Your clients might scrutinize and ask questions about the price you quote them to complete their remodel because you could be operating as "hired labor, not a business owner," Michael Stone, author of Markup and Profit, says in a recent blog post.

Stone argues that some business owners in the remodeling industry are neglecting to learn how to run a business, which is ultimately hurting them:

They have a hobby and it's easier to keep doing what they're doing than to make any changes. It's easier to give a rough estimate and send a bill after the fact than to properly estimate and price a job.

It's easier until you have to answer detailed questions about what cost items you're marking up, and why. Or until a fight starts because they've already paid more than the rough estimate, the job is only half done, and they've run out of money.

Stone advises remodelers to "develop a firm, fixed-price quotation" so that homeowners know upfront how much they can expect to pay for a remodel. He also advises remodelers to educate themselves more about price estimating, sales, and markup to avoid clients' questions about cost in the middle of a remodel:

No one wants to pay more than they have to for anything, including me. I get it. That's why you need to establish a firm fixed-price up front and deal with those discussions before you invest your time and money in their home, not afterward. Learn how to sell so you can explain what you provide that the cheaper hired labor won't provide.

Then do the things that show clients that you're a professional. Return your phone calls. Show up for appointments, on time. Write a detailed contract. Keep your word. Keep your jobs clean, every day. Respect your client's home and person. Communicate with your clients on a daily basis.

These things will do far more to build trust and confidence, and to generate referrals, than anything else. And that's how you stay in business, profitably.

Read more >