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What’s Right For You
Ask any successful tradesmen about pricing strategies and they’ll all tell you the same thing: the single most important element of running your own trades business is your bottom line.
Sure, building a great reputation is essential, and having a clear business strategy is key – but at the end of the day, it all comes down to turnover.
Keeping tabs on the financial side of your trades business can be one of the biggest challenges you face as a business owner.
Those who are new to running their own company can become overwhelmed by it all and does this sound familiar?
- The pricing structure
- The quotes
- The invoicing
- Chasing payments
- Maintaining healthy cash flow
… it’s easy to see how things can get complicated, fast.
Even those who have been in the business for years can have trouble adapting, especially with all the new technology we now have at our disposal.
With so many different systems out there, each with a variety of features and services, how can you choose the software that’s right for your business?
Getting Pricing And Payments Right
Getting your pricing and payments system right can be the difference between success and failure in the trades business.
It doesn’t matter how great your services are, or how great a reputation you manage to build
- If your quotes are too low
- If your clients are facing complications making payments, or
- If you’re not issuing invoices on top
It can quickly upend your cash flow and put you out of business entirely.
ServiceM8 can help you build a pricing structure that works for your business, as well as issuing invoices and receiving payments with ease.
Here’s how it can help you strike the right balance with the financial side of your business.
How To Create A Pricing And Quotes Structure
The first thing you’ll need to focus on is your pricing structure and the way you come up with quotes for clients.
If you’re setting prices that are too low, you’ll find it hard to make a profit as a business.
The less profit you make, the harder it will be to grow and expand.
Likewise, if your prices and quotes are too high, potential clients will be tempted to look elsewhere, and you’ll end up losing business.
The Profit Formula
There are lots of different ways you can ensure your pricing is right. One of the best ways is to use a formula. Here’s a simple one:
- First, calculate an hourly rate for yourself and your team. This will be the labour cost. Make sure you factor in things like base salary, earnings targets/bonuses, mandatory employer costs such as Employers National Insurance and Pension contributions.
- Next, consider the materials that you’ll need for the job. Don’t be afraid to add some mark-up to these materials – after all, you’ll be selecting, ordering and handling those materials as part of the project.
- Add in allocation of business overhead to cover all other business running costs inc
- Vehicle and fuel costs to complete the job
- Marketing for your business and the cost to acquire the customer
- The cost of insurance and equipment for your team.
- Finally, you come to the profit part of the equation. You’re in business to make money, right?
Your quote should be enough to cover all of these costs, and still have your desired profit target amount leftover.
Issuing Quotes, Right First Time & OnTime
In the trades business, time is money – and if you’re spending hours putting together simple quotes for clients, you’re losing out.
You need a system that will help you to quote fast and smart; software that helps you put together job-winning quotes within seconds.
With ServiceM8, you can choose from pre-configured labour rates, and add in standard material costs with just a few clicks or taps.
The job costing feature allows you to estimate the profitability of each job, so you can see exactly what you’ll be earning once costs are factored in.
This intelligent process is essential for a business that wants to get ahead.
Invoicing & Avoiding Late Payments
When a job is complete, you want to get paid – fast.
The process of issuing invoices and receiving payments has to be absolutely seamless, for both you and your clients.
Late payment for services is one of the biggest problems affecting small businesses across the UK.
- The average wait for invoices to be paid for businesses with an annual turnover of less than £1m is an astonishing 72 days.
- That’s a ten-week wait – and it can put a huge strain on your cash flow.
- 1 in 4 insolvencies is now attributed to late payment culture.
- Figures have also shown that 21% of small businesses are currently owed more than £25,000 in late payments, and just under one in ten are owed more than £100,000.
ServiceM8 Solutions To Late Payments
With ServiceM8, you can make it as easy as possible for clients to pay you, with numerous different options to choose from, so there are no excuses for ten-week waits that can wreak havoc on your finances.
Take payment straight away by simply entering their credit card number, or send online invoices by email and text message.
Taking clients to an online payment portal. Transactions can be processed there and then, rather than being dragged out for weeks after completion of the job.
ServiceM8 is the only business management software solution on the market to offer all of the following:
- Credit card integration and processing
- Electronic payments
- Invoice management
- Partial payments and recurring billing features
Each of these features helps keep cash flow healthy and ensure you’re getting paid the correct amount exactly when you should be – which is vital to every business’ bottom line.
Do you want to learn how to use ServiceM8 to work smarter, not harder? Software Buddy provides full training to help you discover how to leverage this technology to grow your trades business. Get in touch today to arrange a consultation.