How long will a business make it if they estimate work at prices lower than their profit margin?
Depending on their initial capitalization, that period can be months or years. But if the business is not turning a profit, at some point it will close its doors. It’s essential to be working with your bookkeeper and accountant to get an accurate picture of your costs of goods or services, so that you know what your profit margin will be at any given point in time.
You want to consider contingencies and all costs.
Estimate and offer pricing that cover both and still be competitive. while giving your customer what they need and want.
If you’re competing on a price basis only and are running at a loss, it’s time to take a look at your product and service mix to see what your clients need that you can offer successfully with a profit.
Here’s to a profitable Halloween week!