How do you go about pricing your services for profit?
Communicating cost increases to your clients aren't the easiest yet it has to be done as a business continues to grow.
Thoughts?
Forum Discussion
57 Replies
This is one I would love more feed back about. I just went from a 3 person team, me and an installer, to a 5 person team. Now I have a person answering the phone, making the schedule and doing gofer tasks for me as well as an install team that can work without my labor contribution. Now that I am off the tools and the phone I have time to sell way more than I ever have before. However, my payroll cost is way up and my profit has disappeared. I raised my prices today but worried how to tell my long term clients.
It's not easy to tell the clients you're raising prices but it has to be done. you can't stay in business while losing money. most people realize that the cost of everything has gone up and it had to be passed onto the customer unfortunately.
I've done similar this year in that I am stepping away as much as I can from the active production side of the business, and like yourself we're seeing payroll really bite, but I think its all part of what you might call growing pains in our industry. You have to find a sweet spot where the ratio of production to non-production staff works for you. I think for a small business like ours the ratio is around 4:1. In practical terms that looks like 8-9 employees on production with non-production being myself (production manager, sales and marketing etc) and my wife (admin).
There’s a sweet spot you need to find after hiring full time assistants.
Better customer service will create new customers and with the right protocols and setup you can increase income without increasing your customer service budget. Virtual assistants are a good way to keep that budget down as well. I use virtualsolutionsmb.com
Finding a VA is top of my list right now. Thanks for your answer
I utilize a budget to make sure we are properly recovering costs and passing them on to our clients.
Smart approach. A solid budget can really help with staying on top of costs for sure. How do you typically communicate those price adjustments to clients?
Always explain reasons why and include your team as part of the driving force as usually they are!
price transparency 🤌 i love that. Not only does it foster understanding across your whole team but can potentially empower them, improve accountability, and increase satisfaction. 🙌
