Are you putting your business in jeopardy?

BY RICHARD P. DiTOMA, L.M.P.

contributing writer

Jeopardy is defined as the state of being exposed to danger. It’s also the name of a popular TV game show that gives contestants answers to questions in certain categories at different dollar amounts. The contestant who rings in first with the correct question for the given answer earns the dollar amount allotted to that question. The player with the most money at the end of the game gets to keep that amount and wins the game.

If you want to test your business management ability, I’ve made up a contracting business game board modeled after that great game show. It should help you understand whether or not you are placing your business in danger.

Get yourself a pad and pen. Download a copy of the game board here without looking at the questions located in this article. There are six categories with five answers each, for a total of 30 answers.

Your job is to provide the questions to which those answers apply. Your questions are correct if they match those I have included in this article for the respective answer.

Rate yourself: A = 28 to 30 / B = 24 to 27 / C = 21 to 23 / D = 18 to 20 / F = 20 or less. If you were correct 30 of 30, congratulations. But, if you got less than 30 of 30, there is room for improvement. If you need help or want clarification on the game, call me.

Category -- ARE YOU SURE?                   

Answer #   

1) How do many contractors arrive at their selling prices?

2) What sentiment do many contractors use in making decisions?

3) How many contractors know their real cost of opera tion?

4) Why do many contractors work more hours and experience much more stress and frustration than they should?

5) What trait prevents contractors from charging higher prices?

Category -- BE SURE!                   

Answer #

6) What keeps contractors from pricing their services properly?

7) What keeps contractors ignorant, egotistical and fearful?

8) What would help contractors make wise decisions?

9) What should contractors always deliver to consumers?

10) What is the one and only reason for which business exists?

Category -- YOUR REAL COSTS!

Answer #    

11) What is profit?

12) What major expense do many contractors confuse with profit?

13) How do contractors make up for using wrong numbers?

14) Why don’t contractors correctly calculate their operational costs?

15) Why do contractors fail to include all their operational costs?

Category -- THE RIGHT PROFIT MARGIN  

Answer #

16) What 3 factors are important in choosing a proper profit margin?

17) What unknown factor alters contractor cost & profitability?

18) What should contractors do to profits to attain their goals?

19) What should contractors never do to maximize profits?

20) Regarding profit margins, what tool should contractors use to mend the effects of Murphy’s Law?

Category -- THE PRICE IS RIGHT! 

Answer #

21) How many ingredients are needed to make the price right?

22) What is the first ingredient needed for the price to be correct?

23) What is the second ingredient needed for the price to be correct?

24) What is the third ingredient needed for the price to be correct?

25) What is the fourth ingredient needed for the price to be correct?

Category --  TRUE SUCCESS  

Answer #

26) What should a contractor charge to cover travel costs to client?

27) What are the two most important assets to look for in an employee?

28) In order to have the opportunity to enjoy life, putting aside emergencies, what is the maximum planned number of hours to work per week?

29) What must contractors use to deliver excellence, cover their costs, earn the profit they deserve for delivering excellence, relieve their stress and frustration and enjoy life? 

30) What qualities must contractors implement to reach their goals?

            

Richard P. DiToma is a business consultant and contractor with 36 years of experience in the P-H-C industry. He conducts seminars, evaluates business operations, publishes customized price guides for contractors and offers continuing support.

His book -- “Solutions Management Theories & Methods for the Contracting Business” -- deals with solving pr-oblems contractors face; identifying & calculating costs; developing proper profitable prices; addressing consumer questions; hiring and evaluating technicians; and logical management procedures

It’s also available as a “Workshop On Demand” for individual businesses (from one person to multi-person businesses); contractor groups  (organized or informal); trade associations; and wholesalers to the trade.

Date: Arranged according to your schedule

Location: Wherever you wish. Richard P. DiToma will come to you -- or you can come to him. Contact Richard to find out if there is a workshop coming to your area.

His other book -- “Readily Available Pricing Information Digest 2006” -- for the plumbing-heating-cooling contractor service price reference book is available with plumbing &/or heating &/or cooling section(s). To receive more info about his services, to order his books or to contact Richard at 845-639-5050, by fax at 845-639-6791 or via email at richardditoma@verizon.net