You're pretty proud of yourself! After all, only four months ago you came up with the idea of opening your own business - "Jenni's Interior Design" Your friends have always said you were gifted when it came to arranging furniture and picking out colors, and you love to do it, so you decided it was time to get serious.
You went to a few "Starting Your Own Business" seminars, picked out a name and registered it, had your nephew build a great website, printed up some business cards, got a second phone line, and took out an ad in the local paper - "Are Your Walls and Furniture as Stagnant as Pond Scum? You Don't Need to Break the Bank for a Fresh Look, You Just Need a Makeover!"
Then you crossed your fingers and waited. Day one, no calls. Day two, no calls. Day three - the phone rings! Success! Your heart is pounding as you pick up the phone. The conversation goes something like this:
"Hi! This is Jenni with Jenni's Interior Design, how can I help you?"
"Hi, my name is Celia, I saw your ad in the paper. What do you charge for your makeovers?"
"Well, my rate is $25 per half-hour for consultations or $100 per room to redesign the entire room. If we decide on new furniture or paint, that is your cost of course"
"Hmm, I have a lot of rooms I'm thinking about changing. Can you come over for a free consultation just to see what I have? If I do more than one room, can I get a discount?"
"Umm? sure, that's fine. If we do more than one room I can do a discount too, no problem"
Hold on. Maybe Jenni hasn't given away the farm yet, but she's on her way. When Jenni hangs up the phone she's going to realize a few things:
The problem here isn't that Jenni was caught off guard, the problem is that she instinctually began to doubt herself and her prices. You can't blame Jenni, after all, this is her first potential customer and while she's talking on the phone she's probably thinking "Gee, am I really worth $25 per half-hour? I do this for my friends for free. I don't know if I'm really qualified to charge that kind of money"
The potentially bigger problem is Jenni pretty much threw her pricing structure out the window when questioned. There is nothing wrong with bartering and making deals, but it shouldn't be your standard business practice. Without a doubt, if Celia likes Jenni's work and recommends her to a friend, Celia will be sure to brag about the great deal she negotiated as well. Now, Jenni is probably stuck with this "free consultation with a discount" policy for any referral customers. Jenni is setting herself up to run all over town free of charge, give good advice, and potentially not make a dime.
What Jenni should say is, "I would be thrilled to come out, but I'll have to keep the consultation charge in place. What I can do is credit your consultation towards the first room we makeover, each additional room would be at the regular rate. I'm sure I'll have some great ideas that we can work on together"
Of course it takes confidence in yourself to come back with that kind of a reply. Jenni is only going to have that kind of confidence in herself by knowing her competition, what they charge, and that fact that she is as good, or better, than they are.
So here's the key to not giving away the farm:
Know your competition and the commonly established rates for your service.
If you are competent, confident and know you have as much skill and talent as your competitors, there is no reason why you should be charging any less than they do. In fact, some people believe if you charge more it's a sign that you must really be good!
But let's not get carried away, the point isn't to see how much you can charge before you run yourself out of business. The point is, "Don't sell yourself short"
One great way to measure your competition is to call and try them out. I personally did this not long ago when I was thinking about opening a software consultation / training business. I found a small business specializing in software training and had them send out an employee for two hours of Microsoft Access training. The friendly lady who arrived spent two hours reading the 'help' screens (to herself) and flipping though the paperback user's manual trying to figure out how to show me some rather simple tasks I had questioned her about. Hardly what I would call expert training. However, it served its purpose - I knew I could do a better job.
Do your research and provide an efficient, professional service. Show them that you're worth every penny. If you build that kind of reputation, price will not be much of an issue. Your customers will admire your confidence and work ethic and be happy they're doing business with you.
Oh, and keep the deed to the farm in your drawer where it belongs.
About The Author
David James is the editor of "Home Income Digest", a publication updated quarterly which presents more than 40 of the best home-based businesses currently available in the country. Located at http://www.homeincomedigest.com, Home Income Digest includes only well-researched, established, small business opportunities. For more information about the author, visit http://www.homeincomedigest.com
http://www.homeincomedigest.com
on demand house cleaning Winnetka ..When you feel like you're always busy working on your... Read More
No matter how small your small business is, it is... Read More
Starting and managing a small business is no fun chore,... Read More
Part of the power plan is making sure you have... Read More
Starting the blind cleaning business is one of the best... Read More
Is it right for you?If you decide to advertise your... Read More
Every business starts with an idea or a dream. To... Read More
The employer / employee relations environment has been constantly evolving... Read More
I've got good news and bad news. The good news... Read More
At one point or another, almost every business runs short... Read More
Start thinking about buying an established business if you want... Read More
One way to determine your companies mission statement is based... Read More
Boston itself covers 50 square miles of concrete and traffic,... Read More
With the massive explosion of start-ups and home businesses developing,... Read More
Where do you look for the appropriate alliance?One of the... Read More
You can make your trade show experience much easier by... Read More
Never underestimate the power of perception! Perception plays a major... Read More
If you run a pressure washer business you need complete... Read More
This year, some 700,000 American businesses will be sold. Most... Read More
How do marine type businesses start? Have you ever thought... Read More
As the owner or an employee of a small-to medium-sized... Read More
Paul Leonard's BirthdayCards2Go.com paid greeting card service offers convenience when... Read More
Here are a few tips on how to hand out... Read More
The revenue history is a vital piece of your power... Read More
You are probably hard at work promoting your business (and... Read More
house cleaning near Wilmette ..We were more than excited. Our women's doubles tennis team... Read More
Does your company have a community relation strategy? Have you... Read More
A corporate shell could be liken to a house that... Read More
Why should you always maintain a good report with a... Read More
Competition in the business world is often viewed as a... Read More
So you want to get into the auto detailing business... Read More
There are many choices when thinking about a small business... Read More
In the heavy equipment cleaning business you can make good... Read More
The FTC, Federal Trade Commission, is considering modifying the franchise... Read More
Sacred cows take a long time to die. We get... Read More
The FTC Franchise Rule maybe changed, as the Federal trade... Read More
What makes a business relationship?What really makes a business relationship?... Read More
The success of your business is critically dependent on how... Read More
Recently one of my customers told me the chaos swirling... Read More
A consultant must remember that the business belongs to the... Read More
Many self employed professionals find themselves overwhelmed, frustrated, and confused... Read More
The stock market is still on a wild roller coaster... Read More
So often small service businesses fail to exploit niches, which... Read More
Thinking of starting a business on line? If so there... Read More
When do annoyances in a relationship become too much to... Read More
Announcements can be handed out as a business cardAnnouncements can... Read More
What kinds of things effect mobile service businesses P and... Read More
Here are some useful tips on what to consider before... Read More
I was floored! I couldn't believe what they were saying!... Read More
Having their own business is something many millions of people... Read More
Small Business |