How much to charge?

This is a particularly bad time of year for many people in this business, when they realize that they are not making enough money to pay themselves a salary, pay their expenses and pay Uncle Sam and co. That's sad because we delude ourselves into thinking next year will be better, but unless we sit down and figure out what we need to charge for our services we will be going deeper into that dark hole.

I believe I found the solution in a book called, "HOW MUCH SHOULD I CHARGE - Pricing Basics for Making Money Doing What You Love." I found it at the public library. The author is Ellen Rohr who has an MBA from Penn State (I Think) and runs a Heating A/C Business with her husband. It's basic economics for a service business and is written so everyone can understand. Shows you a simple formula for creating a selling price. It's an easy read shows budgeting and sales forecasting. It shows you how to forget the "going rate" or "what the market will bear!" Do what you love and make lots of money. It's $19.99 plus S&H, you can order it from Barnes & Noble, Borders or thru your favorite book store. It's a book you can sit down with pen and paper and figure out what you should charge - not what the other guys in town charge. If you get it - you'll open your eyes to real world economics and be a very happy camper! If you don't you'll be floundering in a sea of confusion. This is for newbies and oldies, for everyone - even the folks thinking about getting into the biz. It's the best, easiest, reading business book I've ever seen. If you don't do anything else tomorrow get this book, it'll turn your head around!
 
Thanks I. J.

the book should really come in hand here, there is a exhaust cleaning company that is killing the market and is leaving way to much money on the table.... just waiting my time, so he will go out of business or raise his prices, or not clean right and the place goes up in flames...

thanks again for the info...

Matt
 
Hi Matt,

I have never seen anything that is so right on for our business and we have been doing this going on ten years. This book gives you such a sense of control you can't believe it! It takes the guesswork out of pricing services and shows how to make a living, pay bills and put some money away. It'll really help!
 
A couple additions here...

If your serious about making your business work for you, you need to put down the wand for a bit and write a plan (business plan, goals, ect). People come into this business with the conclusion that as long as they have money in their pocket at the end of the day all is well. This I suppose is true if your just in this for your beer money every weekend but geez.. there's far more potential why not make it the best you can? It amazes me how cheap some guys are willing to work. You need to ultimately make a "long term" decision. Where will you be in 5 years? Are you working simply to get by and underbidding jobs simply to get work? By doing this your setting yourself up for failure and IF your still in business at the 5 year mark you will be doing the same thing you are today... is this considered a SUCCESSFULL business?? I think not.

Growth takes capitol... remember this the next time you put a bid in on a project. Think about more than the present.... such as retirement! Otherwise your probably better off working for someone else than being your own boss :) !

Have a good one!

Greg Rentschler
TimberSeal, Inc.
 
hey MATT

gamble the $20 and put a copy of that book on his front seat.
lol
Greg is right without a map how do you know where you are?
Without a trail behind you how do you guage how far you have come?
An empty sea can be a very lonely place and you might give up hope.
Any step twords a goal is one step ahead. That's something to be proud of.
Know where your money is.
 
Hi Ron.


What did you think of the book? Did it show you how and why to price your jobs? I think it will really turn our business
into what it should be, a profit machine.
 
I like your Idea ron p, The funny thing is, the guy that I have working with me trained this guy....

I ask all people that look for bids, to ask this guy what nfpa stands for.... I am yet to find out the out come on this...

Matt
 
Greg

I agree with you 100%



You have to have a plan. Make list, write down goals. Plan ahead
 
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