Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: Danny Guest on January 05, 2011, 08:10:09 am
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Ive been reading a few articles on the vat increase.
Although only 2.5% increase there is preasure on businesses to absorb the extra 2.5% and good competition might make them do so. Remember though food is exempt and a lot of household budgets are spent on food.
Inflation has also increased to 3.3% with wages only rising by 2.2%. Something that would otherwise cost you £1 will cost you and extra 2.13p so not a great deal more to pay.
The situation has been talked up and up and lots of people have feared the increase because of bad propaganda from the labour party which their 2.5% decrease last year wasnt successful in causing consumer growth.
The opportunity for those window cleaners who want to increase prices is better now then every because you have a very big reason to justify price increase that many of your customers will understand because they are facing the same situation.
Im really considering now a price review on all my rounds and will start to mention to customers on my smallest rounds that there may be a price increase to keep in line with inflation and because the vat increase is squeezing the profit margin out of the business of a poor window cleaner.
I think it was Dave Morris who merntioned a 20% increase in round prices, im not sure if mine will be so 20 or 25% but i will be increasing them soon.
What do you think?
Best Regards
Danny
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I registered for VAT 1st Dec. Although it will cost me I think it will have its benefits. I have told all my customers that I will not pass the VAT on to domestics however due to bank charges I will now be charging 50p for cheques, so far almost all cheques to arrive have included this with no question.
The benefit for VAT is that I am on flat rate, for the first 12 months I will pay 11% followed by 12% in the second year, however all invoices are charged at the full 20% so a 9% gain there to help offset the loss on domestics.
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i believe that if you start increasing your prices by 20-25% you will lose quite a few many will see this has a kick in the teeth and will use that has an excuse.
but this depends on the customers when they have been increased,
even commercial with there tighten budget would see that kind of increase has a kick in the teeth.
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I'm going to be increasing my prices, but just by a flat rate of £2 per customer. This will mean an increase of 20% for some, but around 10% - 15% for most.
Andy
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20% is a huge increase for all your customers to take in
ive just finnshed reading winning at window cleaning
and that explains how to increase your prices
in a number of ways all year round thats more accepttable to customers
20% in one go can be achieved this way in a very short time, few weeks
which is what you are trying to do anyway, its the clever way to do it
to drop a 20% hit on a few customer is fine
but i wouldnt push it further than that, unless you dont mind losing them
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20% is a huge increase for all your customers to take in
ive just finnshed reading winning at window cleaning
and that explains how to increase your prices
in a number of ways all year round thats more accepttable to customers
20% in one go can be achieved this way in a very short time, few weeks
which is what you are trying to do anyway, its the clever way to do it
to drop a 20% hit on a few customer is fine
but i wouldnt push it further than that, unless you dont mind losing them
???? what is this?
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I'm going to be increasing my prices, but just by a flat rate of £2 per customer. This will mean an increase of 20% for some, but around 10% - 15% for most.
Andy
i think £2 per customer is too much mate,i think you could get away with a quid but that could also be tough
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i think £2 per customer is too much mate,i think you could get away with a quid but that could also be tough
I've tried it already on 4 £30 jobs... Put them up to £32 - No complaints at all. All of my customers are x8 weekly, so it's only an extra £1 a month for them.
This is the first time I have ever put up my prices - I think customers expect it every once in a while.
Andy
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i think £2 per customer is too much mate,i think you could get away with a quid but that could also be tough
I've tried it already on 4 £30 jobs... Put them up to £32 - No complaints at all. All of my customers are x8 weekly, so it's only an extra £1 a month for them.
This is the first time I have ever put up my prices - I think customers expect it every once in a while.
Andy
you have only put them up just over 6% do you think if you had tried to put them up to £36 that 20% they would of still accepted it
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I think 20% is far too much. Nothing has gone up by 20% so how can you justify it?
You will IMO lose a good deal of your custards if you try this and it won't have made it worthwhile. Some may swallow it but if you are then disrupting your round to the point where 2 out of 5 in one road cancel you've bitten your nose off to
spite your face.
Not saying a price rise shouldn't happen but if my local supermarket put all their prices up by 20% I'd eat out every night.
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you have only put them up just over 6% do you think if you had tried to put them up to £36 that 20% they would of still accepted it
No I don't think they would have accepted a £6 rise.
The cheapest customer I have is £15... They will be going up to £17, which I don't think they will mind.
At the end of the day a £2 rise for my customers is an extra £1 per month for them... Many of them have been customers for 5 years now - I really can't see many of them dropping me for the sake of £1 per month... But there is always a risk.
Andy
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20 % of a fiver , is an increase of £1.... so thats ok....
but i would reduce the % ,the higher the price of the clean,...
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Ive spoken with a few business owners, the local chamber and my accountant and have decided that i will increase prices on my 3 oldest and lower priced rounds.
The increases will be 50p and £1 so im not pricing myself too high. I will be sending letters out next week informing customers about the increases that will be valid from april 1st.
Using the recent vat increase as a reason should limit customers cancelling and should make them more understanding and simpathetic. Im prepared for losses but im always canvassing so i will replace cancellations quickly.
Ive picked up another 3 customers while working today so ive got 18 new customers this week and im going canvassing now to hopefully make it 20 or more
Good luck andy with the prices
Best Regards
Danny
Danny
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Since the credit crunch started in 2007 I have refrained from putting up any prices, except those that really were woefully underpriced. Of those I did increase, no one cancelled.
Many customers have since then asked 'has it gone up yet', clearly expecting a rise at some point. Until now I have explained that I don't want to jump on the bandwagon and put my prices up yet, because I appreciate that they are feeling the pinch and I have no desire to make it any worse for them than it already is.
However, I have absorbed this now for three years, and am really struggling myself now, especially after losing most of December through the adverse weather. So this year I will thoroughly review my prices and increase them in line with what they are really worth. I intend to give customers at least 6 weeks notice and implement by April.
John.
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danny i really dont think using the vat would make them sympathetic, i mean your not even vat registered so it actually effects you very little.
and vat has increased a little but no were near enough to justify a 20% increase, BUT if your prices are extremly low then maybe youll get away with it.
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ive found before if your prices are extremely low,just putting it up 50p for maybe the first time ever people question it as adapt to paying silly prices
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Alot of my customers are asking are your prices still the same??
SO i think all prices are going to go up £1 with customers that have been on the books for over a year anyway
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danny i really dont think using the vat would make them sympathetic, i mean your not even vat registered so it actually effects you very little.
and vat has increased a little but no were near enough to justify a 20% increase, BUT if your prices are extremly low then maybe youll get away with it.
Ronnie
I know what your saying but from a customers point of view they might not question it as much as a business man like yourself.
My prices are around £2 for terraced fronts and £5-6 for semis which are all cleaned fortnightly so a 20-25% increase on these is only 50p-£1 extra per fortnight.
Where i might lose customers ive just canvassed another 10 customers tonight at £6 a fortnight so if i do lose many i should be able to replace them quickly
Danny
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but thats why them prices are cheap!
i can get that for terraced so i guess you wont have a problem.
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Since the credit crunch started in 2007 I have refrained from putting up any prices, except those that really were woefully underpriced. Of those I did increase, no one cancelled.
Many customers have since then asked 'has it gone up yet', clearly expecting a rise at some point. Until now I have explained that I don't want to jump on the bandwagon and put my prices up yet, because I appreciate that they are feeling the pinch and I have no desire to make it any worse for them than it already is.
However, I have absorbed this now for three years, and am really struggling myself now, especially after losing most of December through the adverse weather. So this year I will thoroughly review my prices and increase them in line with what they are really worth. I intend to give customers at least 6 weeks notice and implement by April.
John.
My plan now john is to continue canvassing while putting prices up on the 3 lowest priced rounds i have. Ive gained 28 new houses so far this week through canvassing and being seen and there all at my higher prices. I wont be putting them up as much as some cleaners though because i clean a lot of fortnightly rather than monthlys
Good luck anyway
Danny
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but thats why them prices are cheap!
i can get that for terraced so i guess you wont have a problem.
Im getting them prices for my newly canvassed work which is why im not really bothered about cancellations.
Ill just bring my old prices up to date with the new work
Danny
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I registered for VAT 1st Dec. Although it will cost me I think it will have its benefits. I have told all my customers that I will not pass the VAT on to domestics however due to bank charges I will now be charging 50p for cheques, so far almost all cheques to arrive have included this with no question.
The benefit for VAT is that I am on flat rate, for the first 12 months I will pay 11% followed by 12% in the second year, however all invoices are charged at the full 20% so a 9% gain there to help offset the loss on domestics.
Do you do a lot of commercial then where charging vat isn't a problem?
Depending on your volume of domestics you will lose a considerable amount. For every £20.00 charged you will pay C & E £2.20 in your first discounted year and than if the rates stay the same £2.40 per £20.00
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winning at window cleaning? is t in all good book shops lol?
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I registered for VAT 1st Dec. Although it will cost me I think it will have its benefits. I have told all my customers that I will not pass the VAT on to domestics however due to bank charges I will now be charging 50p for cheques, so far almost all cheques to arrive have included this with no question.
The benefit for VAT is that I am on flat rate, for the first 12 months I will pay 11% followed by 12% in the second year, however all invoices are charged at the full 20% so a 9% gain there to help offset the loss on domestics.
This is not actually true because you are paying 11 or 12% on the full 20% vat inclusive amount so effectively you are paying VAT on VAT. They make out that you are keeping the 9% difference but it is actually lower than that.
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For £100.00 nett you charge vat on top at 20% therefore gross including vat is £120.00
For flat rate 12% rate you pay C & E 12% of the full £120.00 = £14.40 leaving you with £5.60, which is the difference from the actual vat of £20.00.
Therefore every £100.00 nett you charge you make 5.60. Remember this £5.60 is classed as income and you will be taxed on it. :)
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I didn't think you could charge a VAT amount that you won't repay. IE: If you are only being charged 11%, that is what should be what you Including VAT total should include So a £10.00 invoice should be £10 Cleaning £1.10 VAT and not £2.00?
I registered for VAT 1st Dec. Although it will cost me I think it will have its benefits. I have told all my customers that I will not pass the VAT on to domestics however due to bank charges I will now be charging 50p for cheques, so far almost all cheques to arrive have included this with no question.
The benefit for VAT is that I am on flat rate, for the first 12 months I will pay 11% followed by 12% in the second year, however all invoices are charged at the full 20% so a 9% gain there to help offset the loss on domestics.
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You can, it's the flat rate scheme, though the downside is you cannot CLAIM any VAT costs on items you buy which cost less than £2000.
If you have very little vatable expenditure then this is the best scheme, however you have to leave it when you hit around £180,000 turnover and go onto the standard scheme.
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Just put your prices up a £1 or 2 danny
I have been and not had one problem so far, most have expected it for a while as im over due with it really
Im gonna stick another £1 on next year and the after that will probably just stick a £1 or 2 on every couple of years
Right, off to lick some windows
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And still pay 200 quid a year! Isn't that right tax dodger?
Just put your prices up a £1 or 2 danny
I have been and not had one problem so far, most have expected it for a while as im over due with it really
Im gonna stick another £1 on next year and the after that will probably just stick a £1 or 2 on every couple of years
Right, off to lick some windows