Pricing
Pricing questions, answered.
What to charge, when to raise, and how to say the number out loud.
How much should I charge?
Enough to cover all your costs, pay yourself a real wage, and have 15 to 20 percent left over. If your current price doesn't do that, it's too low.
How often should I raise prices?
Every year, automatically, at least three percent. More if costs jumped.
How do I price a service I've never offered before?
Cost plus a margin you'd be embarrassed to share, then adjust after ten jobs. New services should be more profitable than old ones, not less.
Should I charge hourly or flat rate?
Flat rate whenever possible. It rewards you for being fast and protects you from explaining every minute.
Should I offer financing to customers?
If your average ticket is over $1,500, yes. It raises average ticket and close rate enough to cover the fee.
Should I charge a deposit?
Yes. On anything material-heavy or scheduled out more than two weeks. 25 to 50 percent, non-refundable inside a window.
What if my competitor is cheaper than me?
Let them be. Sell the difference, not the same thing for less.
Should I put prices on my website?
Starting at prices, yes. Full price lists, only if you sell commodities. The middle, 'starting at $X, typical $Y', wins for most trades.
How do I handle scope creep on a job?
Stop work. Quote the change in writing. Get a yes before you continue.
Should I charge more for emergency or after-hours work?
Yes. 1.5x to 2x your normal rate, no apology. Your nights and weekends are not normal pricing.
Should I offer tiered or package pricing?
Yes. Three options, with the middle one priced as the obvious answer. Customers pick the middle more than half the time.
How do I justify charging more than competitors?
Stop justifying. Show the difference. The customer who needs justification isn't your customer.
Should I grandfather long-time customers when I raise prices?
For a defined window, yes. Forever, no. 'You're locked in at the old rate through year-end' is generous. 'Forever' is a tax on your future.
Should I charge for travel time?
Bake it into your minimum or add a clearly stated trip fee. Don't pretend travel is free. You're paying for it whether the customer is or not.
Should I have a service minimum?
Yes. Set it at the smallest job that's actually profitable for you to leave the shop. Below that, you lose money even when you 'win.'
How should I price recurring or subscription service?
Annual price divided into monthly payments, billed automatically, with a real discount vs one-off. Predictable revenue is worth a real number off.