Do you REALLY know how much profit you make per job? Per project? Per widget? Per hour? Per client?
I'm often surprised at the answers I get when I ask prospective clients how they work out their pricing strategy.
Often there is no real set process behind it. No KPI's in place. No checking back after the project to see if you actually got the pricing right. There is often some confusion over mark-up/margin & usually, not ALL the right costs have been included.
In other words, many are often winging it!
I've met more than one company who would price the job & then add "what they thought they could get away with" as their profit.
How's that for a pricing strategy. 🙄
The bigger the job and the tighter the margin, the more likely it is that this kind of strategy will put you out of business.
A good builder starts a construction biz because he's a good builder.
A good widget maker starts a widget biz because he's good at making widgets.
That doesn't mean that they are good at the 'business stuff."
2021 will be a difficult year for many businesses which it is why it's so important to get this right. If this is not your thing - get the experts in to help you get it right.
Experts like me! 😉
Business & management coach, mentor, trainer, author, speaker, social entrepreneur, (and chief pot and bottle washer!)