Hello Adventurous Ones! Christmas has come and gone once again and I do hope that you managed to survive the shopping frenzy of this holiday season and that you had family and friends to share it with.
Continuing on with the Home Business Series, today I'm going to talk about pricing. I'm hoping to make this as painless as possible for you. Pricing is always one of those subjects that makes a person sweat for some reason - always with the question of "if I set my price at this point, am I charging too much or am I not charging enough for my services".
Continuing on with the Home Business Series, today I'm going to talk about pricing. I'm hoping to make this as painless as possible for you. Pricing is always one of those subjects that makes a person sweat for some reason - always with the question of "if I set my price at this point, am I charging too much or am I not charging enough for my services".
The first consideration is to determine what exactly you need to "live on" and what main expenses you might have. You must be realistic about this. It is going to take time to get your business "known", so you aren't going to have a steady stream of income right away. I believe the largest expense you would have would be home liability insurance in case someone would get hurt in your home or on your property. You may already have this if you own a home and may be able to use a portion of this insurance as a tax deduction if you have a home business, but you would have to check this out as it is different in every state. If you rent, you probably have renter's insurance, but might consider making sure your policy covers injury as well.
The second thing to consider is "where" you live. For instance, I live in a small town in Central Iowa. The closest five towns (including the town I live in) are from 5 minutes to 30 minutes apart. The larger city of Des Moines is 40 minutes away. Since I live in the small town, I need to price my services reasonably because people who live in small towns expect to pay less. If they wanted to pay more, they would go to Des Moines. If I lived in Des Moines, I could charge a lot more for my readings because people expect to pay more there as the market supports it.
The third consideration is taxes. How much you take from each reading to set aside for taxes will depend on how much you charge per reading. If your prices are lower, obviously, less money would have to be set aside. As a rule, I take at least 20% from each reading and that is usually more than enough to cover the quarterly taxes in my state, however, you would have to determine what is required in your own state for quarterly taxes.
The second thing to consider is "where" you live. For instance, I live in a small town in Central Iowa. The closest five towns (including the town I live in) are from 5 minutes to 30 minutes apart. The larger city of Des Moines is 40 minutes away. Since I live in the small town, I need to price my services reasonably because people who live in small towns expect to pay less. If they wanted to pay more, they would go to Des Moines. If I lived in Des Moines, I could charge a lot more for my readings because people expect to pay more there as the market supports it.
The third consideration is taxes. How much you take from each reading to set aside for taxes will depend on how much you charge per reading. If your prices are lower, obviously, less money would have to be set aside. As a rule, I take at least 20% from each reading and that is usually more than enough to cover the quarterly taxes in my state, however, you would have to determine what is required in your own state for quarterly taxes.
There is no exact formula or algorithm to help you decide what to charge for your Wee Folk Toracles readings. I would suggest pricing according to what you believe the majority of the people in your area would be willing (or able) to pay. Choose two numbers - for me it's between $40 and $60 per reading - then, either go with the lowest number or something in between the two. You want to make sure that you give yourself room to raise your price if you need to later on without giving the impression that you are suddenly gouging your client's pocket book. If I lived in Des Moines, I could probably charge between $80 to $100 per reading. If I charged less than that, I probably wouldn't get a lot of clients because in the city, people seem to have the mind set that if you don't charge high, then you must not be very good at what you do. Strange mind set, but it's true.
If you are just getting started, I suggest starting at the lowest price of the two numbers you have chosen because you want to get as many clients as you can when you first begin. Give people the chance to get to know you by being affordable, but don't short change yourself in the process. Always keep in mind that, though you are in the business to help people, you must also help yourself. The monetary "energy" exchange is very important. If you are giving great value (and you will be), you must be getting equal value in money.
If you have people making comments that they'd like to have a reading, but they just can't afford it, this is the perfect opportunity to ask them what they would be able to pay for a reading. If you get this comment often, you should take a look at your prices as they might need a little adjusting to support the economy in your area. Of course, if your readings are priced at a point where you cannot lower them due to your expenses, you could always offer a "special" that reflects what these specific people would be willing to pay. There is nothing wrong with offering a "special" if it brings in more clients. After all, some money is better than no money and you want to get known as quickly as possible.
Be logical in determining these "specials". If you are spending an hour with each client, giving them an amazing reading as well as an "ear" to share their stories with you, $20 is not enough. This kind of pricing works if you are doing a holiday fun night (such as Halloween) at a local establishment to get people familiar with you, but it is far too low for supporting a home business.
Don't be afraid to use paper and pen to determine what you need to live on and what your expenses will be for your business. You don't want to just guess and then discover six months down the road that you're in trouble because you didn't take the time to really map things out. Research and planning are important, so do as much or as little as you feel you need to, then price accordingly. It won't take long for you to determine if you need to re-evaluate your pricing.
If you are just getting started, I suggest starting at the lowest price of the two numbers you have chosen because you want to get as many clients as you can when you first begin. Give people the chance to get to know you by being affordable, but don't short change yourself in the process. Always keep in mind that, though you are in the business to help people, you must also help yourself. The monetary "energy" exchange is very important. If you are giving great value (and you will be), you must be getting equal value in money.
If you have people making comments that they'd like to have a reading, but they just can't afford it, this is the perfect opportunity to ask them what they would be able to pay for a reading. If you get this comment often, you should take a look at your prices as they might need a little adjusting to support the economy in your area. Of course, if your readings are priced at a point where you cannot lower them due to your expenses, you could always offer a "special" that reflects what these specific people would be willing to pay. There is nothing wrong with offering a "special" if it brings in more clients. After all, some money is better than no money and you want to get known as quickly as possible.
Be logical in determining these "specials". If you are spending an hour with each client, giving them an amazing reading as well as an "ear" to share their stories with you, $20 is not enough. This kind of pricing works if you are doing a holiday fun night (such as Halloween) at a local establishment to get people familiar with you, but it is far too low for supporting a home business.
Don't be afraid to use paper and pen to determine what you need to live on and what your expenses will be for your business. You don't want to just guess and then discover six months down the road that you're in trouble because you didn't take the time to really map things out. Research and planning are important, so do as much or as little as you feel you need to, then price accordingly. It won't take long for you to determine if you need to re-evaluate your pricing.
No comments:
Post a Comment