In the November/December issue of Floor Covering Installer, we ran an article by Michael Hetts, “Carpet Installation Pricing Guidelines,” which addressed the cost of installation. We knew that the subject of the article was a hot topic among installers, but we had no idea the reaction it would generate among our readers. The response was simply overwhelming; we were inundated with e-mails and phone calls from readers wanting to get Michael’s pricing information spreadsheet, as well as the installation Blue Book. Definitely, we had struck a nerve with this subject, so we followed up that article with a second article, “More on the Blue Book,” in the March issue. This article also generated tremendous response from the readers, as well as a lively debate on our online bulletin board. The general feeling was that it was a great idea to use the Blue Book as a tool to get better pricing for installation services; however, actually getting higher prices was another matter.
To further explore the issue of the cost of installation, we are featuring in this issue of FCI another article by Michael Hetts, in which he addresses the concerns of installers about negotiating higher prices, and also offers a useful chart on the cost of installation tools. Together, these three articles serve as a valuable primer on how to determine the price of your services as an installer. If you haven’t done so already, you should put all of your expenses together into an Excel spreadsheet, which makes it simple to calculate pricing for any installation.
Installers today face a variety of challenges; among those challenges is increased competition from foreign workers, who often will work for much less than normal wages. This influx of foreign labor has depressed wages for installers in many areas, as contractors try to lower their bottom line. Many of these workers lack proper installation training, and many are illiterate, making it impossible to read manufacturers’ instructions. This is a situation that will likely lead to a dramatic increase in installation failures.
While this may seem a dire situation for the installation trade, it may also present an opportunity for well-trained installers to expand their bottom lines. By emphasizing your training and explaining your pricing to the retailers and contractors you work for, you can differentiate yourself from your competition.
In order to run a profitable installation business, it is imperative that you know your cost of doing business. Everything, including tools, installation materials, and transportation costs, must be factored into the rates you charge for installation. The bottom lines is that by making sure all your expenses are factored into your pricing and charging accordingly, you can stay competitive and make a profit at the same time.
Do You Know Your Cost of Doing Business
April 23, 2007