Kelly Robbins
 
 
 
Determining What Price to Charge for your Services
Copyright (c) 2007 A Marketing Connection
 
Determining what price to charge for your services can be
difficult, especially when initially starting your
business. With home businesses ranging from landscape
contractors to massage therapists, writers to caterers,
pricing your services are unique to your particular
industry. However, there are some common things all small
business owners should do before setting their prices.
 
1) Know your competitors. How does your company stack up
against them? What do they charge? Do you have a strong
market niche, or specialize in a particular field? This
allows you to set your prices higher than others.
 
2) Evaluate your business plan. How much do you have to
charge to break-even? How much do you need to charge if you
want to eat dinner too? It's important to know the bare
minimum you are willing/able to go.
 
3) Are there pricing guidelines for your industry? Contact
a trade association or ask someone who has been in the
business for several years. You will need to do some
research before you just give out rates. How you present
your pricing will also influence sales. For example, rather
than charging $150 an hour, you can charge by the project
(keeping your hourly rate in mind of course). Some
customers may balk at your hourly rate, but may think the
cost for the project is right in line with expectations.
 
4) Find a mentor. Some trade associations have mentoring
programs available to new business owners for guidance.
Most people are flattered that you called to ask their
advice, and like to be considered a veteran or expert in
their field.
 
5) Let the customer speak first. When bidding on a project,
it is always a good idea to try to get the customer to
speak first. Oftentimes by simply asking, "What price range
did you have in mind?" you can get the customer to open up
to what kind of budget they have. As a response you might
hear, "Last time we did this we paid about..." This will
allow you to build your proposal within their guidelines.
 
6) Don't give a quote on the spot. Always try to evaluate
the project away from the customer. Once you sit down and
take a look at it you may see that there will be more work
involved than you first anticipated. If you have already
given a rough estimate, it is hard to go back and raise the
price.
 
7) Offer different pricing and packages for customers to
choose from. This will influence sales by giving the
customer a choice. For example, having services that range
from the low end up to the high end allows customers to
test your business. They may not be willing to purchase the
big-ticket services you offer until they are sure of the
quality of your services.
 
I spoke with Michael Joersz, owner of Blueline, Inc., a
landscape contracting business. While Blueline, Inc. now
has its own facility, located on a six-acre site in North
Denver, the business began as a home-based business over 27
years ago. I asked Michael what he thought was most
important in determining his pricing; both back when he
began his business and now.
 
Michael said, "Before I do a bid, I need to know what it's
going to cost me to do the job, and how much profit I need
to make. Even though my bid isn't always the lowest priced,
I always take the time to educate my customers on what they
are going to get for their money. If another bid comes in
significantly less than mine, we may not be comparing
apples to apples. Sitting down with the customer and
reviewing the bid in detail helps ensure they clearly
understand what they are receiving.
 
There are many factors to evaluate before determining what
price to charge for the services you offer. I am a
freelance commercial writer, and I spent months talking
with other writers, researching other companies on the
Internet, and working with several trade associations in my
industry before producing my fee schedule.
 
If your true desire is to position yourself as a
"professional" and not just a body that can do the work, do
your homework before you begin. Someone once told me that
it is always better to start high, and then reduce your
price later if you need to. That advice sounded good at
first, but when I looked at it further I realized that
pulling a high dollar amount out of my ear in the
beginning, because I don't know what to charge, doesn't
mean much if I can't back it up later. And once a customer
is accustomed to negotiating price with you, they will
never stop.
 
 
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Author of Healthcare Copywriting Secrets Revealed, Kelly
Robbins is an award winning copywriter and marketing
coach/consultant. She also publishes The Healthcare
Marketing Connection
e-zine on healthcare marketing tips. Contact Kelly to
receive her free report, "5 critical things you must know
when writing for the healthcare industry" -
info@KellyRobbinsLLC.com or 303-460-0285.
 
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