The Contractor Fight with Tom Reber

TCF994: He’s Drowning in Debt – Can We Save This Contractor's Business? | Contractor Intervention

Feb 27, 2025

A Pennsylvania contractor grapples with four years of negative net profit and multiple failed ventures. He learns that focusing on construction, mastering job costing, and strategic pricing can transform his financial situation. Insights reveal the importance of narrowing his business focus and utilizing effective sales techniques. The conversation also stresses the role of personal development and adapting pricing strategies to maintain profitability. A transformative journey that highlights actionable paths to success in the contracting industry.

52:31

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Quick takeaways

The distinction between gross income and actual profit is crucial for contractors to understand in order to achieve financial stability.

Implementing effective job costing and sales strategies is essential for improving profit margins and ensuring project viability.

Deep dives

Understanding Business Challenges

A general contractor in Pennsylvania discusses significant operational issues stemming from four consecutive years of negative net profits. The primary concern highlighted is the misconception around gross income versus actual profit, which can mislead contractors into thinking they are more successful than they are. Despite generating over half a million in sales, the contractor emphasizes the necessity of retaining a profit after expenses, and the struggle to achieve that has been ongoing. This scenario reveals how many contractors may find themselves in a similar plight, where high sales do not translate into financial stability.

Intro

2min

Navigating Challenges in Construction Business

8min

Navigating Business Evolution and Multi-Venture Challenges

2min

Mastering Construction Pricing and Sales Strategies

24min

Scaling Success in Contracting

11min

Negotiating Value Without Compromising Quality

4min

The Importance of Investing in Personal Development for Contractors

2min

In this episode of the Contractor Intervention, Tom sits down with Austin, a GC from Pennsylvania who has struggled with negative net profit for four years. Juggling multiple businesses, his construction company isn't making money. In this conversation, they break down the root cause of his financial struggles and uncover the number one thing that will immediately move the needle toward profitability. If you’re stuck on a financial hamster wheel, this episode is for you.

In this episode, we discuss:

[00:00] Introduction to Austin and his contracting business
[01:55] The various businesses Austin has been involved in over the years
[03:22] Breaking down his construction revenue and financial struggles
[04:51] The reality of bringing in revenue vs. actually making a profit
[06:19] Job costing, inefficiencies, and how small improvements can boost margins
[07:43] The importance of pre-job costing and estimating at a 50% gross profit
[09:37] The key problem behind four years of unprofitable business
[11:03] The dangers of chasing too many business ventures at once
[12:32] Why Austin needs to go all-in on his highest-earning opportunity: Construction
[13:59] The limiting belief around raising prices—and why contractors CAN charge more
[15:56] How sales training can make the difference between profit and loss
[17:54] Austin’s struggle with pricing and how small adjustments can add up
[19:15] The right way to approach pricing and bracketing in sales conversations
[22:33] The role of pre-selling and setting expectations with homeowners
[24:52] Austin's current bottlenecks: too much fieldwork, not enough sales focus
[26:44] The impact of hiring a project manager or admin assistant
[28:39] Building a strong subcontractor network to scale up
[30:33] The common mistake of trying to serve too many low-dollar clients
[33:02] Two key lessons: commit to 50% gross profit and invest in sales training
[36:43] Why being emotionally unattached to sales outcomes is a game-changer
[40:59] How a contractor can completely transform their financials within a year
[44:53] The long-term benefits of sales mastery and strategic pricing
[50:09] Wrapping up: Key takeaways and next steps for Austin
[51:37] Where to find Austin and connect with his business

Resources:

⚔️ WAR ROOM

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🎧 Get on the podcast!

https://thecontractorfight.com/intervention