Don't Tell Me What to Charge!
When we first released Numbers Cruncher many years ago, some of our users showed their price details to their accountants.  We received some interesting comments from these financial "experts."  We had expected hard numbers people like accountants to immediately embrace the results that their clients showed using Numbers Cruncher.  After all, that's one of the reasons people use accountants - to get the real numbers from a complex business.

Most accountants did not disappoint.  They encouraged their business clients to include all of their costs and a reasonable profit when setting their prices. 

As with most things in this world, there were some who objected to their clients accurately calculated prices!  More than once we heard that a Plumbing business could not charge that much.  Which was usually followed by something like, "Why, I don't even charge that much per hour!" as if the cost of running an accounting office had anything to do with Plumbing costs.  They insisted that their clients charge less than their breakeven just because they were a lowly service business.  Actually making a profit would be a rip off of their customers.

Fortunately these accountants were a very small minority.  The rest understood that their clients had to cover their expenses and make a profit to stay in business.

But accountants aren't the only ones who will object to your accurately calculated price.  Everyone has customers that want to tell you what to charge.  That's one reason businesses have switched to Flat Rate Pricing.  When you Flat Rate, you don't reveal what you need to charge to cover your costs and make a profit.  You eliminate most of the "Even a lawyer doesn't make that much" comments.

Most of these price judgments do not take into account the type of business you're running.  How many accountants have an expensive truck with thousands of dollars of parts in it that they have to pay for?  Do they have to cover the cost of driving that truck from site to site?  Do they have to cover the cost of defective material call backs?

Comparing your hourly costs to other professions is always a mistake.  Your new equipment and training for handling the latest radiant flooring system costs a lot more that a new calculator or even a new computer for your accountant.

Perhaps the worst critic of your accurately calculated price may be you.  Many business owners Crunch their Numbers and are immediately on the phone to tell us that they could never charge that much.  Their customers would all leave them.  Our response is always a combination of questions like these.  Are you and your employees making way too much?  Are you working out of luxury offices that are way more than your business needs?  Are your costs so extravagant that you are uncompetitive?

Most smart business owners can answer no to all of these questions and that leaves us with two responses.  Do you want to cut your price and lose money on every job, or do you want to charge a profitable rate and offer your customer high quality service that matches your price?

If you control your costs and accurately Crunch your Numbers, no one should question your prices.  You're in business to earn a living.  The only sure way to do that is to know your costs, add a reasonable profit, and get to work.  It's your business, run it your way.  Let other people set their own prices too low and work themselves out of business.

If you need a hand setting your business numbers, email Mike Conroy.  He can help you combine your current numbers with your target company size, so you can set measurable benchmarks and build your own right-sized profitable company.

Measure Monthly, Adjust Quarterly
 & Achieve Annual Profit Goals

 On-Line Resources
The Lawrence Berkeley National Laboratory has an extensive energy savings calculator.  It can be customized to the geographic location, building size, current configuration, etc. 

You can print out their predicted savings and return on investment reports. These reports could be a good tool to help close the sale of high efficiency replacement equipment since it shows the amount saved by making the upgrade.

The International Association of Plumbing and Mechanical Officials and the International Code Council have agreed to jointly develop one plumbing code and one mechanical code to be used throughout the country. Both organizations will hold meetings around the country to publicize the  the new codes which should be available in 2009.

The Radiant Panel Association has an
on-line Radiant Flooring Guide

New Price Guide Feature
A National Standard Price Guide Flat Rate user emailed us with a request this month.  He wanted to be able to have his Flat Rate Price Books show his prices without any cents.  For example, he wanted a Task with a price of $575.41 to print as $575.00.

We were able to add this feature as on option on the Task form. You can see how it works in this video - TaskRounding.AVI.  With a few mouse clicks, you can change the format of your Task printouts. 

If this new option is something you can use, you can download the free update now at our web site.

The next Money Masters™ will be at the Hutchinson Island Marriott Beach Resort, Stuart, FL on June 23 & 24, 2006.

This Money Masters will visit NSPG Flat Rate users Elite Electric, one of the fastest growing members in the Nexstar Network. Prior to joining Nexstar, Elite Electric was 100% new construction and deeply in debt. Within a few short years, they converted to 100 % service and are very profitable. Elite Electric provides education for every employee to ensure they have the best and most knowledgeable technicians to serve their customers.

Elite Electric shows its dedication to its community by providing services to Habitat for Humanity®, Treasure Coast Community Church, Love Center Regeneration, The Boys & Girls Clubs and other non-profit organizations. Elite Electric is strongly committed to its families, employees, community, and customers.