H
HIMbeats
Guest
No offense to the OP....but why does this question come up every few months, year after year? No one can tell you what you should be charging in a service business. As engineers we run a SERVICE business.
If I were a plumber I would not get on the plumbing forums (I guess they have these) and ask what I should be charging customers to clean out their pipes. One guy in London may charge one price and someone in New York will charge another for pipe cleanouts. The sooner we all start realizing that this is a business the better. Sure I love to mix tracks, but the bottom-line is that I run a business plain & simple. It pays my bills. So that being said you have to run it like a business.
You figure out your pricing like every other service business out there.
1. Find out your cost (equipment, insurance, your time, avg. mix time,etc.)
2. Find out what your competitors are charging (not the guy miles away from you but in your own area).
3. Next you find out the perceived value to the customer (what your market will bear...what the customer will pay you).
4. Lastly you decide a MIN/MAX (this is your minimum amount of profit you will except & the amount of profit you would like to have on every job)
Your price is based on this. There are lots of variations on this, but for the most part this is how you do it.
Each job is different, but you should now know the lowest you can go and still make a profit for your service. Let me say it again PROFIT!
Okay, notice the last one (MIN/MAX) is your profit! This means that you should always be working for some sort of profit. If you paid NOTHING for your equipment, you pay nothing in ads, you don't want to be paid or you do not value your time, then it is okay to charge nothing or next to nothing I guess. But if you pay for software, equipment, your salary, etc., then it is pretty easy to have a dollar value for your service in mind. Now granted this will change over time and through out the year as you try different things(promotions, sales, etc.), but that is just part of business. Bottom-line you need to make a profit or you are not working your are doing volunteer work, which is completely different.
It does not matter if you are selling hot dogs on the corner or mixing, it is all the same. Figure out your true cost and operating expenses, decide your target profit, set your price to hit that target....period. Don't worry about the guy selling mixes for $5 dollars or the guy selling his mixes at $5000 a pop. Worry about your target profit for YOUR business and try to hit it!
Just remember McDonalds is NEVER worry about another business that sells burgers cheaper than they do. They only focus on quality & brand name. Their rep and their quality of product, keeps the doors swinging open, not their prices alone.
If I were a plumber I would not get on the plumbing forums (I guess they have these) and ask what I should be charging customers to clean out their pipes. One guy in London may charge one price and someone in New York will charge another for pipe cleanouts. The sooner we all start realizing that this is a business the better. Sure I love to mix tracks, but the bottom-line is that I run a business plain & simple. It pays my bills. So that being said you have to run it like a business.
You figure out your pricing like every other service business out there.
1. Find out your cost (equipment, insurance, your time, avg. mix time,etc.)
2. Find out what your competitors are charging (not the guy miles away from you but in your own area).
3. Next you find out the perceived value to the customer (what your market will bear...what the customer will pay you).
4. Lastly you decide a MIN/MAX (this is your minimum amount of profit you will except & the amount of profit you would like to have on every job)
Your price is based on this. There are lots of variations on this, but for the most part this is how you do it.
Each job is different, but you should now know the lowest you can go and still make a profit for your service. Let me say it again PROFIT!
Okay, notice the last one (MIN/MAX) is your profit! This means that you should always be working for some sort of profit. If you paid NOTHING for your equipment, you pay nothing in ads, you don't want to be paid or you do not value your time, then it is okay to charge nothing or next to nothing I guess. But if you pay for software, equipment, your salary, etc., then it is pretty easy to have a dollar value for your service in mind. Now granted this will change over time and through out the year as you try different things(promotions, sales, etc.), but that is just part of business. Bottom-line you need to make a profit or you are not working your are doing volunteer work, which is completely different.
It does not matter if you are selling hot dogs on the corner or mixing, it is all the same. Figure out your true cost and operating expenses, decide your target profit, set your price to hit that target....period. Don't worry about the guy selling mixes for $5 dollars or the guy selling his mixes at $5000 a pop. Worry about your target profit for YOUR business and try to hit it!
Just remember McDonalds is NEVER worry about another business that sells burgers cheaper than they do. They only focus on quality & brand name. Their rep and their quality of product, keeps the doors swinging open, not their prices alone.
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