Why Most Subcontractors Aren't Profitable And What You Can Do About It 
Written by Shahn Ellis on August 7th 2019
Most Subcontractors I talk to are caught in a race to the bottom when it comes to pricing and getting work. I too fell into this same trap and it almost took me out. You see, the way we tradesmen think about business is all wrong.

I literally believed that all I had to do was be the lowest or at least competitive when it came to price and I would have all the work I ever needed. "Everything will be great" I thought to myself. Boy was I wrong! 

I was busy. Very busy! But I was also super stressed out and barely paying the bills for the business, let alone my own bills. Then one day it dawned on me. Everyone is racing to the bottom, trying to be the lowest price, yet almost no one was racing for the top and looking at ways to increase prices and margins. I asked myself why?

When we look at any market in any industry through the lense of the 80/20 rule, it all becomes clear. Did you know that 80% of the competition in your market and trade (probably higher) is fighting over the 80% of customers that only spend 20% of the money?

Once I saw this, it dawned on me how backwards I saw business. I then started investigating the subcontracting companies in my market that seemed to be thriving and this is what I found. While the majority of their competition was focusing on the 80% that spend only 20% of the total money, they focused on the 20% that spent 80% of the money.

Would you rather compete with 80% of the market for 20% of the money, or only compete with 20% of the market for 80% of the money? When I saw this it blew my mind. I had been doing it completely wrong and when I made the shift, business and life became much easier. When I looked back at how much money I had left on the table, I nearly threw up. 

Shahn Ellis

Shahn Ellis helps Subcontractors lock in big profits, end cash-flow issues, and get their freedom back. He has personally built and managed a successful 7 figure subcontracting business which he recently sold to Consult full-time. If you are a Subcontractor who wants less stress and more income, definitely reach out and request a free strategy session today.
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