In this article we will look at some of the issues that you should be considering when costing a pool build project.
Getting your quote right is one of the most important processes in running a successful pool business. If your quote is too high, you may not get the job; too low and you are working on a reduced profit margin and potentially for no profit at all.
The rising cost of…
The two most obvious parts of any quote will be materials and labour. For major items such as pumps or heaters you will probably be getting a fresh quote from the suppliers each time, but what about the more mundane items. Sand, cement and steel increase in cost all the time; maybe only by a small amount but those small increases can add up especially on a big project.
Men and materials have to get on site and fuel costs seem to be spiralling. From a quoting point of view, it’s easy to ignore the rise in price of something that you buy every day – but that increase can eat into your profit margin.
Office materials cost more, your phone bill gets higher, the cost of advertising increases. These things may not appear in your quote, but the money earned from each and every job you do has to pay for them and so that increase should be reflected in your quote.
It is always easier to keep a track of these increases and increase your prices slightly each time, than to let things slip and suddenly find that you have to put up your quotes significantly in order to stay in profit.
The RPI (Retail Price Index) or CPI (Consumer Price Index) will give you some idea of how prices and costs are going up overall. If you are falling far behind these figures then it may be time to take a serious look at the costs which you are including in your quotes.
It’s human nature to stick with the same suppliers that you have used for years but they may not always be giving you the best deal.
Your client has probably asked for a quote from more than one pool supplier and you should be doing the same: looking out for special offers or deals; taking advantage of changes in the market, new suppliers coming in or old ones offering a sale price.
The internet allows you to do these sorts of searches relatively easily. If you do find a better price, then ask your regular supplier if they will match it. Everyone realises that business is competitive these days and if you don’t ask, you will never find out.
Budget for the unexpected.
All projects have their own little surprises; unforeseen costs or unexpected difficulties that have to be overcome.
Having some sort of contingency for these situations in your quote will offer you some sort of protection. In some instances you might be able to approach the client and explain the situation and ask them to cover the cost, but this isn’t always the case and clients don’t always agree. It’s best for you to be prepared.
How competitive is the competition?
Do you know what your local competition charge for similar products and services? You might be happy to feel that you are the most expensive because you are the best or you might want to be highly competitive on price, but you can only make that decision if you know what similar companies in your area are charging for similar jobs.
There is an old adage that says you will quickly find out if you are charging too much but never know if you aren’t charging enough. Who’s going to tell you?
Some background knowledge about what your competitors pricing structures are will make you feel more comfortable in that regard and help you put in a price that is right.
Do you know where to source a product in the event of a shortage from a current supplier?
Delays can mean unhappy clients and even cost over-runs if your workforce is hanging about unable to get on with the job while they await a delivery. These things happen and once again it’s a good idea to have a contingency plan. You might want to negotiate prices and trading terms with alternative suppliers even if you are happy with your regular choice.