Originally Posted by Outdoors_Unlimited
I've got a question for you guys.
His do you guys go about determining what the market will bear pricewise.
If I go with the formula of figuring out my costs, and going with that, I'm leaving money of the table because I operate with as small of a budget as possible.
I "think" I'm starting to get the lawn pricing figured out, as I am hitting the hourly rates I'm shooting for. I'm looking more along the lines of the irrigation work. Last week I installed a lake pump for a friend, thought I made decent money doing it, only to have the neighbor tell me he couldn't even buy the pump for what my installed price was. When I talked to the guy at the irrigation supply I found out I under sold myself by $200. I dont want that to happen much more. So this week, on a valve replacement I thought I would try to up the price I was charging a bit, to have the customer tell me I was way high. I've always charged $125 to replace a valve, and tried $175 this time.
We are always getting compliments on how nice of a job we do, so I know I'm pretty much covered on the quality side of business, now to figure out how to be more consistent and in line on the pricing department. How did you guys learn this part. I once heard, Johnny's plumbing company didn't fail because he was a bad plumber, its because he didn't understand business. Basically that's what I'm afraid of. I KNOW the work/field/crew management aspect of being a business owner, but I never knew/ still learning the business side of it.
Would it be best for me to take some business classes? What tips can you offer?
Edit: I'll add that I am still small, with one helper, but want to learn these things before I grow much more, and run into issues, risk loosing everything I work so hard for.
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You have some great questions, Outdoors...
A business class or two is never a bad idea. They will give you direction when you're making those important decisions for your company.
As for what you charge....
As long as you are covering your costs and making a respectful profit, then you are doing it right. You will not get every potential customer you talk to.
But you will get the customers who believe you are being fair, have heard of you beforehand and know your work. These customers will be willing to pay what you are charging.
I do not do any advertising... haven't for 10 years. All my work is referrals. I have some good customers who have given my number out quite a few times. I also have formed some great relationships with other business owners who work in our field.... sprinkler installers, tree companies, suppliers, etc. They also have given me some great referrals thru the years.
Keep doing what you are doing. Do good work, and always give the customer a little extra when you are there, they will see that.
Seems like you are on the right track. Good luck!