Indicators you are not charging enough

I don't think I am getting proper compensation for what I'm doing. What are some key indicators I can use to confirm this?

lol, I think a lot can relate to this! IMO Adc account continues to be in the red or empty, paying out of pocket for materials when jobs are coming in. I'm sure someone will break it down, but If you have to pay to go to work that's a key indicator you're not charging enough. My wife takes care of the books and she always lets me know when I do a charity job!

Numbers don't lie. Never do. Figure out how many hours you are putting into a job, minus all expenses,putting a little aside for growth. Are you happy to be taking that number for your pay?

Even if you are, signs you could be charging more could be your close rate. Does everyone who calls hire you? You need to raise your rates until you are working a comfortable amount and making a comfortable amount.

If you are not in the ballpark of your competitors' pricing you should start there. If you are you might not be able to raise prices. It might boil down to productivity.

Figure out how to do a job a day quicker or get rid of the gas guzzler. Raising prices isn't the only answer.

In my opinion charging a premium requires you to do something different(better) than your competition.

You can charge what you want, bottom line if the community your working in has no money chances are you're not going to make any.

It's hard to get used to the fact: You don't want every customer. Some you are going to give the price to and they will not call back. THAT'S OK.

I believe the barometer used to be if you are landing every call you are priced to low, but if you are landing approximately 3 out of 5 then you are priced correctly. Good in theory but not in fact. While the ADC industry is very price sensitive, you still need to know your business, and be a good sales person.

My recommendation is to go see a CPA and have them help you figure out what your true costs to operate your business are, especially your vehicle costs since they are your largest everyday expense. A good CPA will know the important questions to ask. The SBA is another good option to use to figure this out.

I appreciate the input. I have the luxury of not having to depend on these jobs as a means to survive but I don't want to be under cutting the guys that do. I'm getting 80% of the jobs after the quote so I could probably dial it up a bit.

Solid advice there. My CPA has helped me a lot.

Okay guys, how does your CPA use a portion of your house as a business deduction? There is almost as much square footage in my home

that is used for business as there is for personal. I can't find any deduction for business use of a personal vehicle either. I'm not

real sharp at reading my end of the year statement but I swear that my CPA has got a second job with the IRS.

Paul, for a portion of the house to be used for business it has to be %100 business. Setting gopher traps in the bathroom doesnt count if your wife also curls her hair in their.

As far as personal car, you deduct mileage.

I am not trying to cheat Uncle Sam. We had a double office built in the basement along with a restroom that is used exclusively by

secretaries and technicians. We have a bedroom that is an office and my wife's office is in the living room. Three quarters of our

garage houses only work vehicles.

Oh, and having your company pay you 57 1/2 cents per business mile traveled is way more fun than deducting mileage.

Paul, I'm like you in that I have never tried to cheat Uncle Sam. My CPA is about as sharp as they come when it comes to the tax code. We've been doing business for more than 25 years. She found the exemption for the home office. Every year about mid December she would call me for preliminary numbers, then between Christmas and New Years Eve she would notify me if I needed to buy any last minute items that the business required so I could lower my taxable income. I liked the fact that she was only a phone call away for my business and several other small businesses in the area. She was a tremendous asset to my business.

Gabby, I know whereof you speak. We had a CPA like that who retired and recommended us to a company that should have retired. We have

since had a very expensive company that wasn't worth it and now have a company that isn't cheap either but is really great to deal

with, except that I don't know if all of our legitimate deductions are covered. We are a much larger business and it becomes more

difficult to stay on top of things, but I try.

Thanks for the good information guys.
Paul, my tax lady allows me to write off whatever percentage the office is compared to the house on all the utility bills. For example, if the house was 1000 square feet and my office was 100 square feet, then I could write off 10% of the electric bill. Like stated earlier by Throwback though it has to be used 100% for the office.

I need to talk to the tax lady again though because I am trying to figure out how to charge for equipment. How do you gentlemen charge appropriately for all the specialty materials it takes to run a job? Thanks, chancey

Chancey, that's exactly why the tax outfit we have right now is so cool. Lets say I buy a couple dozen chimney caps. I give the bill

to my daughter and she has a specific deduction file for things like caps. She sends the information in and it's all put in its

proper classification. It's all done on the computer and its fast, easy, and accurate.

Throw back you either need to quit doing your own taxes or fire the guy who is. Whatever the case you definitely need to quit giving tax advice because you can't be more wrong.

If you have an attached garage and you use a portion of it for business you can deduct that percentage.

As far as an indicator that you are not charging enough, well a good indicator that you are not earning enough is the hotness scale... in other words if 6/8 out of 10 women you see in your town are hotter than your girlfriend well you clearly aren't earning what you should

Now he tells me....

in some areas I am charging more than my competition...others they are charging more...I tend to charge more for what I do most which is moles and voles

but really I kinda know what my competition charges...but a lot of me doesn't really care...

That's not what I said. I said the area has to be a designated business area. I can find the law later from the irs, but to reiterate the AREA, Not you house, has e to be a designated area. As is if I have a room that is MY OFFICE, I can deduct that square footage, but If I happen to do my paperwork in the kids playroom, that is not considered tax deductible.

I see where we got crossed. I meant the portion of the house being used has to be 100% business to deduct, not 100% of the house has to be business to deduct a portion. Thought I was clear enough

Regardless of how you say it your wrong. In Paul's example of 75 pct of his garage being used for work he can deduct 75 pct of the square footage of his garage

According to our CPA in Pa. you can deduct 1/5th of your household expenses for office space if you are a sole proprietor doing business from your residence.

Still, from My,understanding it has to be a DESIGNATED 75 percent of his garage. Not just all his stuff taking up 75 pct. Otherwise the peanut butter and marshmallows in my pantry are deductible space.

I have a spare bedroom that has been converted into an office. The square footage of this room is a percentage of the total square footage of the home. That percentage is used for tax deductions on taxes, insurance, utilities and internet service. I have been with my current CPA for 6 years who uses this formula as well as my previous one doing it the same way. Below is a link to the IRS website with links on how to calculate the deductions for home offices. Hope it helps.

http://www.irs.gov/publications/p587/ar02.html#en_US_2014_publink1000226294

It certainly does. Thanks for the posting, Mike.