5 Ways I Transformed my Business no. 2: Pricing

The earlier you get your pricing right the better.

You need to work out what you want to charge and not be influenced by other factors – how much you need the work, whether you like the client, what mood you’re in.

Try and remove emotion from it.

Easier said than done!

I was guilty, as are many others, in the early days desperate to win work you price low to win that work. Early on when meeting with a prospect I would usually ask for a copy of their previous year’s accounts and would turn straight to the detailed P&L page to see what the accountancy fees were. I’d then discount this by 10% to hopefully win the work.

What a terrible idea!

I’d often get this horrendously wrong – far too low. It then creates a situation where you resent doing the work because you’re not being paid enough and it can be difficult going back to a client and saying you got it wrong and need to increase your fees.

Quite quickly I worked out what my fee levels should be for different types of work and sizes of business. I started to provide fees quotes off the top of my head based on a gut feel of the work required. This worked ok, but there was the occasional cock up.

Then I produced a menu style price list, it was basic and did an ok job. I started going into meetings with my laminated price list which I referred to when discussing fees, not perfect but a step up from quoting off the top of my head.

I then moved on to an excel spreadsheet which calculated fees based on answers to a number of questions – turnover, number of bookkeeping transactions, number of employees and so on. This worked well and I often still refer to this.

I then developed my own app which produced a fee proposal and generated a letter of engagement. The theory here was good but in practice it didn’t work well enough, it was glitchy and difficult to update.

‘…you have to be confident that you are worth the fees…’

I then moved on to Go Proposal which I have found great. The ability to create a proposal in front of a client, with complete transparency of what work you will do and the fees you will charge.

Ultimately you have to be confident that you are worth the fees you are charging.

And – you need to work on the basis that your prices reflect the value you provide. If you start to compete on price and not level of service you’ll end up with picky price sensitive clients who don’t value what you do for them.

Which leads nicely on to the next point which I’ll cover in the next post…


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