dummies guide to pricing?

[nailer]

It is tempting to consider what others are charging and what people say they are prepared to pay when pricing. However, this has led me in the past to charging too little. If you work out the costs then work out your day rate from that, chipping away at what you need to charge only leads to grief. Clearly the money you knock off does not come off the whole budget proportionately. 100% of it comes from your profit. Do that a few times a week and your business plan soon goes astray. Stick to the pricing target as close as you dare. Tight-wads and difficult-to-please customers should magically melt away. The vacuum will be filled with customers who appreciate that not every single tree surgeon can possibly deliver exactly the same standard of work. If you can show clients that your work and service will be top notch there are enough people out there willing to pay for it. (Telling people you are good is not as effective as showing them.)

 

Dave, I wrote that before I read your post. Its not directed at you. Your approach has merit.

Edited August 2, 2009 by nailer

[educated arborist]

in the construction game they look to make 5% profit.

 

I don't ,ean to digress but......

who TF told u that? i have some close friends who are rather 'involved' in the construiton industry: one for the uk's largest home builder and the other on big, big civil contrtacts. If either of their margins fell to 5% they'd cease construction; oh yea; thats exactly what the uk's largest home builer did, actually it was when there margins fell below 15% and we are talking 15% on billions!

In my opinion, the smaller the business the larger margins you require, sort of as insurance, as for margins on jobs you have to weigh each job up individually, i try to predict how much any 'down time' would cost me on a job & how likely that down time could be and charge accordingly. when i was working as a sub-contract climber a firm i worked for was asked to qote for a job 180miles away and it involved some considerable hire costs, 1 or 2 days of down time would've cost 1000's but the whole job, if all went 2 plan sould only take 2-3 days. They piled the money on & as it hapened all went well.

Edited August 3, 2009 by educated arborist
adding

[Mesterh]

Just a mate (commercial contract manager)who works in the utility and construction game.

 

He works on £50M plus projects so I believed him

[Adam]

DO NOT ask at the time of quoting, IMO, thats unprofessional.

 

thats what i think too. really unprofessional.

[Mark Bolam]

When I worked for Alfred McAlpine, they would occasionally 'buy' jobs to keep the staff busy till things picked up.

 

Look what happened to them, though....