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
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.
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).
