Episode Transcript
[00:00:00] Speaker A: Foreign.
Welcome back to the total profit podcast. I'm T2. I'm here with the king of calm bidding and profit minded pricing, Tommy p.
Hey, hey, T2.
[00:00:19] Speaker B: Yeah. Let's talk about the panic tax business owners pay when they're afraid to charge what they're worth.
[00:00:27] Speaker A: Today's episode is called no More Panic Pricing. Because way too many business owners start pulling numbers out of thin air when it comes time to submit a bid.
[00:00:37] Speaker B: Or worse, they're lowballing to win work and then wondering why they're busy but broke.
[00:00:43] Speaker A: So let's talk about what panic pricing looks like. Panic pricing is when you quote based on fear, based on rather than based on facts.
So you say yes too fast.
You throw out a number because you think it'll win, not necessarily because it's right.
[00:01:02] Speaker B: Yeah. And some of the big indicators are you ignore your overhead or forget about it.
You don't account for your true labor costs or you slash your margins because the client seems hesitant.
[00:01:17] Speaker A: When that client seems hesitant, it's easy to say, well, I'll take the price lower. Right. It's emotional bidding and it almost always leads to regret. Right.
[00:01:28] Speaker B: Exactly. It's common because business owners feel the pressure, pressure to keep their crews busy, pressure to land the jobs, pressure to beat the competitors.
[00:01:38] Speaker A: And that pressure kind of makes you forget your numbers.
So, but even you know, if you price out a panic, you've already lost, even if you win the job.
So let's talk about how you can build confident pricing.
[00:01:52] Speaker B: Yeah, exactly. So you have to start with your true cost. What does your labor cost you? What do your materials cost you? What does your equipment you're using cost you?
Then you tool in your overhead. And then last but not least, the most pro, you know, problematic thing is people don't have a margin goal.
So when you use, use a standardized estimating process.
Not a guessing or a prayer or even somebody else's input.
But the big thing is, is start setting an annual margin goal, get comfortable with it, know what your deviation can be.
And then when you know your margins and be firm on them, if you have to tweak them just a little bit, you know you have that covered and you're going to be okay.
And then the most important one is practice, practice, practice your pitch. Because a confident pricing needs a confident delivery.
[00:02:55] Speaker A: If you flinch when you say the price, then the client will flinch too. You have got to believe in your, in yourself. And you've got to believe in your business and your product and your service, whatever it is that you're offering, you've got to believe that it's worth it.
[00:03:09] Speaker B: And surprisingly enough, you're going to get better clients, healthier jobs. You're going to have less stress. You're not going to be scrambling at the end of every month. You're going to be stacking up those wins.
[00:03:22] Speaker A: And when your pricing actually reflects your value, you will attract those customers and the people who actually value your work. And that's important. And that's when the job becomes not just a way to feed your family and put shoes on your children, but it becomes very fulfilling. And you start looking forward to going to work every day when you. When you've got those customers that value what you do.
So quick, shout out to Performance Margin. That's our sponsor and the tool that helps you build that confidence in your numbers and your bids and your bottom line.
It's pricing strategy with backup numbers, backup data backup. So your action step for this week is to take a look at your last five bids.
Did you include margin first, like we talked about a few episodes ago, or did you panic and adjust to just, you know, what you thought they would pay?
So that's your homework. Fix it on your next one. Okay, so you've got this. No more panic. Know your worth. Price with a purpose.
[00:04:22] Speaker B: And remember, take her. Cool.
[00:04:24] Speaker A: Don't get too excited.
[00:04:25] Speaker B: It's all under control and it's going to be fine.
