How a Simple Change Earned This Contract Cleaner Thousands
How a Simple Change Earned This Contract Cleaner Thousands
Too many business owners don't charge enough for what they do.
Let me give you a few examples to back this up. See, my position is that price is only an issue when there's nothing else to talk about.
One of my coaching group members has a contract cleaning business. For some time, they thought they had to compete on price but when we examined what they provide against what the market, their value proposition stacked up. Their staff are covered by public liability and workers compensation; they get Superannuation and a bunch of other benefits as stipulated under local legislation. This means that in the event of accident, everyone's covered. Backyard operators who only sell on price don't have this protection.
Their clients are provided with a business invoices, meaning that their service is fully deductible as a business expense. Again, someone doing cleaning for cash in between jobs or moonlighting doesn't give invoices.
There are a whole lot of other reasons but the fact is that this client has increased their fees by almost 30% and secured some higher-level clients along the way. What matters is that the 30% fee increase is pure profit as the fixed costs of delivery don't increase. Say the fee increase was $10 per hour and you were billing 1,000 hours per month, that's $10,000 per month or $120,000 per year incremental NET profit. Not bad...
Another member is a travel agent. They provide a passport photo service for which they have been charging a whopping $11. We canvassed the group and asked what they would happily pay for a passport photo if their travel agent offered. The lowest price was $20 and the highest $30. Imagine we increased the price from $11 to $20. That's $9 and at one per day, 6 days each week, that's $2808 in incremental net profits per annum.
Another (no names to protect his highly unique identity) was offering free membership to his program. Conversions were running at 5 - 10%. Now at $1,500, conversions are running at 70%. How much did he leave on the table?
Your ability to increase prices comes as a result of the way you package what you sell; by illustrating the value differential you provide. It also comes with confidence - confidence in the way you sell.
The best clients are those who understand value and are willing to pay for it. Confident people deliver value. Confidence in sales comes from understanding and applying a process that works.
My final thought before I go grab another beer and relax for the evening? On Monday, go put your prices up. You can afford it.
How a Simple Change Earned This Contract Cleaner Thousands - To learn more about this author, visit James Yuille's Website.
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Here's a profound statement about price...
Too many business owners don't charge enough for what they do.
Let me give you a few examples to back this up. See, my position is that price is only an issue when there's nothing else to talk about.
One of my coaching group members has a contract cleaning business. For some time, they thought they had to compete on price but when we examined what they provide against what the market, their value proposition stacked up. Their staff are covered by public liability and workers compensation; they get Superannuation and a bunch of other benefits as stipulated under local legislation. This means that in the event of accident, everyone's covered. Backyard operators who only sell on price don't have this protection.
Their clients are provided with a business invoices, meaning that their service is fully deductible as a business expense. Again, someone doing cleaning for cash in between jobs or moonlighting doesn't give invoices.
There are a whole lot of other reasons but the fact is that this client has increased their fees by almost 30% and secured some higher-level clients along the way. What matters is that the 30% fee increase is pure profit as the fixed costs of delivery don't increase. Say the fee increase was $10 per hour and you were billing 1,000 hours per month, that's $10,000 per month or $120,000 per year incremental NET profit. Not bad...
Another member is a travel agent. They provide a passport photo service for which they have been charging a whopping $11. We canvassed the group and asked what they would happily pay for a passport photo if their travel agent offered. The lowest price was $20 and the highest $30. Imagine we increased the price from $11 to $20. That's $9 and at one per day, 6 days each week, that's $2808 in incremental net profits per annum.
Another (no names to protect his highly unique identity) was offering free membership to his program. Conversions were running at 5 - 10%. Now at $1,500, conversions are running at 70%. How much did he leave on the table?
Your ability to increase prices comes as a result of the way you package what you sell; by illustrating the value differential you provide. It also comes with confidence - confidence in the way you sell.
The best clients are those who understand value and are willing to pay for it. Confident people deliver value. Confidence in sales comes from understanding and applying a process that works.
My final thought before I go grab another beer and relax for the evening? On Monday, go put your prices up. You can afford it.
How a Simple Change Earned This Contract Cleaner Thousands - To learn more about this author, visit James Yuille's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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