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How to Compute a Price For Your Services
To correctly price your services, first realize there is no certain formula that will suit everyone's needs. There are basic accounting principles that you can take into consideration when you are figuring out what to charge for your service. First you need to look at your costs, what will you be paying for any supplies or materials if any for your service. Then you need to look at your time spent doing the job. You also should consider your experience or any degrees that you may have. The more years of experience you have the more that you can charge. If you offer a service that has competition, you should try to show how you are better than they are, like if you deliver faster, and/or your quality of work is better, your price is better, and there are other factors that you can include. It is vital that you can tell a customer what the services that you are able to provide can do for them. Let them know how your business can better serve them, what makes you unique. Do not under price yourself, this is not a good way to operate, and it can lose you prospective clients in the long run. If you charge way less for a service than others in your business so, people might think that reflects on the type of work that you do, or your expertise. You should sit down and write out a list of all the expenses you incur to run your business. Overhead costs, any production costs, time and expense that was and is taken to develop and advertise your business. Overhead costs are usually electricity bills, phone bills, internet costs, web site hosting if you have a website, or rent for office space, this is also charged for home businesses. Also included should be; insurance premiums, any miles, gas, and wear and tear on your vehicle, equipment depreciation, and even your marketing costs, just to name a few. Make sure that you cover even the smallest expense like ink for the printer, paper used, and stamps. All materials used should be included in your cost formation ledgers, receipts, and any other thing you use in your business. Add up all of your costs for a month; break it down weekly, daily and hourly. In running this business you should make enough money to run the business, pay for your time and service, and pay for any benefits like vacations and health, life, and dental insurance. Retirement savings should also be included, even bonuses for jobs done before the due date, or extra time put in on a job. Nobody else is providing this for you. You should be able to charge enough money either hourly or per job to cover your costs, if you do not then you need to rethink your pricing structure. Do not price too low, but do not charge too much, you have to reach a good median line. You should figure in taxes that will be owed as well and set up to pay these quarterly. Regardless of what you charge, you have to be able to vindicate your costs. Look at the high and low pay ranges and of your offered services, call some of these posing as a prospective customer, ask them what is included for their charge. Then look at the information you have gained, and compare that to your own service. This should help you to come up with a good price for your service. Never under charge for your service; and if you charge higher then some, but less than others; sell yourself to the customer by telling the customer why your service is better for the money. You have to respect yourself and your work, and do not underestimate your worth.
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More articles on running a
successful small business The Price Increase Switching Game Business Success: Keys to Business Success Is Your Price Dictated by Your Client Base? |
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