Although many of the small contractor business owners are very well versed in the technical aspects of our industry, they do not have the basic concepts to effectively price for profit. It is important that contractors realize that they are not just mechanics but business owners who are running a business for profit. It doesn’t matter if you are a one man show, or if you have 100 employees. You should price your services in such a manner that it won’t drive your customers away and still let you make a profit. It is important for you to understand your company’s financials so that you can price your services effectively.  It is the only way to be profitable – and it is the only way you should price your job.

Guessing your margins is not an effective method of doing business.  Know your margins – understand them and add them to your prices accordingly.  Understand your financial statements so that you can price for a profit.

In any type of business deal for small contractor businesses, a contract is something that should offer you protection from liabilities. It may seem very basic for some HVAC business owners, but a solid agreement is the way to profitability.

Starting a relationship with an Attorney who knows Business Contracting will probably be the best investment you can make for your business. Be aware that it may cost you a couple of thousand dollars, but it will certainly be money well spent.

Having a contract will protect you from all kinds of financial troubles in cases like late payments, where you can charge penalties for them. Contractual Payment Clauses will also show many of you prospective ‘High End’ clients that you are not just another mechanic with a truck, but a bona-fide businessman who knows how to protect himself while offering exceptional service.

As more and more homeowners are becoming savvy with the Better Business Bureau and the individual State Department of Consumer Affairs, these customers are learning how to manipulate and take advantage of small contractors.

As a contractor business owner, there are many different things you can do to ensure proper and timely payment, and protection from the dreaded manipulative customer. And the best method of ensuring that you are protected is to make contractual agreements. I have advised several of my HVAC Contractors to put together a well composed Home Improvement Contract that is put together and endorsed by an Attorney. Starting and maintaining a solid relationship with an Attorney is one of the best investments that you can make for your business. Another advantage of having a customized contract is that you can include clauses for change orders, payment requests and potential Lien statements within the contract and protect yourself from any probable liabilities.