Page 93 - Paulisms: Gold Nuggets for Small Business

12. Winter arrives and you are further delayed. However, you put in a progress claim.
13. The job is completed but they hold back retentions for a year, so there’s more administration, and they query the final bill.
14. Things are sorted, but you are still waiting for payment three months later and are continuously chasing.
15. Your time is probably worth three times anyone else’s in the business and you need to factor that in.
All these costs for a $16,000 job. All the running around eats directly into your bottom line. The job should really be a $20,000 job. At $16,000, the dollar margin would be slim and you would not make money. At $20,000, you are doing OK.
You need to allow P&G hidden in your costs.
I hated itemising quotes, as people then query each line or compare to competitors’ prices. I like lump sum quotes with all your costs hidden.
As I write this book, there are big and small building companies going into liquidation in the building industry. Whether it is caused through under quoting, not allowing enough P&G, delays, site and design issues and so on, many are running a fine-line business. If there is no profit, then don’t do it. You can afford to make a profit but cannot afford not to. Unfortunately, many companies in this sector have been in trouble for years. They need to keep going as they need cash flow because their debt exceeds their assets. Once cash flow stops, they stop. They then try to win work just to have cash flow and at no margin that other companies will not touch. It gets to a point that they cannot trade. It is so common and has been part of the building industry for forever. History repeats and its