3 Finance and Pricing Tips From Savvy Pros

Taking a proactive approach to your money matters can pay dividends

Hope Dorman February 20, 2018

Houzz Industry Marketing Team

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Finances aren’t always fun, but understanding and proactively managing your company’s financial health can pay big dividends. Adequate planning can go a long way toward making sure your business is financially sound and growing the way you want it to grow.

Houzz pros share three strategies they use to keep up with their finances and increase revenue.

For more finance-related content, watch our webinar on proven pricing strategies that increase revenue.

Potter Construction Inc

Set Your Strategy

Identifying the aspects of your business that are bringing in the most money is vital for growth and can help you strategically reallocate resources to optimize cash flow. Look at your books from the last year and determine where your moneymaking opportunities are.

“We hold an annual planning session with our staff to begin thinking about what initiatives and projects we want to do next year,” Laurie Robbins of Potter Construction in Seattle says. “We discuss what we want to start, stop and continue, prioritizing the marketing initiatives and types of projects that were most profitable. For us, smaller projects are less efficient than larger projects, so in a slow economy, we might adjust our strategy to include more of those smaller projects. In a good economy, we wouldn’t. Our owner, general manager and accountant take what they learned from the staff at the planning session and allocate the needed resources in the budget.”

Potter Construction Inc

Adjust Pricing

Do you know the going rate for the services you provide in your area? Before you fill next year’s pipeline, research the standard market pricing, then adjust your rates accordingly so you’re not shortchanging yourself.

“At the end of last year, I decided I wanted my business to be all about designing and building beautiful landscapes for one homeowner at a time,” David Hancox of Landscape Oasis in Norfolk, Massachusetts, says. “One week in the fall, I got 10 leads and they were closing too quickly. I realized my pricing must have been too low. With the current prices I was quoting, I realized I wouldn’t achieve my vision of only doing high-quality, unique projects. So I increased my pricing and started charging more for design work. We now make a significant profit on design as well as construction and construction supervision. Adjusting my pricing increased margins, weeded out less desirable projects and now allows me to pick and choose the jobs I want.”

CLOSET FURNISHINGS & CABINETRY

Minimize Taxable Income

Keep more of your hard-earned money in the business by reviewing your estimated tax contributions with tax software or an accountant before the end of the year. If you’ve seen a lot of revenue without many expenses, you may end up paying the government more than you need to. Closing the gap between revenue and expenses by making some end-of-year equipment upgrades can help relieve some of your tax burden.

“We look at our taxes to see what the potential tax burden is along with money on hand, then determine if we can put money into retirement or a piece of equipment,” Jeff Davis of Closet Furnishings & Cabinetry in Riverside, Illinois, says. “One year, we knew we could write off a large business expense, so we got two new vehicles right at the end of the year, which was a really beneficial use of the money. We run what-if scenarios in our tax software and offset that tax if possible.”

(Be sure to check with a tax professional to see if you can benefit from this strategy.)

Tell us: What works for your business to keep your finances strong? Share your tips in the Comments.

Ready to make an adjustment to your pricing? Watch our webinar on proven pricing ideas.

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This story was written by the Houzz Industry Marketing team.