Don'T Price Your Small Business Out Of Business

Price-setting is one tiny aspect of small business but obviously an important one as it directly impacts the company’s income or lack there of.

I run a small window cleaning business in San Diego- one that relies on only my output because I am my only employee- and spend a lot of time considering the worth of my time. Whether I choose to charge $5 or $500 for a job it ends up taking the same amount of time so I ask myself, "What’s it worth." (I do realize that many companies charge more for a higher quality service or product and vise-versa, but in my case I would complete every job to the same end regardless the price per piece.)

As with any business, there are always outliers in the competition: folks that are out to scalp the unwitting customer, and those that try to make a living by ruthlessly undercutting the competition. So where should you stand in the spectrum?

Let’s suggest for a moment that you are the owner of window cleaning company. In order to make this supposition more informative, I will quote some prices on either end of the scale to help provide a clearer picture and provide some fictitious names to go with them.

Three Kids Window Scrubbing is the newest window cleaning company in town. Because they are just that, kids, they have no insurance, no business license and travel to every job on their bikes. Every job in completed in less than an hour and they charge a standard rate of $30 per house, regardless of the number of windows. At the end of each job, the customer is generally displeased and each kid leaves with ten bucks in his pocket.

Snooty Sam’s Glass Polishers have been an active corporation for over ten years and provide only the highest quality services. Each piece of glass is cleaned by hand with a single-use lamb skin chamois and the corners of the frames are patted dry with a Q-tip. Then each pane is measured separately so the final bill can be calculated through a complex formula to reflect the square footage cleaned, height of the window from the ground and even the relative filth of the window. Final bill for the same house: $500

Knowing that these two competitors are out there, what would you charge and what kind of service would you provide?

You could lean towards the econo-window-scrubbers, sprint for quantity and probably never be called back but if you do, your business will never grow from referrals and you will end up with a meager living and a tired back.

And if you favor the Snooty Polishers, you may find at the end of the day that although you have provided your customers with a top-class service, your hourly wage is not as high as you had hoped and most of the referrals you get simply cannot afford you.

So I suggest this:
Strive to become as proficient in your trade as possible. Work diligently and efficiently but take the time to get to know your customers. Study your trade and take notes from others who excel in it. What are the tips and tricks that will save you time and boost your salary? Quality work is not soon forgotten and produces the most satisfied clients, but efficiency will produce the most for you.

Do more research to find out what your competition charges. You NEVER want to be in the bottom quarter in the service industries and I would suggest you stay above at least half of the others in your area selling the same product.

In San Diego’s window cleaning industry, I do my best to provide a higher quality service than the vast majority of my competition and therefore am able to keep my prices competitive while allowing myself to survive economically. Where do you stand?