How Far In Advance Should You Be Booked Out?
Every builder’s different. Some have a full pipeline for the foreseeable future, others are seeking to keep work up to their guys asap. Maybe try this…
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Depending on how you run your business, your pipeline could be plump and over-subscribed or leaner with greater availability to take on new projects.
Your marketing and networking over the last 6 months will determine where you sit on that scale.
Unsurprisingly, good marketing drive loads of enquiry.
See how to win custom design jobs more easily
So: How Far in Advance Should You Be Booked Out?
Speaking recently with a builder, he was over the moon about being booked out 2 years in advance.
I was curious about how he’d achieved that.
We spoke about his marketing, his team and then about his pricing.
We then estimated a project worth about $1M with him in ProCalc and agreed his margins were robust.
We then estimated another job for $300k with him and discovered he was, in reality, losing money on those jobs.
That is, he was under-pricing his services because he applied the same margins to both large and small jobs.
No wonder he was booked out so far in advance!
He was 20% cheaper than other builders for smaller jobs.
See How to Avoid Under-Quoting with ProCalc
How Full In Advance Should Your Pipeline Be?
Roughly, based on builders’ pricing we see across Australia, we’d argue 3-6 months.
We say this because if you’re booked 12, 18 or 24 months in advance, you’re probably under-charging.
So, if you’re booked out way in advance, test it by putting up your prices by 5%.
Then, a few months later, another 5%
And keep going until your pipeline is full for the next 6 months (or whatever timeframe you feel comfortable with).
Being booked miles in advance is bad for your business and bad for your bank balance.
You will also need to manage any price increases before you start a job so far in advance.
If you’d like to test your pricing against market rates, book a free ProCalc trial.
You Might Also Like:
- Builders, Get Your Pricing Right Every-time – No More Under-Quoting
- Transform Your Building Business in 43 Mins (webinar)
- How (& Why) to Charge for First Client Meetings
- Take a Free Trial of ProCalc
- Stop All Free Client Meetings – Charge Upfront
- Want more tips like these? Attend the Webinar: Work Smarter, Not Harder
Richard Armstrong is a former registered builder who recently interviewed hundreds of experienced Australian builders to identify how they best manage clients, budgets and profitability.
