How much do you charge for your plumbing services? Is it a fair rate for both parties—all things considered? Deciding on the right price for your services is one of the very important business decisions you’ll ever make. This is what will determine whether you’ll progress or fail to make a mark in the market.
It’s worth noting that overpricing and underpricing could both have the same long-term effect. For instance, when you charge very low for your services, you’re likely to be exploited but end up with very low returns. Overpricing, on the other hand, might be a dealbreaker for most of your potential customers.
As such, it’s imperative that you determine a price rate that’ll be fair for you and your clients. Remember, everyone is looking to reduce the plumbing costs in their construction projects and one way of doing that is by finding an affordable plumber. So, how can you find that sweet spot? Here are a few tips to keep in mind:
1. Determine your goals
The first thing you’ll need to do is determine your weekly, monthly, and annual goals. How much are you hoping to earn by the end of the year? The answer to this question is dependent on many things. First, you’ll need to consider what you made the previous year. Obviously, your target should be a little higher than what you’ve already achieved before.
Another thing that’ll determine how much you should set as your goal is the number of people you’ve employed. How many members do you have in your team? What’s their remuneration? Remember, the amount you pay to your employees will significantly affect their productivity. So, make sure to come up with a fair value.
2. What are your expenses?
As a business, you probably have a lot of monthly and annual expenses. For instance, you need plumbing company software to enhance your productivity and help you track the overall performance of your team. You might also need to replace some plumbing tools or restock your accessories.
A self-sustaining business should be able to take care of all these needs without requiring you to go back to your pocket. So, since plumbing is the main source of revenue, you might want to include these expenses in your monthly or quarterly goals.
3. What’s the average price range?
Remember, you’re not operating in a vacuum. Therefore, it’s important that you make all your financial decisions with your competitors in mind. As earlier mentioned, the pricing of your products will have a huge impact on your business success. Both overpricing and underpricing will affect your revenue generation in one way or another.
To find the right price range for your services, you’ll need to do a little research. But first, you have to determine the value of your products and services. Keep in mind that every plumbing job is different from another. Therefore, you’ll need to categorize all your services based on their complexity and the amount of time they require.
Having done that, the next step in your research is to find out how much other plumbing service providers are charging their customers. Make sure you check at least three companies or agencies within your locality before making your final decision. This way, you’ll be fair to your business, your customers and also have a better chance of remaining competitive in the market.
4. What’s your pricing model?
Another thing that might determine how much you charge at the end of the day is your pricing strategy. In fact, as you do your research, it’s important to look at those companies using the same pricing model as you. For instance, if your charges are per hour, it might be quite difficult to compare yourself to those using the fixed price method.
If you’re new in the market, you might be tempted to charge a little less than the rest of the plumbers. But don’t go too low because potential clients might be skeptical about working with you since the general belief is that quality is directly proportional to the price. So, if the competitive price is USD$100 per hour, you might want to start at USD$90 rather than USD$80 per hour.
How much you charge your customers can determine the fate of your business. Therefore, it’s imperative that you find the right pricing strategy from the word goes to avoid exploitation of either of the parties. Some of the things you’ll need to consider include your expenses, the number of employees you have, and the average competitive prices. With all these factors in mind, you can hardly go wrong with the pricing of your plumbing services.