Should I charge more?

The company I am doing work for has been going through some changes. The boss of the company has leukemia, and has not been making it to work. I assume the secretary is now taking charge, because she has been cancelling my work and rescheduling the fleet washing. She wants the fleet washed once every three weeks now instead of two. Now that the trucks and trailers are way dirtier than normal, is it ok for me to charge more?
 
oh and yes you can charge more, the question is should you cahrge more considering the situation? I would not considering what they are going thru.

I would also let her know that you SHOULD be charging more, but won't - for now - considering the circumstances. If their vehicles are looking SO much worse, I might consider offering -temporarily - to lower the current price a little and keep the fleet looking the way the boss would want. Just a few thoughts.
 
John,
Never lower your prices? If you lowered prices for me, I'd expect it to stay there. Why were you charging me more before? Why couldn't you keep the prices low? Eventually they will look for a lower price. You will be out again unless you lower your prices again?
I never lower prices. I only would do less work.
Our cost are based on our companys needs. If I lower prices, someone has to suffer.
Just my 2 cents.
Thank you.
 
John,
Never lower your prices? If you lowered prices for me, I'd expect it to stay there. Why were you charging me more before? Why couldn't you keep the prices low? Eventually they will look for a lower price. You will be out again unless you lower your prices again?
I never lower prices. I only would do less work.
Our cost are based on our companys needs. If I lower prices, someone has to suffer.
Just my 2 cents.
Thank you.

I hear that all the time about never lowering prices. I raise my prices all the time and with a valid explanation it usually isn't a problem. I raised them at least every two years in my former business.

Why do people say that all the time?
 
Tony,
If we lower our prices, we are giving the customer a bad vibe.
They want to know all the questions I listed eariler.
Never lower your prices? If you lowered prices for me, I'd expect it to stay there. Why were you charging me more before? Why couldn't you keep the prices low? Eventually they will look for a lower price. You will be out again unless you lower your prices again?People that lower their prices have an agenda. #1 They are going out of business and need to recover anything they can? They may feel this is a last dance before the lights go out? They are not sure of what it cost to run their business? They don't have any idea of how to run a profitable business. Too many reasons not to lower prices.
Knowing what it cost to run your business is only the beginning. Having the tools to run a profitable business is necessary.
The UAMCC has a goal to help contractors to accomplish this goal. Being profitable. Having a organization is the answer for those who really don't know what to do. I am not promoting any organization, just relaying info to help others.
Lower prices are all around us. Check out Kohl's, or any other store this year. Everybody is discounting everything. I have to wonder how I can buy a shirt from Kohl's for $9.00 that was regularly priced at $45.00? Someone out there is paying too much for the same shirt.
If we set our pricing at the correct amount to begin with, keep tabs and an up to date financial plan we should be OK. Reducing our prices means we were over charging, don't know how much to charge, etc. everything I stated before. We raise our prices according to our financial plan. This year we will raise our prices when everyone else is lowering theirs. Next year we will still be in business. Thank you.
 
lowering your price is basically telling the customer that you could have did the job at a lower charge before. i understand what the company owner is going through. stay your course. i have people ask me if thats the best i can do? i tell them that "i always give my best price, if i didn't. i would feel like i'm being dishonest to them. i always give my lowest price", if they want to negotiate,i tell them we can do less if they want. if it were me i would tell them that you should charge more since the trucks will be dirtier, but you will defer it for now and if you start to lose money, then you will have to increase. not trying to be harsh.
 
I like the way that sounds, Mark. And thanks to everybody else for their input. If it takes me any longer to wash the trailers I'll definitely raise the price
 
His prices could reflect the lower fuel prices.If I were still having to pay $4.00 for fuel it would cost more to do the work.I would change my price unless it wasn't worth it.You know what you need to make money.The question is if you can do it and still make money then you should.

The thing about prices is everyone has their own numbers.I can wash cheaper than someone in New York because the costs associated with doing business in different regions.

I think the reason they are going three weeks instead of two is they save the cost of nine washes a year.This economy is a different animal, no one has seen this before unless you are really old because it is as bad a the geat depression in some aspects.If you have work then hold on to it.
 
I would keep the prices where they are at for now because of what the owner is going through.

Look at it this way, say you are doing more work and go in and want more money because the trucks are more dirty. If you do not have a contract then they can just say that they will pay more or call someone else.

It really could go either way but on the down-side look at it through their eyes, a guy that cleans for them is wanting more money while the owner has leukemia and might die, that looks bad and word will get around fast about something like that if it comes across the wrong way.

I understand your point and have been in a similar situation but I kept my prices where they were at because later on they remember you and good word of mouth gets out and will help you sometimes.

Just my opinion.





__________________
Superior Power Washing<O:p</O:p
Chris Chappell <O:p</O:p
Fleet Washing in Corpus Christi Texas
 
I feel that if I keep my price where its at, that the business will remember that I accommodated for them, and like you said, put out the word about my good business practices.
 
Terry,

First, I know this was originally a post on a fleet washing account. It referenced a specific situation and an answer was requested. But it turned into a discussion on lowering prices in general.

You wrote:

If we lower our prices, we are giving the customer a bad vibe.

Is this what happened with the cell phone companies? I remember paying 80 cents per minute and having cell phone bills over $1000.00 per month in 1987.
Did the customers get a bad vibe when prices went down? I didn't, I understood that technology and good business practices allowed lower pricing.


You wrote:

Never lower your prices? If you lowered prices for me, I'd expect it to stay there. Why were you charging me more before? Why couldn't you keep the prices low? Eventually they will look for a lower price. You will be out again unless you lower your prices again

Well, in that case I'm certainly glad you aren't one of my customers. I've actually reviewed the few accounts that were brought in by my former salesperson and LOWERED the inflated prices he charged them. He liked the easy ones that could be manipulated. I LOWERED THE PRICES AND I TOLD THE CUSTOMERS WHY I DID IT, AND APOLOGIZED. I haven't lost a single one of them!

I've lowered prices when the work was LESS than anticipated. I've RAISED prices when the work was MORE than anticipated and never have I run across a customer like you claim you would be.

Maybe your experience has been that they will eventually "look for a lower price" because you had to raise yours. As some of the other long time business owners here can probably tell you, your customers are almost ALWAYS looking for a lower price. That's their JOB in most cases.

It's our job to convince them that we are giving them something for a fair price that allows us to make enough profit to do the work RIGHT.

You wrote:

People that lower their prices have an agenda. #1 They are going out of business and need to recover anything they can? They may feel this is a last dance before the lights go out? They are not sure of what it cost to run their business? They don't have any idea of how to run a profitable business. Too many reasons not to lower prices.
Knowing what it cost to run your business is only the beginning. Having the tools to run a profitable business is necessary.


This is more classroom BS. "Walmart is SLASHING PRICES" (they must be on their last dance before the lights go out.) Give me a break.

You said:

The UAMCC has a goal to help contractors to accomplish this goal. Being profitable. Having a organization is the answer for those who really don't know what to do. I am not promoting any organization, just relaying info to help others.

I'm all for the UAmCc, but if business advise straight out a a textbook written by professors who have never made a dime other than living off the public teet is going to trump real life experience, then I would suggest that new business owners on the board take advice from another source. The hard rule of "never lower your prices" is textbook crap and it has no place in the real world of business.

How much did you pay for gas last year? Has the price gone up and down? What about groceries? What about computers? Why aren't you on the phone yelling at Hewlett packard about why you had to pay $2500 for that computer 10 years ago and now it's $500 when last year they were $300?

Things change, prices have to go up and down to remain competitive.



Here's another unsubstantiated textbook statement:

Reducing our prices means we were over charging, don't know how much to charge, etc. everything I stated before. We raise our prices according to our financial plan. This year we will raise our prices when everyone else is lowering theirs. Next year we will still be in business.

You know, you must have the same business plan as my largest competitor in town. Unfortunately for him, his plan didn't account for someone else coming in and doing the same work for almost half the outlay. I can charge lower prices because I've spent my money and time (exactly as spelled out in my business plan, of course :rolleyes: ) perfecting the JOB so it costs me a lot less to complete the job than it costs him. I certainly hope he keeps the same business plan you have going because when he DOESN'T LOWER PRICES I will run him completely out of business as he sits on his laurels.

What I've done is not lowballing, unless you want to call Allegiant airlines "lowballers" just because they had a better plan and put it to work resulting in a better deal for their customers. Look up Allegiant and compare their profit to all the others.



Textbook business knowledge has it's place - ON A RESUME when you fail in business and have to work for someone else.

I know this post may sound a little harsh. It's meant to. These young guys on here are relying on us who have owned businesses for a while to give them good information based on our experience in business. We owe it to them to give more than just textbook advise. They could get that at any JR College.

The original question on this post was in regards to keeping prices the same for less frequent services/per service or charging more/per service because the fleet was going to be dirtier.

Here's my answer for that and it comes from dealing with customers that are human beings and not keeping a Business Plan on the straight and narrow:

I personally would keep my prices the same for a year or for the rest of the year and tell them you are doing it because you understand the situation they are in right now and as long as you are able, you'd be glad to share the burden with them if it will help. If they go out of business what have you lost? You've built a treasure somewhere else.

There's my 2 cents.
 
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I would not lower prices but I would ask about it being cut back on from the sense that is it temporary or the new deal. And why? (she may be changing it to three weeks simply because she never thought it was worth it anyway because the trucks always seem dirty to her anyway, thats just how a woman think) And changing it because he's not there to over ride it,,, explain again not being harsh but I need to point out to you that the trucks are 50% dirtier now which takes probably 25% more time and chems at least. I can deferrer a cost increase for now if this is a temp thing but if it's not I'm going to have to adjust the price alittle. Leave it on her door step to decide what she wants to do but don't throw yourself into a re-bid just an "adjustment". If she says "well I don't know bla bla bla trying to duck the issue make it tangible with the 50% dirtier and 25% more cost. Thats like me dropping my price by 25%...I'm sure you can understand in this economy no one can afford to drop their price by 25% If I were still doing a two week rotation and came in here and asked for a 25% raise you'd throw me out like I was trying to rip you off..It's the same 25% I'm losing so if were going to a three week roto maybe we can meet in the middle somewhere. (maybe use 30% instead of 25% and meet with a 15% increase or whatever suits the margin you need but you get the idea) And explain that pretty much covers your cost thats not a profit. But your willing to do this amount because you value there biz as a long term cliant...She's left basically in an indefensible position and you get a bump.
 
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I can understand what your saying Tony but that sounds like good advice for a company that can afford too because your BIG enough to hire sales people and staff and have the phone ringing all day long with established customers. For us guys that are making our own calls hoping to get work for next week is a whole different issue. You can't drop prices on the few rolling jobs you have...The price drops you mentioned above about computers and cell phones are apples and oranges compared to MY labor and time IMO. You paid 2500 for a computor because you had too...same for .80 min for cell...I'm sure you didn't like 1000.00 cell bills but what did you tell yourself and or significant other? "I have to have it to operate my buisness"...I would bet you didn't see it as a choice. I'm not against adjusting prices some in the right situation but theres a big difference in working for yourself, getting the work, doing the work OR working for yourself with people to do the work for you. Its like some big shot restaurant owner coming out and slapping backs comping out meals right and left playing big shot leaving the waiter standing with a 2 buck tip because the owner came out and deferred the attention away from his hard work leaving the people with an entitlement attitude. Most of us out here can't afford your business plan. Were just trying to make a living not run a corporation. Your response sounded pretty harsh and almost arrogant to me. He may not be able to afford your business plan either. Most of us don't have budgets,,,say for advertising,,, we have payments for the add and hope enough work comes in next month to make all the "payments". I may have read it wrong but that made you sound like your trying to pat yourself on the back and or too big and out of touch to be giving any of us advice,,,thats just my opinion.
 
I can understand what your saying Tony but that sounds like good advice for a company that can afford too because your BIG enough to hire sales people and staff and have the phone ringing all day long with established customers. For us guys that are making our own calls hoping to get work for next week is a whole different issue. You can't drop prices on the few rolling jobs you have...The price drops you mentioned above about computers and cell phones are apples and oranges compared to MY labor and time IMO. You paid 2500 for a computor because you had too...same for .80 min for cell...I'm sure you didn't like 1000.00 cell bills but what did you tell yourself and or significant other? "I have to have it to operate my buisness"...I would bet you didn't see it as a choice. I'm not against adjusting prices some in the right situation but theres a big difference in working for yourself, getting the work, doing the work OR working for yourself with people to do the work for you. Its like some big shot restaurant owner coming out and slapping backs comping out meals right and left playing big shot leaving the waiter standing with a 2 buck tip because the owner came out and deferred the attention away from his hard work leaving the people with an entitlement attitude. Most of us out here can't afford your business plan. Were just trying to make a living not run a corporation. Your response sounded pretty harsh and almost arrogant to me. He may not be able to afford your business plan either. Most of us don't have budgets,,,say for advertising,,, we have payments for the add and hope enough work comes in next month to make all the "payments". I may have read it wrong but that made you sound like your trying to pat yourself on the back and or too big and out of touch to be giving any of us advice,,,thats just my opinion.

I really must have been too harsh. I was trying to convey exactly the opposite of what you read into it.

My point was you can't go "by the book" and just determine that "I'm not going to lower my prices under any circumstances because that's not in my plan."

By the book entrepreneurs seldom rise above mediocrity.

I have a bid to run off to. I'll continue my apology for the harshness later.
 
I can understand what your saying Tony but that sounds like good advice for a company that can afford too because your BIG enough to hire sales people and staff and have the phone ringing all day long with established customers. For us guys that are making our own calls hoping to get work for next week is a whole different issue. You can't drop prices on the few rolling jobs you have...The price drops you mentioned above about computers and cell phones are apples and oranges compared to MY labor and time IMO. You paid 2500 for a computor because you had too...same for .80 min for cell...I'm sure you didn't like 1000.00 cell bills but what did you tell yourself and or significant other? "I have to have it to operate my buisness"...I would bet you didn't see it as a choice. I'm not against adjusting prices some in the right situation but theres a big difference in working for yourself, getting the work, doing the work OR working for yourself with people to do the work for you. Its like some big shot restaurant owner coming out and slapping backs comping out meals right and left playing big shot leaving the waiter standing with a 2 buck tip because the owner came out and deferred the attention away from his hard work leaving the people with an entitlement attitude. Most of us out here can't afford your business plan. Were just trying to make a living not run a corporation. Your response sounded pretty harsh and almost arrogant to me. He may not be able to afford your business plan either. Most of us don't have budgets,,,say for advertising,,, we have payments for the add and hope enough work comes in next month to make all the "payments". I may have read it wrong but that made you sound like your trying to pat yourself on the back and or too big and out of touch to be giving any of us advice,,,thats just my opinion.

Ok Randall,

After rereading what my post and yours I see where you came up with that. First, I'm no different than you. I may have owned businesses for a few years, but this particular business (Sonitx) has only been going for about four years and at least two years of that was tip-toeing along learning from mistakes.

Here is the original question:

The company I am doing work for has been going through some changes. The boss of the company has leukemia, and has not been making it to work. I assume the secretary is now taking charge, because she has been cancelling my work and rescheduling the fleet washing. She wants the fleet washed once every three weeks now instead of two. Now that the trucks and trailers are way dirtier than normal, is it ok for me to charge more?

He's just saying the owner is sick, the secretary is reducing frequency resulting in more work at a less frequent interval because the trucks are dirtier.
And he's asking if it is ok to charge more for the extra work of cleaning the dirtier trucks.

Russ and John I'm sure, gave answers based on just plain old hard earned business sense. A little goodwill with the customer goes a lot farther than "holding the line" to some "business plan" or "ideal" of "never lower your prices".

Terry's remarks about people who lower their prices must be in financial trouble or they don't know the cost of running their business was an untrue statement as I tried to show by comparing Allegiant airlines and Walmart, both of which lower and raise prices all the time with no consequence except for a HUGE market share.

The examples he gave in regards to buying a $45.00 shirt at Kohls for $9.00 because they are "on the way out" doesn't have any relevence to this thread. This was simply about whether or not to share in the difficult financial situation of the fleet company or toss the account. That's not about liquidating like Kohls and Marshalls.

You thought my posts were arrogant and the irony of that was I posted what I did because I thought Terry's posts were arrogant and condescending to the guys who are just trying to make a living and can't hold fast to "business school" rules like you and me. I thought he was advocating "holding the line" of not lowering your prices at all costs because if you do you look like a loser.

And, by the way, your 10:52am post was right on the mark, if this fleet thing turns out to be just a stupid secretary trying to cut corners. But if there really is financial difficulty due to sickness it changes things and just from a human standpoint it's better to suffer along with someone if you can. You can't lose that way.

If you thought my post was arrogant, and it wasn't meant to be, then I guess it's possible that I thought Terry's post was arrogant and he didn't mean it that way either.

I didn't mean to sound arrogant, I'm no better than anybody else here, in many case I'm sure I'm far worse. I can't even clean concrete much less a truck. I have owned a few businesses though and I was just trying to counteract what I've experienced to be really bad advice.
 
Great advice guys, sometimes you have to add in the Human element because we all face hard times sometimes, some more than others.

Nobody really knows if the owner is really sick or not but why not just take her word for it and "pay it forward" by keeping the price the same but if you find out different, make the necessary adjustments.

Remember, "what you give out comes back 10 fold" I am not sure who I heard that from first when I was growing up but I have seen it happen often.

Keep up the good work guys.





_______________
Superior Power Washing<O:p</O:p
Chris Chappell<O:p</O:p
361-853-2513
Low Pressure Roof Cleaning in Corpus Christi Texas <O:p</O:p
Cleaning Shingle and Tile Roofs in Corpus Christi Texas
 
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