How to Price Business Services The reason you went into business selling services to customers was to make a profit. If you were giving away your services for less than cost, or just breaking even, you'd be operating a non-profit venture – or a business that's likely to fail. There are a variety of components that factor into whether or not a business is profitable, including location, leadership, market demand, competition, and so on. Service businesses can range from a sole proprietorship consultancy to mid-sized businesses with several hundred employees, some of whom go out to customers and perform anything from cleaning homes to providing information technology expertise to large corporations. "It can just destroy you if you don't do it right," says Charles Toftoy, an associate professor at the George Washington University School of Business and Public Management. Pricing Your Services The good news is you have a great deal of flexibility in how you set your prices. Cost-plus pricing. Materials cost. U.S.
How Much Should I Charge Clients? Image credit: Shutterstock For entrepreneurs, pricing is a four-letter word, especially when you are a service-based company. Since starting my business, figuring out what to charge my customers has been my number-one problem. It is challenging to put a price tag on intangible items such as connections, knowledge and time. Jamie Walker, founder of SweatGuru and Fit Approach, writes: “Determining pricing is one of the toughest things there is to do; its part art and part science.” When you provide a service, you have to find an intersection between where you feel adequately compensated and what is the highest amount your clients are comfortably willing to pay. Related: How to Create a Competitive Pricing Strategy I know, easier said than done. Stick to your rate. Know what your price is saying about your business. When providing a service, if you don’t charge enough, you are saying that you aren’t the best at what you do. Raise your rates accordingly. Be realistic about costs.
Are you charging the right price? | Missouri Business Development Program Calculating the overhead percentage for your business is critical to pricing your goods and services profitably and operating your business successfully. Competitive pricing is always a hot-button issue with business owners. They know competitive prices will attract customers and that price is often the first piece of information buyers collect. So they rationalize that if they can make a favorable first impression on price, increased sales and loyal customers will follow. What they fail to realize is that price-conscious consumers are not always loyal customers. They often choose the lowest price over anything else the business owner can offer. Many business owners establish prices without understanding or analyzing their own costs of doing business. To compete effectively, business owners need to have a basic understanding of their costs and a procedure for capturing these costs in their selling price. Pricing terminology Here are some important terms to remember. Conclusion Required: 1.
Fortune 500 Mission Statements Fortune 500 companies are the biggest and best run in the nation. That's because they remain tightly focused on delivering quality in a competitive market. If you want to learn from the best, there are plenty of lessons waiting in these mission statements. 6443 Iron Bridge Road Richmond, VA 23234 We're Ready in Advance Advanced Auto Parts, Inc. is a company that provides customers with automotive products and services, which include diagnosing vehicle problems and doing repair work It is the Mission of Advance Auto Parts to provide personal vehicle owners and enthusiasts with the vehicle related products and knowledge that fulfill their wants and needs at the right price. 1932 Wynnton Road Columbus, GA 31999 Aflac insurance policies may help you with those expenses not covered by your major medical plan. Aflac is a supplemental insurance company in the US. AGCO Corporation 4205 River Green Parkway Duluth, GA, USA 30096 A World of Solutions for your Growing Needs Albertson's, Inc. 250 E. 50 E.
How to Better Manage Your Cash Flow Cash is king when it comes to the financial management of a growing company. The lag between the time you have to pay your suppliers and employees and the time you collect from your customers is the problem, and the solution is cash flow management. At its simplest, cash flow management means delaying outlays of cash as long as possible while encouraging anyone who owes you money to pay it as rapidly as possible. Measuring Cash Flow Prepare cash flow projections for next year, next quarter and, if you're on shaky ground, next week. An accurate cash flow projection can alert you to trouble well before it strikes. Understand that cash flow plans are not glimpses into the future. Start your cash flow projection by adding cash on hand at the beginning of the period with other cash to be received from various sources. The second part of making accurate cash flow projections is detailed knowledge of amounts and dates of upcoming cash outlays. Take full advantage of creditor payment terms.
Hire a Contractor or an Employee? Independent contractors and employees are not the same, and it's important to understand the difference. Knowing this distinction will help you determine what your first hiring move will be and affect how you withhold a variety of taxes and avoid costly legal consequences. What’s the Difference? An Independent Contractor: Operates under a business name Has his/her own employees Maintains a separate business checking account Advertises his/her business' services Invoices for work completed Has more than one client Has own tools and sets own hours Keeps business records An Employee: Performs duties dictated or controlled by others Is given training for work to be done Works for only one employer Many small businesses rely on independent contractors for their staffing needs. Savings in labor costs Reduced liability Flexibility in hiring and firing Why Does It Matter? Misclassification of an individual as an independent contractor may have a number of costly legal consequences.
How to Write Your Mission Statement A mission statement is a key tool that can be as important as your business plan. It captures, in a few succinct sentences, the essence of your business's goals and the philosophies underlying them. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community. The mission statement reflects every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community. "Mission statement help clarify what business you are in, your goals and your objectives," says Rhonda Abrams, author of The Successful Business Plan: Secrets and Strategies. Your mission statement should reflect your business' special niche. The Write WordsTo come up with a statement that encompasses the major elements of your business, start with the right questions.
Biz Ladies: Creating Systems for Your Business Today’s Biz Ladies post comes to us from Michelle Nickolaisen, a business systems and organization expert. Michelle works alongside established creatives who tend to get stuck going from innovation to action and are overwhelmed with all the details of running their own business. Today Michelle gives us some insight into what systems works best for you and how to fully implement these organizational systems into your business. Thanks for this wonderful advice! –Stephanie Real the full post after the jump… This post is brought to you by MailChimp, an app created to help you design, send, and share email newsletters. If you’ve been in business for any amount of time, you’ve probably heard about systems and how awesome they are. What are systems? A quick & dirty definition of a “system”: it’s a repeatable plan or a process (anything from a simple 3 step process to a complex multi-person procedure). Creative types tend to really chafe at the word “system” and all of the associated baggage.
Hiring Employees vs. Independent Contractors | Wisconsin Startups The question facing start-ups and small businesses (less than 50 personnel) about outsourcing their staffing needs to an independent contractor is if the economies outweigh the risks. Should they hire organic personnel, train them, and administer their salaries and benefits, only to see most of them pirated by larger companies that pay better? Or should they leave the headaches of managing and controlling workers in the hands of other people who are better trained and experienced to do the job? Hiring Employees Versus Independent Contractors The appeal of hiring an independent contractor that has scores of people it can deploy as contracted by the fledgling business, or individual professionals and freelancers who can do limited tasks on demand, hinges mostly on overhead cost reduction. For instance, companies that do business online can benefit from freelance professional web developers and IT practitioners, and need have to invest on expensive IT training for its staff. Conclusion