How do Your Fees Stack Up Against Other California State Contractors?

Once you finally become a California state licensed contractor, there are a lot of important choices to make and details to handle before you can successfully launch your business. One of these involves choosing a specialty and setting your fees.

If you were to ask a dozen different established contractors about their prices, and the philosophy behind them, it’s likely that you would quickly find that you had a dozen different answers. But since setting your fees is such an important part of running and growing your business, it’s important that you get off on the right foot.

Here are a few tips you can use to set your fees relative to other California contractors in your area:

Know what other licensed contractors are doing

A good starting point for setting your contracting fees is to simply figure out what your competitors are charging. The more you know about the fees of other California State Licensed contractors in your area, the more you can tell what’s appropriate – and what sort of bids and proposals your customers are looking at. Don’t be shy about asking your colleagues how they set their prices. While some might not want to tell you, most aren’t going to be bothered by sharing some general information with someone who isn’t a direct competitor.

Don’t make a common mistake

If there’s one thing that most new California state licensed contractors do in the beginning that hurts their business the most, it’s setting their fees too low. The temptation, of course, is to discount your prices and try to find lots of new projects quickly. That certainly makes sense, and there isn’t any harm in aiming for the low end of the market. Go too low for too long, however, and two things start to happen: First, you attract the wrong sorts of customers (bargain-hunters who will never pay more for your work), and second, you gain a reputation as a “cheap” contractor who probably doesn’t do great work.

But don’t price yourself out of the market, either

Naturally, the same warning applies to setting your fees too high initially. Until you have a list of satisfied customers to vouch for you, it’s best to stay on the lower end of the price scale. That gives new clients an incentive to try you out, and makes working with you less of a risk.

Once they see what great work you do, it’ll be much easier to raise your fees and get paid what you deserve!

Are you ready to take the next step in your career and become a licensed California state contractor? If so, then CSLS has a number of options to help you reach your dream. Click here now to check out our classroom and home-study exam options.