As a contractor there is a lot of pressure for discounts. You can’t give one out of the gate because you know your customer is going to call you back and ask for it. They won’t believe you when you say, “Hey, I already gave you a discount”.

So, we play this silly game of raising our prices, submitting the bid, and then waiting to hear back that we aren’t cheap enough. At that point we go back to our office and drop the bid.

Maybe you don’t play that game. Maybe you quote it as cheap as you can from the beginning. If it’s a new customer, or just a real difficult one you will still get a call asking you to give a discount.

So, how do you discount safely? You give percentage of profits discounts, not dollar discounts. You don’t look at a $2,300.00 bid and decide you can do that job for $1,900.00 without knowing exactly how that is going to affect your business.

Your bidding process needs to be built from actual expenses with a pre-planned percentage of overhead and profits. If you give a discount you need to know exactly what percentage of your profit you are losing.

Arbitrary discounts look funny anyway. You feel silly trying to fake them by taking a $300.00 discount and changing it to $305.78 just to look real. When you just change the percentage (you can see a sample here) you get a discount you can understand AND be confident in.

I will admit right out of the gate that this post may really thin out my blog following. Granted, the list isn’t all that long yet so I’m not exactly risking much.

I had to stop into a du-plex today and try to fix a stove opening that wasn’t wide enough. I’m wearing business casual, because that’s how I roll. Anyway, I’m in there working up a nice sweat and I’m realizing why I like the type of business that I have (or at least the one I’m shooting for).

You see, I have two companies right now. I have Blue Collar Coaching and Builders Installation Group. In BIG (catchy, isn’t it) I do very little of the labor. In BCC (not so catchy) I’m the one and only employee.

I like to use Robert Kiyosaki definitions when it comes to describing how each business is different. In his book Cashflow Quadrant (not an affiliate link) Robert explains that there is a huge difference between a Business Owner and someone who is Self Employed.

A self employed person works IN their business. If you own a cabinet company then you build cabinets and install them and send out the invoices and so on. If you are a framer then you frame homes and send out invoices and do bids and so on. At BIG I am self employed. I don’t do the hard physical labor hardly ever. I do perform all the sales and marketing and bids and book keeping and so on. My ultimate goal with BIG is completely different than with BCC.

A business owner, by Roberts definition (and mine but I don’t have a best seller, yet), doesn’t work IN his business, ever. He just gets reports on a regular basis and hires great managers (if he wants to continue being a business owner) and earns a profit.

So, my goal with BIG is to eventually turn that into a business that I just own. Which will also turn it into something I can sell because it runs itself. With BCC I plan on eventually having someone to work in it with me but I don’t ever plan on turning it into a business that I just own.

So, why in the world do you care? Why is it important to even ask this question? Because you need to know where you want to go with your business otherwise you will wake up in 10 years and be wore thin and unable to figure out what went wrong. If your business involves a LOT of very strenuous labor then you really need to consider the Business Owner plan as your ultimate goal. If you don’t you may not be able to play with your grandkids some day.

Another big reason to work towards business ownership is that to really make a big income  you need to work on multiple streams of income. You can’t do that if you have to do EVERYTHING inside of your business.

Why did I name this post Entremanure? Because I hate the word entrepreneur. It doesn’t mean anything to me. It’s just this big long word that I can never spell without looking up ( I really did just look it up again). I guess it stands for, “people who start businesses” (I’m not sure, I didn’t look it up THAT well). That’s just not a simple enough for a guy like me. I want a definition that will tell me what I’m actually doing, like Robert’s explanation of the difference between business owner and self employed. At least those two come with an idea of which direction you are heading.

[self promotion]Confident pricing is step number one for the aspiring Business Owner. Visit the ‘let us help‘ page to learn more.[/self promotion]