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Reply by Lee Barker

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Posted on Pricing Your Work

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Lee Barker

2169 posts in 1536 days


#1 posted 04-27-2012 03:08 PM

Thank you for hearing us, Wookie. It’s not the kind of question that gets a two-line response, like “two coats of poly. Be sure the stain is dry.”

Rich, thank you for underscoring some points I made. I take issue with your idea of profit being equatable to risk. Or better, I absolutely agree with that, and being in business for yourself is risk enough to require profit from every job. Let me illustrate.

Profit is what lets you bridge gaps. Suppose Wookie has a contract to deliver another set of custom speaker stands by May 1.

Suppose he has spent the last two months building similar product under similar conditions, and now his springtime allergies kick in, and he’s useless in the shop for a week. He has nothing to fall back on. He may be unable to meet his fixed costs this month. Profit would have prevented that tragedy.

Again, suppose Wookie is perking along making these contract jobs with no profit in them and he peeks at CL one morning and there by golly is an Onsrud Pin Router for sale, in the next block over, for $150. Because he has been working for net, he has not one cent available to him to take advantage of this opportunity for his business to grow.

And finally, suppose Wookie has been building speaker stands for six months, spec, with a realistic profit figure built in. All his dreams have been realized and things are going fine. His product, process and business procedures have all improved.

Now someone comes along and wants three sets on a contract basis, so he bids them with no profit.

Suddenly he finds himself working away at the shop, doing what he loves, but for less money than he was getting last week. Tell me what you think will happen to his attitude and, by extension, his productivity and his relationship to this job and this client.

There should be profit in every job.

Kindly,

Lee

-- "...in his brain, which is as dry as the remainder biscuit after a voyage, he hath strange places cramm'd with observation, the which he vents in mangled forms." --Shakespeare, "As You Like It"


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