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Tradies, Here’s How To Be Confident With Your Price
How to have price confidence?
How to be confident in your price, how to know your price is right when your customer says ‘Your price is too high’?
And you don’t really know, do you?
You put your quote together and your prospective customer says your quote is more expensive and you’re kind of in a whole world of uncertainty, aren’t you?
‘Have I made a mistake?’
‘Am I overcharging?’
‘Am I being greedy?’
I did a video last week where I spoke about this scenario and I talked about what the possible scenarios could be. I won’t go into them, go and watch that video.
What I want to talk about today is how to be more confident in your price because one of the possibilities is that you made a mistake.
And that’s probably the one that weighs on your mind the most.
“I’ve got it wrong. I’m too expensive. I’m being too greedy. I don’t understand, maybe there’s a better way to design it.”
Or, “Somehow, I’m being too expensive and I’m losing out on business because of it.”
That’s what you’re scared of, isn’t it?
I want to talk about how to be more confident, so that your price is actually right, and that you haven’t made a mistake, and that you’re not greedy and expensive.
Recommended Reading: Know Your Numbers (Episode 1) – Why It’s Important To Know Your Numbers
When your customer says, “your quote is too expensive”, you can confidently say, ‘No, it’s not.”
You can be more confident in your pricing accuracy and your market competitiveness over time as you practice.
The more quotes you do, the more jobs you win, the more confident you become that you’re not too expensive.
You could still be too cheap, but the more jobs you win over time, the more confident you become that you’re not too expensive.
And when somebody says, ‘Hey, you’re too expensive‘, the more confident you are that it’s not the case.
And when you don’t win jobs, you should ask why.
There’s no guarantee that someone’s going to tell you the truth about why, but they might and the more you have asked when you do lose then you can learn.
3 Steps To Be Confident With Your Pricing
1. The first thing to do is keep going, keep practicing, keep trying.
Lose some jobs, win some jobs and learn.
Make mistakes (because everybody does) and learn from them as well.
You know you have a process.
You get the drawings or you look at the job and you go through a process, whether you’ve got it documented and written down, and you follow it. You use a checklist, a cheat sheet or a pricing tool.
Whether you go through a process in your mind, you do follow a process to create your pricing.
You should have a documented process and you should follow it and that helps you make fewer mistakes and be more confident that you haven’t made a mistake when your customer says, “You’re looking expensive.”
- Use your checklist
- Follow your process
- Have things documented
If you’ve made a mistake, you’ll be able to see where it is.
Be process-driven and systematic on how you put your price together.
My coaching clients do this.
It really helps them:
Get the pricing right and be consistent
- Get the pricing right and be consistent
- Do a lot less guessing
- Offload the process of putting a quote together to somebody else in the business as your business grows
It helps them be more confident that they haven’t missed something in their pricing.
And I bet everybody watching this video has made a mistake putting a quote together and wishes that you hadn’t.
You probably made a mistake putting a quote together because you didn’t have a strict enough process that you followed.
3. The third thing is to look at your rates.
The way you put a quote together is to get your rates, and use your process and apply your rates to the solution. You get the drawings and you work out how many square meters it is, etc.
Or you estimate the time and materials you’re going to take and usually break it down into chunks so it’s easy to manage.
You can go and check your rates and compare them to your competitors.
Ring your old bosses, ring your friends, think of some local competitors and ask them what rates they charge and tell them what rates you charge.
You’re not giving secrets away nearly as much as you think you are. The more you know, the more they know — the less you’re at the mercy of your customers so you’re helping each other.
It’s going to be easy with your mate. It’s going to be easy with your old boss. Less easier with your direct local competitors perhaps, but they might tell you.
And of course, you can always ring up and get quotes and pretend that you’re a customer. People do that stuff.
Get yourself an idea of where your rates sit in the market and where your business sits in terms of quality and the service you provide.
- Are you cheap and not very good?
- Are you middle and middle good?
- Are you expensive and better than everybody else?
- Or you somehow stupidly cheap but still better than everybody else?
Understand where you sit on a price and quality basis.
4. Let’s look at how profitable your business is.
If your business isn’t very profitable, I don’t think you’re overcharging. It’s more likely that you’re undercharging.
If you’re not making enough money in your business to pay everybody’s wages, super, GST, and all those vehicles, overheads, materials, and a wage for you and a profit then you’re not being greedy and overcharging everybody.
You’re probably undercharging.
If we did find that that was the case, we’d be investigating more thoroughly to figure out what the problem is but you’re giving yourself more confidence that you’re not overcharging,
To summarize – knowledge is power.
The more you know, the better you’re able to protect yourself and remain confident in your price when it gets challenged.
Your job is to make sure you charge enough to pay all those bills and wages and make a profit.
- More practice, more experience and more mistakes helps you be more confident.
- Documenting your pricing process, and following that process helps you be confident.
- Knowing where you sit with your rates and your quality compared to your competition is really powerful
- Knowing that lower pricing isn’t profitable for you and that taking a job on at a lower price is unprofitable work gives you a lot of power when you’re challenged by somebody
The stuff I’m talking about here involves doing some work so that you’re prepared.
Building structure and systems and knowledge into your business to give you strength and confidence when you’re challenged on price takes work and time because it’s what we do in business coaching.
Maybe business coaching is right for you now.
There are four ways you can engage with me:
1. Subscribe to these emails and get them once a week in your inbox so you never miss a video from me.
2. Join the Trades Business Toolshed Facebook Group where you can watch these videos, ask me questions or talk to your peers.
3. Attend my next Tools Down workshop.
4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.