Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: Hilton on May 03, 2015, 11:10:22 am
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Its a bit of an eye opener-and can have a big impact on your business knowing your numbers and allows various options for pricing and targeting not just your current market but also other markets you may have avoided up to now.
Work out what your annual sales are OR would you like it to be then crunch those numbers down to an hourly rate, it will shock you and open up opportunities to grow your business by cutting prices to obtain more work without losing any money on an annual basis
Carpet cleaning has one of the best margins of any business out there yet it is not taken advantage off by I would guess 80% + of business's out there.
Do your sums I guarantee it will shock you. ;)
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open up opportunities to grow your business by cutting prices to obtain more work without losing any money on an annual basis
Would you like to elaborate on this point a little?
I'd like to grow my business with low price work but I have the problem that my diary is full of high price work, should I stop doing the high price work to make time? ;) ;)
An an owner operator I have a set number of hours in a week I can work , my best stratagy is too fill those hours with the maximum paying work I can.
to the point I would be more wise to not do a very low priced job and spend the same amount of time marketing to find the higher paying job. It's often said that it better to be working for £24 an hour than sat at home on your bum watching TV but that's a dangerous way to think becuase before long all your time is filled with low priced work
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Must admit, the statement "cut prices to get more work" only makes sense if you are targeting people that shop for low prices, if you are targeting customers that buy on quality then cutting your prices would actually get you less work. just saying.
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open up opportunities to grow your business by cutting prices to obtain more work without losing any money on an annual basis
Would you like to elaborate on this point a little?
I'd like to grow my business with low price work but I have the problem that my diary is full of high price work, should I stop doing the high price work to make time? ;) ;)
An an owner operator I have a set number of hours in a week I can work , my best stratagy is too fill those hours with the maximum paying work I can.
to the point I would be more wise to not do a very low priced job and spend the same amount of time marketing to find the higher paying job. It's often said that it better to be working for £24 an hour than sat at home on your bum watching TV but that's a dangerous way to think because before long all your time is filled with low priced work
Mike Your spot on , to many cc think that doing 5 jobs a day 6 days a week is success ,
I never see down time as wasted time as this is when you have time to think,plan and relax time is a very important commodity that is limited I now work less hours but earn the same through pricing myself out of jobs , sometimes I give prices so high just so that I can have time to do other things and often wonder if the next cc asks what quotes did you get .
CC should really be a plan to do other things as its hard work .
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Mike Your spot on , to many cc think that doing 5 jobs a day 6 days a week is success ,
I never see down time as wasted time as this is when you have time to think,plan and relax time is a very important commodity that is limited I now work less hours but earn the same through pricing myself out of jobs , sometimes I give prices so high just so that I can have time to do other things and often wonder if the next cc asks what quotes did you get .
CC should really be a plan to do other things as its hard work .
Time to plan and think what? how to get more high priced work? ;D
Seriously though, the goal for me is to get as much profitable work as possible. Even if I cant do them all, atleast I can then pick and choose the work.
It does seem as very strange comment "cutting your prices to gain more work" and without losing money? But then you are working a lot hard for the same money (at best, probably less money if your being honest). Of course you'll gain more work if your cheap, you just need to look at those facebook pages of the cheap guys. They have huge amount of likes and reviews, then just click on the people who leave these reviews.... I rest my case. There are guys charging £19 a room and two rooms for £30 etc! I mean, F*** that!
And please no one compare our trade with the likes of aldi or other cheap brands that are successful. Its a completely different thing.
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CC is a great idea for everybody who's willing to achieve his goals/dreams as owner/operator. You can expand onto various areas of cleaning business such as window cleaning etc.
Applause to every single of you for your time, commitment and creativity.
Look at all these people working for huge or medium companies like zombies day by day they got to be at their usually hated workplace dreaming to finally get promoted.
Peace,
Simon
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Pretty much what I expected everyone went straight in with the assumption that its about cheap.....
Those of you that can 'pick and choose' your high priced work are very lucky 90% of CC's will never be in that position, you must know your hourly value , is it in the £50-£70 bracket ?
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I did the sums and was shocked by how much my hourly rate needs to be.... my conclusion is I need more higher paying jobs!
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Might help Hilton if you give an example, does not need to be your own figures but it might help explain what you mean. Personally i try to work on a min of £50 hour, although i usually load it more for the first hour to allow for travel time and then discount for more work / area's, so i charge £65 for my first hour and try to work at £50 per hour thereafter.
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Cutting prices to gain more work. Thats the funniest thing I have seen on here for a while and or heard for ages. Insane.
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Yes it would be crazy to cut all your prices to obtain the annual income you require, you would be working much harder longer and spending more if you did that.
By the way, shock horror :o there are plenty good business's out there who's business model is based on a price point that many on here would sneer at yet would blow you out of the water in terms of annual sales and profit.
I should point out I no longer operate as a CC the formula cuts across all business types and is just something all business's should be aware off if you want to target a level of annual income but also want to know what your hourly rate is right now so you can (as above) raise it if to low or cut it if you are being unrealistic in your hourly rate and business is going begging you would otherwise obtain,....the best method is to have a mixture of the two to reach the annual sales and profit you aspire to achieve.
Incidentally on the example above given above at around £55 an hour and you had consistent flow of work at this rate you would be on £107k per annum so well done if thats the case you have cracked it and should probably be employing to lighten the burden by now.
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But I only want to work 4 hours a day 4 days a week.
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You need to seperate the owner operator for the multiple employee business before giving comparisons of what would blow things out the water, you can't compare the two, I know the owner of a franchise home cleaning comapny who employs many people (12-15) and charges £16 an hour whose actually earnings himself are less than me. Although to be fair his business is worth more than mine but he also has 10times the stress I do.
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£50 per hour is poor money, if you only work 1 hour a day!
Far more important statistic is:
a) Annual turnover
b) Annual profit (per person).
And probably even more important:
c) Does this trade provide you with the financial reward you wish for?
Here's my answer:
a) Enough
b) Not quite enough, yet
c) Yes, for now.
I've been trading for nearly 3 years now, and I'm still building up to where I wish to be.
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You need to seperate the owner operator for the multiple employee business.
No you don't it does not matter if you employ one or one thousand
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£50 per hour is poor money, if you only work 1 hour a day!
Far more important statistic is:
a) Annual turnover
b) Annual profit (per person).
And probably even more important:
c) Does this trade provide you with the financial reward you wish for?
Here's my answer:
a) Enough
b) Not quite enough, yet
c) Yes, for now.
I've been trading for nearly 3 years now, and I'm still building up to where I wish to be.
What do you want to earn annually is the question.
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Mike Your spot on , to many cc think that doing 5 jobs a day 6 days a week is success ,
I never see down time as wasted time as this is when you have time to think,plan and relax time is a very important commodity that is limited I now work less hours but earn the same through pricing myself out of jobs , sometimes I give prices so high just so that I can have time to do other things and often wonder if the next cc asks what quotes did you get .
CC should really be a plan to do other things as its hard work .
Time to plan and think what? how to get more high priced work? ;D
Seriously though, the goal for me is to get as much profitable work as possible. Even if I cant do them all, atleast I can then pick and choose the work.
It does seem as very strange comment "cutting your prices to gain more work" and without losing money? But then you are working a lot hard for the same money (at best, probably less money if your being honest). Of course you'll gain more work if your cheap, you just need to look at those facebook pages of the cheap guys. They have huge amount of likes and reviews, then just click on the people who leave these reviews.... I rest my case. There are guys charging £19 a room and two rooms for £30 etc! I mean, F*** that!
And please no one compare our trade with the likes of aldi or other cheap brands that are successful. Its a completely different thing.
Carpet dawg
Plan for world domination lol
If you chase money it will run away .
Every hour I do no cc is a bonus , sometimes you have to sit back and look at what your not doing .
If I was in my 20s I'd certainly do more hard floors , leather restoration and rugs on a collect and return basis .
Also a course on web design ,seo, and marketing .
I genral try to plan how to make as much as need for as little physical effort needed
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But I only want to work 4 hours a day 4 days a week.
And thats fine, but what is your hourly worth does it measure up with what you want to earn annually?
Once again people have got hung up on cheap v expensive completely missing the point.
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I find these topics both interesting & annoying, the topic is interesting but the delivery is annoying.
It's like there's some secret knowledge that only hilton knows and he wants to brag about it but does'nt want to tell us. he could just explain in plain English (with examples)..... but to be truthful he does'nt actually know enough about what he's on about to give an explanation that would stand up to scrutiny. So he hints at it and says....... 'we've missed the point' why not give us the point we've missed?
So Hilton why not explain in detail what you are hinting at. Make it impossible for us to miss the point by giving a meticulous explanation.
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^^^^^^^^^^^^ What he said^^^^^^^^^^^^^
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I find these topics both interesting & annoying, the topic is interesting but the delivery is annoying.
It's like there's some secret knowledge that only hilton knows and he wants to brag about it but does'nt want to tell us. he could just explain in plain English (with examples)..... but to be truthful he does'nt actually know enough about what he's on about to give an explanation that would stand up to scrutiny. So he hints at it and says....... 'we've missed the point' why not give us the point we've missed?
So Hilton why not explain in detail what you are hinting at. Make it impossible for us to miss the point by giving a meticulous explanation.
Make your mind up, in one sentence you are informing everyone its a secret but a secret I don't know anything about and then you are asking me to explain something I know nothing about in meticulous detail.
I thought it was obvious clearly you struggled with the concept so I will attempt to explain it at a level you can understand.
1) Do you know what you would like to earn annually
2) Do you know your current hourly rate
3) Does your current hourly rate match your aspirations
4) If it does great you have cracked it
5) If it doesn't then you will need to rethink your pricing
6) If you are a little short of your target then you can take on lower (:o shock horror god forbid) priced work to reach your target
7)If you know your numbers you can set your marketing mix accordingly (simple)
8 ) 8) This is not new it's an aged formula used by many of the top performing business's in the world
9)Once you know your hourly rate you can use it for minimum pricing for example £55.00 as your minimum order
10) Slide it up slide it down to suit your life style , need a new van move your hourly rate up or take on more work at a lower rate.
If I wanted to earn £75k per annum , I would be charging £38.50 per hour or £307 per day or £1536 per week so I know what I am targeting if I had already earned £1200 by Wednesday, all I would need by Friday is to do sales of £168 per day .So if higher earning work was not available I would take lower priced work to reach my target instead of dismissing it out of hand because its beneath me.So If I took a few small jobs at £42 hey presto I am there with out losing any money on my target figures.
By breaking it down into smaller sections and working out what your time is worth it becomes far more achievable than by just saying I am going to do sales this year of £75000 .Placed in a structured manner it focuses the mind to keep you on target, you might not reach it but its amazing how the mind starts to focus on your numbers and your sales rise accordingly.
The point you spectacularly missed is that this is not about going cheap and mixing it with the rough end of the market it will do the opposite and take many business's (not yours of course as you are a superstar) to another level usually in year one.
Simple really ain't it ?
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What utter rubbish, again
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There was no need to start the post by insulting me :'( :'(
Thank you ( and I do sincerely mean thank you) for going into more details, it make for a much interesting topic.
Lots of points but to summarise you are talking about using a sliding scale to match your aspirations ( a new van) and your fluctuating income (made £1200 by Wednesday so can lower your hourly rate)
But how does this work in the real world ? I need a new van so increase my hourly rate to create the cash to pay for it sound like a good idea....... but if I am capable of increasing my hourly rate to buy the van why don't I do it anyhow ? even if i don't need a new van......because if the potential to increase my rate is there who needs a reason.
So I've earned £1200 by Wednesday so can afford to work for a lower hourly rate for the rest of the week, why should I? I agree if I don't have work for Thursday & Friday then any money I earn even at a lower rate is still more than I would have if I did'nt do any work but does this not suggest a marketing problem that should be addressed?
You seem to be fixating on our use of the word cheap as in 'cheap work' I can see the confusion when I say 'cheap' I mean 'lower priced' because to me if some cost less then it is cheaper...... although the term cheap work has other negative Connotations which adds to the confusion.
My personal opinion is a sliding scale is both morally wrong ( why does one customer get the services of a professional person for less than another purely based on his previous day's income) and business wise wrong.
We are not going to agree on this subject but it is still an excellent topic & very thought provoking (which is always a good thing)
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What utter rubbish, again
Thank you for that well thought out and researched response..
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Why do the rest of the week at a cheaper price just because you had a few good days? just carry on charging your usual price to make even more money :) don't use your "what you'd like to earn figure" as an end goal, use it as a bench mark to smash through.
Of course, if you are struggling for work or suffering from a quite spell then by all means do what you have to do to put meat on the table, don't listen to me. That might mean lowering your price slightly or giving a deal i.e. 3 for 2 price or free carpet clean with suite clean etc.
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I struggle with lowering prices as in,
You clean the upstairs of Mrs X on "the close" and charge her £90
She then tells friend up road who then calls you (same house size)
You do her house for £60 so she then tells Mrs X she paid less.
To me it makes your business a bit hit and miss
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Why do the rest of the week at a cheaper price just because you had a few good days? just carry on charging your usual price to make even more money :)
Read my explanation as to why you might do this again above.
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I struggle with lowering prices as in,
You clean the upstairs of Mrs X on "the close" and charge her £90
She then tells friend up road who then calls you (same house size)
You do her house for £60 so she then tells Mrs X she paid less.
To me it makes your business a bit hit and miss
Clearly you would not charge neighbours differently unless there was a time gap between cleans, if you read the above it says you can target others areas of the business, it might be a shop,doctors surgery, front end of an office or a different geographical area altogether etc etc,, you may well market area cleans only ie no moving of furniture which would be lower priced, I think this is where Mike was getting confused as well.
By the way Mike ' he who casts the first stone 'and all that ;)
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Hilton, you have simply come up with a ludicrous idea and you have been called on it. Thats something you will have to deal with. No amount of trying to defend what is a mental is going to make what you have suggested sound appealing. As has been said, to put food on the table is maybe a different story but you were not referring to that. Heavens, if you have made your ''money'' by Wednesday you are already doing something right, take the days earned to be off to carry on getting the work that finishes your week by Wednesday, thats the smart move. Its really not difficult to work out, but then........
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50k euros in profit if what I am looking for and sure I will have it in 2-3 years, I am sure that this plus wifes 15-20 is enough to make a good living.
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Something I have to deal with ;D
Look you don't understand it, its so far out of the box for you to comprehend that you are clambering for safety of another leaflet drop, thats okay, I get it but please do not dismiss it with any great authority on the subject when you have none.
Come back with some sensible thought out concerns and I will explain it to you like a grown up, otherwise just accept that there are other methods out there of marketing and business models apart from what you have read on here or bought from a supplier and let those who might benefit from some fresh input get on with it or not as the case may be, choice is theirs......this is supposed to be a 'forum' after all.
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Hilton, you have explained it very well, very well indeed and the more you explain it the more it doesn't make sense. Not just me, all the comments are calling on how ridiculous what you are suggesting is. You are suggesting that after you have done very well to market to a ''lesser'' value client which will bring in more lesser value clients. Thats is utter madness and no amount of you waffling on is going to change that. So here is a what I feel sensible question, why would you market to a ''lesser'' client when you are already getting a ''higher'' end client, is it not better to still serve the higher end ones? Take Thursday and Friday off or serve the ones that are affording you to finish work a couple of days early. Or you are just complicating what isnt difficult. Last comment because this has run its course. From a figurative point. Each day is worth £100. 5 days therefore equals £500. Your way of thinking is, Monday to Wednesday is is worth 300 and then, lets do less paying work for the rest of the week, even at 80 each day, the total is now only worth £460. Or are we missing something. I know that was very basic but I was trying to keep it simple for you
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Like I said you haven't quite grasped it have you ...?
You have tried to steer it away from the core subject which is hourly worth to earn annually what your target is but that's okay , I can understand why you would want to do that.
So on the very basic question you have asked, the lesser (the arrogance on this site is sometimes astonishing) market as you put it can prove very effective in building towards your annual target if you do not have enough higher value work to fill the month, this ( as I thought I had explained) can help the CC reach the breakdown figure for the week or month,, if however you have enough higher value work to reach you target then quite blindingly obvious you would not have to do this.
I realise that of course up there on your perch looking down on us mere mortals you never get any inquiries that reach your lofty high end status but 95% of CC probably do , they could then cherry pick the ones they want to do to reach the target.
Thank you for your interest though,
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"the lesser (the arrogance on this site is sometimes astonishing) market as you put it can prove very effective in building towards your annual target if you do not have enough higher value work to fill the month"
Why try to achieve your target with lower value work.....when you can fill it with high value work......that makes no sense if you want to build a quality business.
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Have you actually read what's been posted above ?
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The FACT is it doesn't matter what you earn per hour, day, week, month or per annum or what your final turnover is!!!
You can earn a £1,000,000 per annum but if it costs you £990,000 to get there it is pointless.
You are worse off than the man who earned £20,000 and it only cost him £5,000 to do it.
Turnover is Vanity nothing else!
Net Profit is what counts whether you earn £5 or £55 per hour!
Kev
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The FACT is it doesn't matter what you earn per hour, day, week, month or per annum or what your final turnover is!!!
You can earn a £1,000,000 per annum but if it costs you £990,000 to get there it is pointless.
You are worse off than the man who earned £20,000 and it only cost him £5,000 to do it.
Turnover is Vanity nothing else!
Net Profit is what counts whether you earn £5 or £55 per hour!
Kev
All very good and clever but....had you followed the thread you would have seen in the example that I mentioned the margins which in CC are very high (conservatively) at around 70% which on £75K would on average give around £52500 gross OR £1000 per week or £25 per hour, very good by any industry standard this is before ordinary expenses assuming you operate from home you could expect very high profit margins
Just imagine all the £25.00 jobs you could do to get to that.. ;D
So what your worth is, is very important indeed, hourly, weekly monthly and especially annually.
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Just imagine all the £25.00 jobs you could do to get to that.. ;D
What does this mean above exactly?
None of your post changes the fact that it doesn't matter what you earn. It is the amount of net profit you have left after all expenses that count! Whether you operate from home or a multi million pound premises doesn't change my underlying point of fact! Does it?
Kev
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£75k / 52 weeks =£1442 PW / 5 Days =£288 = 11 Hours work a day 5 days a week and no Holiday...no Ta.
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The thing about net profit us it will never exceed your gross takings, so it ok to say that it's profit not taking that count but if your takings are low then your profit is equally low.........but if your takings are high even if you expenses are very high (which makes your profit low ) you still have the potential to have a high profit by bringing your expenses down. This cannot be done with low takings as even if your expenses are zero you still won't exceed a low profit.
If you earn £5 a hour your profit will never be more than £5. but if you earn £55 an hour even if you have £50 expense and earn the same £5 as the other guy....... you still have the potential to increase it to £55
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Just imagine all the £25.00 jobs you could do to get to that.. ;D
What does this mean above exactly?
None of your post changes the fact that it doesn't matter what you earn. It is the amount of net profit you have left after all expenses that count! Whether you operate from home or a multi million pound premises doesn't change my underlying point of fact! Does it?
Kev
I fail to see what point you are trying to make.
What carpet cleaner do you know is ever going to 1m in sales and then 900+ in overheads , your post is not relevant at all.
BUT if I were to have 1m in business I would be very pleased indeed AND if it did have those overheads I would strip out the costs and be very happy indeed with my annual return.
It's a very silly example to use though.
(The £25 bit you would understand if you read the entire thread)
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£75k / 52 weeks =£1442 PW / 5 Days =£288 = 11 Hours work a day 5 days a week and no Holiday...no Ta.
Holidays and weekends have been taken into account in the example .....I thought that was obvious
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Hilton has dug himself a hole ;D it seems to be his party trick. ;D
Thing is those lower priced customers will always be low priced customers. Your going to have a miss mash of a business.
What happens when Mr Smith (high end) finds out you do also do half price work depending on which days you book or price by area or which car they have in the drive.
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At the end of the day 90% of CC just want to make a decent wage at the end of the week.We are not all trying to run ICI,for younger members ICI was one of the biggest companies in the UK in the 70's ;D ;D
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Hilton has dug himself a hole ;D it seems to be his party trick. ;D
Thing is those lower priced customers will always be low priced customers. Your going to have a miss mash of a business.
What happens when Mr Smith (high end) finds out you do also do half price work depending on which days you book or price by area or which car they have in the drive.
All business's have a miss mash of customers you are deluding yourself if you think otherwise and plenty of people work on a post code basis in all manner business's, you can not be that naive to think otherwise.
How many business's out there operate senior citizen discounts or veteran discounts, I knew a very successful CC who used to to offer a discount Monday ,once a month the last Monday was discounted mainly on area cleans the lower value customers(but not just them) used to pile in and he cherry picked what he wanted to do, all based around his monthly targets, worked a treat for him.
So where's this hole ;)
By the way, what exactly would Mrs Smith be finding out about ?
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Hilton
Your hole lies in time . As time in a week is limited .
So if you set £1000 for the week and get £700 for weds then fill your week with cheaper jobs then it is likely that is what you will always get. If I have a day off I do my website work or cut the grass .
You haven't accounted for self development , I would rather do two days at £200 and nothing the rest than work for less which I do regular and guess what something else turns up or I save some money by doing other jobs that needed doing
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I don't get this....
If a job comes in I go and survey it and give a price that reflects the amount of work which needs doing and the amount of money I need it to bring in. I have a pricing structure which allows me to earn what i need off of each type of work. Does it matter what it is? Its all work. Some times big jobs come from small jobs and small jobs come from big jobs. A standard approach to pricing work is fair and doesn't surprise any one except for price shoppers, and they are not worth the energy trying to please. To have a sustainable long term business I don't think you can completely rule out any size of job or have double standards on pricing. Every time you lower the price to try to gain a contract you are digging the business further in to a premature grave. In my opinion of course.