I'm sitting here reading this thread and getting flash backs of some of the excuses/reasons that I had used for not charging what I needed to to stay a viable,profitable buisness . I too thought that I couldn't charge " those prices" ,my customers just wouldn't pay them. I went to the seminars,read the books and still did it my way because my area was different .
Then came the day I had to tell my wife that we were losing our home of 22 years be cause I did it my way. We couldn't afford to stay so after some discussions we moved 2800 miles and started over.
That was in 2007. In 2008, in the middle of the reccession I was forced into ownership again and started making the same mistakes all over again.
One day I was talking to a friend who owned his own buissness and I was complaining about not making what I thought that I should,we couldn't afford to do this or that,blah blah blah. He looked at me and just laughed and asked why was I doing it then. He started asking me some very pointed questions about how I charged and what those charges were based on.That was uncomfortable but I got it.I started looking at my costs and started remembering some of the information I had gotten for those seminars . I started applying that info to my buisness and it worked.My labor rate went from 75.00 to 97.50 over night. My parts prices went from list or less than list to a 5 tiered matrix. We charged for all the labor we produced.
I was ready for all the push back I knew I was going to get.
NOBODY NOTICED!!!
My customers still came in and had work done, We still were fixing cars. All those years of struggling and doing without,putting my customers financial well being over mine and my family's for nothing.
Sure I didn't sell every job but the ones I did sell I made money on.
Our average RO was 270.00 is now 497.00 . Our gp on parts was at 35 % to 38 % is now at 50%. OUR labor gp was around 50% is now at 72% . Our total gp was at about 43% is now at 60%. Our net was about 5% is now at 28%.
I will never have to have that discussion with my wife again!
Your customers are coming to you because they trust you, not that shop dow the street. All of your prices have to be based off of your costs .Period. If your basing your prices off of anything else, STOP. Thats like the old joke," I lose money on each job but I make up for it in volume" .
If you can't price your services fairly and make money than why are you doing it!!