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5 Reasons Why You Have Low Margin Jobs

Erick Vargas

We all know that time is not a determinant of how successful our business is. There are thousands of people who have engaged in business for years, or have been employed for years, yet still just generate enough income to pay the bills. Considering that success is earning more than enough to pay our bills (since it is subjective), increasing our margins does not necessarily mean increasing the volume of our clients or jobs. In some successful cases, it just means knowing how to identify a high margin job from a low margin job, and a little bit of knowing when to receive a low margin job to maximize profitability.

When we think of low margin jobs, the most logical definition that comes to mind is that those are jobs that cost us a lot and leaves us with lower profits than what we could generate from getting high margin jobs, or what we would like to call premium jobs / clients. It is true that we can somehow control our profit margins via the system that we follow during operations (like offer bundles of low and high margin products to customers or study patterns of high profit sales, etc.), but that could be more troublesome rather than just hitting that right, premium job, the first time around.

To address this, let us first understand some of the few possible reasons why we easily come to rest on low margin jobs.

1.) We don't network with the right people

We can have plenty of clients. But if these clients are just our neighbors in the community, or friends and family who are most likely to ask for discounted rates, then plenty in this sense is not good. The right people will help us progress and go up our profit margin. Being accepted into one premium client / job is already a leverage towards more premium jobs because you get to be connected also with their network.

2.) We provide products and services that have high competition

Common jobs that bring us high competition can generate low margins. For one, price technically decreases the higher the competition (perhaps because they know that we can easily be replaced). These may provide us with a steady stream of income, but unwaveringly low also. If we are offering services, we should strive to improve our skills, perhaps skilled that are in demand among high-margin jobs.

3.) We don't have much on our portfolio

This is a common struggle for first timers or start-ups. As we are still building our credibility, getting a high margin job would remain to be a steep mountain to climb. Among experienced people, the quality of experience matters as well. Even if our portfolio comes close to a hundred experiences, if there aren’t any impressive ones, then there isn’t really much experience.

4.) Our professionalism is not premium

To say it bluntly, if our professionalism is substandard or perhaps inconsistent, no premium job would let us stay in for too long. Professionalism includes how we respond to our colleagues or

clients, how fast we respond, how we retain our composure in the face of pressure, and many more.

5.) We don't really understand our clients' needs

One of the common reasons why some clients in general reject us is that we don’t have a pure understanding of their vision and goals. This is essential for us to be able to create initiatives. Most jobs prefer less supervision (of course, since we are being paid to work). If companies see our initiative, we become assets. Otherwise, no one wants a liability.

If we can address these reasons the next time we look for a job, then we have made our first step away from living on low-margin jobs.

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