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The Going Rate Is Killing Your Business

⏱️ 10:22 🎤 Tom Reber
AUDIO EPISODE
The Going Rate Is Killing Your Business
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Chapters

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  • 0:00
    The 'Going Rate' Trap
    The host explains why asking for the 'going rate' is a flawed approach that often leads to financial struggles for contractors.
  • 1:11
    Ask About Production Rates
    The host advises contractors to inquire about production rates, not prices, to understand how long tasks truly take.
  • 1:45
    Sales Leak Scorecard
    A quick commercial break promotes a sales leak scorecard to help contractors identify and fix weaknesses in their sales process.
  • 2:22
    Dangers of Guessing
    Guessing prices based on others' rates incorporates their inefficiencies and issues into your own business, leading to a 'scaled turd'.
  • 2:58
    Build Your Production Rate
    Contractors need to know three things: how long a task takes, its real costs, and their target profit margin.
  • 3:52
    Beyond the Basic Rate
    The 'going rate' ignores crucial miscellaneous costs like access issues, material waste, permits, and travel time that affect true project expenses.
  • 4:50
    Strong vs. Weak Contractors
    Strong contractors price based on their own numbers, while weak ones rely on the 'going rate' and often shave prices, leading to financial struggles.
  • 5:43
    Call to Action: Know Your Numbers
    The episode concludes with a call to action for contractors to analyze their past projects to determine actual production rates and costs.

Speakers

T
Tom Reber
Host

Key Takeaways

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Stop asking for the 'going rate'; it's an unreliable average of others' ignorance and will lead to pricing yourself into financial trouble.

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Instead of price, ask about production rates (e.g., squares per day, lineal feet per hour) to understand the actual time required for tasks.

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Know your own production rates by tracking actual labor hours for similar past projects, not estimated times.

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Identify all real costs for each task, including labor, burden, materials, equipment, fuel, and waste, leaving no room for approximation.

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Establish a clear target profit margin necessary to sustain and grow your business, and price with that in mind.

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Factor in miscellaneous costs often excluded from the 'going rate' such as access issues, material waste, permit fees, travel time, and unforeseen conditions.

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Analyze your last 5-10 jobs to reverse-engineer actual hours, costs, and outcomes to build accurate pricing based on your own business data.

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