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How Do I Determine What to Charge for My Services-

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How Do I Determine What to Charge for My Services- Powered By Docstoc
					?This is the most asked question people have when starting a service business. Pricing
is always a tricky art. It requires research and experimentation. The wrong price could
drive your customers away, or it could even break your bank. The right price could
draw a ton of money and make some you very happy clients.

My own rates vary depending on the type of service I'm supplying, the location my
customer lives in and the size of my customer's business. My price always increases
as my knowledge increases.

Some of my services are in high demand, so I can charge more. Some of my other
services I am one in many that customers can choose from, so my rate needs to be
more competitive. If I work for a larger company, they tend to be able to afford more.
Individuals have smaller budgets.

What you charge is dependent on the market, as well as your own unique marketing
and business angles. The best way to determine what price is right for your business is
to do some research. The following suggestions should help you with your research:

1. How much is your service worth to your client?

Ask around. Ask your customers what they would be willing to pay for a particular
service. Just come right out and ask or conduct a survey. Ask other businesses what
they are charging for their services. Call and pretend to be a potential client. Find out
how much they would charge you. Look for articles and forums in your field where
you can ask other consultants what they are charging. Many will just come out and
tell you or give you a price range.

2. How much is your client base willing to pay?

Price is generally based off of perceived value. If your customer is going to be saving
money or making money from your product or service, then depending on how much
they will make or save can determine how much they are willing to pay. In some areas
of service, charging too much can cause your customer to go to someone cheaper. In
other fields, not charging enough can cause your customer to think your quality isn't
what they are looking for. You need to remain competitive and stay within the normal
range of your services.

3. Are you charging enough to make it worth your while?

The important part of owning a service business is to make a profit. You need to take
a look at your expenses. Make sure that what you charge is more than what you are
bringing in. A good formula to follow is:

Expenses + Time + Knowledge = Price
Expenses: Your price should take into consideration any expenses you will incur.
Time: The time you plan to spend on the project should be taken into consideration.

Knowledge: Your price should be commensurate with your knowledge. If you are
bringing years of experience to the table, your price should reflect that.

When deciding how much to charge do your research first, then experiment. Test out
different prices and rates to see what types of reactions you get from your clients. You
can always adjust accordingly with your next client.


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Kimberly Reddington, founder of CereusWomen.com, teaches moms how to turn their
skills into a successful home-based service business and to find a balance between
their work and life. Discover Kim's popular special report by visiting

				
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