![]() |
|
![]() |
|
![]() |
|
![]() |
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/aboutus.htm
This morning, I went to take a short walk outside.... Read More
Senior citizens are generally not a large marketing segment for... Read More
As a specialist in getting restaurants open, it is surprising... Read More
When starting a business, you have to determine the method... Read More
A career coach could be simply defined your job seeking... Read More
One of the biggest fears people have about starting a... Read More
Starting the blind cleaning business is one of the best... Read More
Outsourcing is the strategic use of outside resources to perform... Read More
When it comes to cost, how much can you afford... Read More
You'd like to go into business for yourself, and believe... Read More
In the first article we mentioned the main characteristics that... Read More
Many physical therapists in private practice have the appearance of... Read More
If you own a mobile car washing, pressure washing or... Read More
Now that you have invested your time, energy and money... Read More
A janitorial cleaning service is one of the best businesses... Read More
Until the day I learned to play chess I loved... Read More
Anyone who is serious about washing aircraft as a full... Read More
Congratulations, you are starting a small business! You are taking... Read More
In the first part of this article I put forward... Read More
If you are worried about how many different business cards... Read More
Do you operate your business as a series of projects,... Read More
Many small business startups fail within the first 2 years... Read More
You only have so much time in a day right?So... Read More
The challenges of the small business owner are well documented.... Read More
So what exactly is a "Small Business Lone Ranger?" A... Read More
Why do you need an account plan?When you first decide... Read More
Writing a business plan for your Solo Entrepreneur business doesn't... Read More
Are you tired yet of all the books out there... Read More
Whether it has been thrust upon you by external market... Read More
How to identify future solutions and opportunities?Your power page, if... Read More
When working properly, computers enable small businesses to make big... Read More
Image of your franchise automotive outlet is so important. Some... Read More
Why does consistency in the message have an effect on... Read More
Thankfully, most of us will never find out. That is... Read More
Back when I owned an inventory-based business, one of my... Read More
Business card size works well for invitations to special events.What... Read More
Cash flow. To stay in business, you've got to keep... Read More
Whether your target audience is in your neighborhood or across... Read More
Many mobile car wash operators would like to add de-ionized... Read More
Starting and managing a small business is no fun chore,... Read More
1. There Are No "gimmes" ? They count two-foot putts... Read More
Here are a few tips on how to hand out... Read More
Do you promote yourself as offering prompt, reliable and quality... Read More
You see it often in large shopping complexes. Customers seem... Read More
In the book Women and Small Business author gives all... Read More
Tap these treasures of ideas. The best money you can... Read More
What is the Big Race all about when it comes... Read More
Before you start a business we encourage you to prepare... Read More
With the massive explosion of start-ups and home businesses developing,... Read More
You are selling your small business (business value under $1... Read More
Small Business Small Business |