So before doing the actual calculations by comparing the actual renovation bills send in by my contractor with the actual quotation, I was basing the profit margin on a very rough estimate, and they are as follow...
First Project - $40,000
Estimated to earn about $1,800 in commission.
Second Project - $37,000
Estimated to earn about $2,500 in commission.
Third Project - $34,000
Estimated to earn about $2,500 in commission.
.... evidently, after looking at the profit margin for the first project and comparing it to my other projects, I just did not really want to do that project anymore but somehow tried to convince myself that I would run it for the experience and also as a sign of appreciation for my customer who decided to give me a chance.
The experience so far has been abysmal because my clients are very indecisive and don't trust me enough to actually make design decisions for them, so there ends up being a lot of last minute changes and a lot of questionable taste in colour choices for their homes.
But back to the topic at hand.
So once the bills starting coming in from my contractors, I decided to tabulate the prices from the bill and then minus that amount from the total quotation, including all the additional cost my customers might have requested mid-reno, and the new figure was really surprising because it ended up being a lot higher that I had thought.
First Project.
Old Commission - $,1800
New Commission - $3,200
Second Project.
Old Commission - $2,500
New Commission - $4,500
Third Project.
Old Commission - $2,500
New Commission - $4,500
Upon seeing those new figures, I was shocked, because it is so much higher than my original calculations. And I have to admit, prior to this, I was contemplating leaving the company and finding a new career because the commission I was getting from my projects were way too low, and I also didn't want to find and run more projects than I can handle, so I really wasn't making enough money to justify staying in this line anymore, but the new figure proved otherwise, and I was so happy about it for weeks,
I was going about, telling my colleagues how much money I was making from the projects, even going so far as to share with my boss how much profit I was making, everyone I told were impressed with the amount and they told me I was earning at a very safe range, that I should keep it up, Seeing how much I was making, I started to become really lax with the cost of several additional services I required from my contractors because what is making a hundred bucks less when I am making $3,200 and not the original $1,800 I had anticipated.
Well, fast forward to today, I decided to go check the new bills that had arrived and chanced upon this little thing called GST that was being charged by one of my suppliers, and in that instant, everything started to fall apart.
I quickly went back to the calculation and realized I had totally forgotten to exclude the GST amount in the original quotation figure when I was calculating my profit margin figure weeks ago, that means I had calculated an additional $2,000 to $3,000 for all my projects that was never supposed to be calculated and that means I did not earn more than I had anticipated at all, my profit margin has remained the same, I am still earning peanuts.
Just when I thought I was going to be receiving a profit margin of at least $10,000 by the end of the year, it turns out I had just miscalculated and I would end up only be raking in about less than $7,000 total if I don't incur any additional cost.
Earning only $7000 in 12 months is an extremely dangerous amount and I am now honestly starting to worry about the sustainability of this career. I mean I have worried about it in the past, but looking at the actual figure, it is really really depressing, and when I think of the amount of stress I have had to endure for the $1,800 project, the amount of stress my customer has given to me, and I am only earning a measly $1,800 from them, I should have my name legally changed to Sharity and be legally recognized as a pink fucking elephant.
Update :
So I just realized that I have miscalculated my earnings for my third project by a lot. In the beginning, I thought I was going to earn at least $2,500, but then a bill for the project came in and I found out I had completely forgotten to include that into my costings, an additional $2,500 costing.
Right now, this third project is the project with the lowest profit margin I have ever had, so much more lower than my small kitchen renovation project, only a meager $1000, that is insane. I cannot believe I was able to miscalculate by such a huge margin and thought that I would be earning the most from that project.
That means my total earnings from this 3 project is roughly only $5500, I'm a fucking idiot. The miscalculated $4,500 profit suddenly feels like a huge joke to me now.
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