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Pricing Mistake: When Your Prices Are Too High

Price vs. value
When price outweighs value

Pricing your service right is more akin to strategizing for a battle than a mere mathematical equation. Just like the legendary military strategist Sun Tzu emphasized the essence of knowing oneself and the enemy, understanding the intricacies of your business numbers is vital to not just survive but triumph in the competitive marketplace. In this detailed exploration, we delve into the three fundamental aspects that can unintentionally steer painting contractors towards overpricing, and how to steer clear of these common pitfalls.

Reason 1: You’re a Business: Mastering the Strategy of Purposeful Pricing

Sun Tzu said, “Strategy without tactics is the slowest route to victory.” Similarly, charging high, when done purposefully, steers your business toward the goal of substantial profitability. However, when it’s accidental, it’s a ship sailing towards a whirlpool of financial discrepancies and disgruntled customers.

Understanding the ultimate goal of a business, which is to generate profit, is the first step. Painting contractors often fall into the trap of feeling guilty for charging what they are worth, resulting in a business that steals time, money, and precious memories from their personal life. The key here is to realize that making substantial profit not only aids you but also enables you to better serve your community and causes you hold dear.

The golden rule is to aim for a set gross profit margin, setting a clear pathway. To achieve this, you must steer clear of the WAG (Wild Ass Guess) method of estimating. The WAG approach is characterized by a lack of production rates and consistency, leading to financial instability and a failure to scale your business optimally.

Implementing a Consistent Estimating System

Instead of reaching into the void and pulling out arbitrary figures, establishing a consistent estimating system based on defined production rates for various tasks will aid in generating realistic and profitable numbers. This approach eradicates wild guesses and establishes a structured method that can be taught to your team, encouraging growth and sustainability.

Reason 2: You’re Not Job Costing: The Tactical Approach to Profitable Bidding

Sun Tzu affirmed, “In the midst of chaos, there is also opportunity.” The chaos of not understanding the real time it takes to complete a job can indeed be transformed into an opportunity by adopting job costing.

Story of Adjusting to Real Job Costing

Sharing a tale from my own experience, I initially estimated a project to take 100 hours in a custom home project. However, job costing revealed that it only took 80 hours, indicating a gap in my bid. Job costing enlightened me about the real scenarios on the ground, allowing for more accurate bidding, and leading to higher close rates and consistent workflow.

Reason 3: Overpricing due to Ignorance of the Math

Sun Tzu urged leaders to be “subtle and elusive.” However, a lack of understanding of the fundamental math behind pricing can lead contractors to become anything but elusive, often pricing themselves out of the market unintentionally.

Understanding the Basics: Break-even Revenue and Gross Profit

The realm of pricing your work is not limited to just raising your prices. It involves a deep understanding of the mathematical dynamics, including aspects such as setting your break-even revenue correctly. Some contractors, out of ignorance, double the figures, leading to outrageously high hourly rates that scare away potential clients.

The core of avoiding this is to understand and adapt according to the gross profit concept, ensuring a realistic and profitable pricing strategy. Learning the intricacies of the math behind pricing is crucial to avoid falling into the trap of being overpriced and losing out on potential business opportunities.


As we draw this extensive exploration to a close, we find that the words of Sun Tzu, emphasizing meticulous preparation and deep understanding, hold true in the context of pricing strategies for painting contractors. Developing a Sun Tzu-inspired approach to pricing — being precise in your estimations, adopting a tactical approach to job costing, and understanding the underlying math — is not just a pathway to business success, but a route to personal financial freedom and a fulfilled life.

As you venture forth in the contracting world, arm yourself with the knowledge and strategies explored here, embracing the spirit of a warrior, ready to carve a path of victory in the business battlefield, creating a legacy of financial success and community service.

Remember, in the wise words of Sun Tzu, “Opportunities multiply as they are seized.” Seize your opportunity to triumph by mastering the art of pricing, stepping forward with confidence, armed with knowledge and strategy, ready to win not just contracts, but a prosperous and fulfilling future.

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