At the recent National Pavement Expo there was quite a bit of talk among contractors concerning pricing of sealcoating. In addition to the most-asked question of “How much should I charge?” was the annual complaint of sealer pricing to the end user being too low. We heard plenty of stories of contractors charging the same rate they charged three, five, even seven or more years ago, and the question is “How can any business survive doing that?”
Well, the answer is, you can’t.
Price is comprised of a lot of factors, the most important of which is your costs. And regardless of the “going rate” for sealcoating in your market, if you don’t know your costs you can’t possibly properly price your work. If you’re charging even close to the same rate you were even just a few years ago your company bottom line can’t be looking too good.
True, you can make up slimmer margins by volume work (though you’re working a lot harder for those dollars), and improved productivity can help keep the lid on prices. But contractors who refuse to raise their prices while their costs go up are destined to be selling their equipment in our Classified Ads section. Does this mean you have to always hold to a fixed price? No, because there are other factors – but it does ensure you know how much you’re not getting when you settle for less.
If the sealcoating industry – the sealcoating business – is ever going to get where it needs to be, where jobs are profitable and companies can afford to grow, then contractors need to price their work appropriately. So figure out what it really costs you to send a four-person crew out to sealcoat a parking lot (or a two-person crew to sealcoat a driveway). If you aren’t charging enough to cover that cost and make a reasonable profit then you need to raise your prices; if you say your market won’t accept the price you need then you need to define your company so your market will accept your rates. You need to differentiate yourselves so you can demand – and get – more for the work you do.
Did you miss the Sealcoating Webinar?
If you were unable to attend the live webinar, “How to Fight for Your Sealcoating Business,” presented by the Pavement Coatings Technology Council -- no worries. You can still access it for free at www.ForConstructionPros.com\10887974.