🔥 Hot topic: Prices for your work 🔥

[John Talman]

In cutting some clips from the Good Contractor Podcast, it never ceases to amaze me how every few episodes we get on the "you're not charging enough" conversation.

I put an example from Paul Jamison below when he first started his business (see below for the clip).

Some have shared with me during interviews over the past few years that it sometimes came down to being afraid to have "the price conversation" with customers.

How often do you look at what you're charging? Are you changing prices each year? More often? Less often?

 

[the_ladyplumber]

Being in the service industry and basing most of my jobs off flat rates, it’s pretty easy to see your profit off each job in the program I use (Jobber). It’s a fairly new feature within the past couple years and it’s made a big difference. I find I’m changing many of my rates often, that have materials as a high cost in the line item, due to consistent inflation.

 

[KAyersETC]

I spent 15 years in food distribution, and we always preached keeping a low stale percentage: product that went out of date. However, if that number was effectively zero, we were missing sales. If you are not pushing the envelope on price, you are missing profit. If you have 100% retention rate, you're not charging what you're worth. A good rule of thumb is to climb in increments. The first number of a cost is always the one that matters. There has to be a balance in what you charge, and how many people walk away. Most people don't think outside of $100 increments and the ones that do, think in $50 increments. $125 might as well be $145, for example. If you have a 15% increase in cost, you can afford to lose 10% of your customers. 100x125= 12500, 90x13050 in this example. Maybe you keep everyone, and then you're at even more money (and consider a higher number again), but you never know where that line is until you find some rejection.