In 2017, Peter Searle the Business Doctor for Maidstone met with a Painter and Decorator. The business appeared to be doing very well. It had been trading for more than 5 years and the owner was clearly actively promoting the business on Check-a-Trade and through BNI. However, the owner admitted that he was working all the hours under the sun (and moon) and overall was not making much more than he was paying the painters he employed on a subcontract basis.
Upon further questioning, it was found that he had a healthy workload and was not winning every job he bid, so he was pitching at the right price in the market place.
The issue revolved around the way he was pricing and charging himself to the business, as more people were used to carry out the work. Peter set up a spreadsheet to model how the costs should be allocated and how by taking on more work he could trade himself out of the issue and get more time for himself. The mindset change required was that he was now marketing, supervising and paying others and managing a business. All these functions command a greater reward than the painter rate he was charging to the business when working on the tools or giving his time for free as it was his business. With the additional work the cost of managing could be accommodated without compromising the appropriate amount of work won. By using the spreadsheet he was confident the new pricing method would work and provide a greater feedback on where his pricing was in the market.
If you are a trades person with 2 or 3 workers, you use regularly and you find you are trapped in the business, not earning as much as you want, then book one of my health checks to see if I can help you paint the town red.