of running a business: $3600 + bad debt + bank charges + accountant.
28:46 – Credit card fees cost several hundred monthly.
36:45 – Expenses: office, payroll, and rent.
44:56 – Incredibly conservative expenses, hourly rate calculation.
51:56 – Interactive pricing exercise teaches financial responsibility.
59:49 – Tennis balls loss led to profitable sales.
Other Episodes For You to Check Out:
🎙️ Episode 372 – Step Aside, Boss: 5 Leadership Commitments for Empowering Your Team
Resources:
- Get 30 Qualified Leads in 90 Days! LEARN MORE HERE
- Learn more about the CRM that DOES IT ALL for your trade business! CLICK HERE
- Get your FREE Opportunity Assessment right NOW! START HERE
- Join a global community of 6000+ trade professionals. JOIN HERE
- Leader’s Cut – VISIT THEIR WEBSITE HERE
- Get access to Ken’s e-book! DOWNLOAD IT HERE
- Get connected with Ken Kilday at [email protected]
