What is Reddit's opinion of How Much Should I Charge??

From 3.5 billion Reddit comments

Is your name Ellen Rohr? Because you are basically reciting the premise of How Much Should I Charge

She makes the case in the very beginning that so many small businesses are slowly going out of business because they don't charge enough. But it's happening so slowly that they don't notice it.

It's a very good book and I should probably read it at least once a year just to drive the point into my thick skull!!!

I am absolutely serious when I say this is the most important book you should read.

The biggest mistake new contractors make is charging too little for their services. The above book will walk you through how to come up with the proper pricing. You will be shocked at how high this number is, but you will also be shocked that people will pay it. Charging anything less will mean you are losing money and will eventually go out of business.

Under-pricing is a mistake most contractors make when they first start. The correct price takes into account every single expense of operating the business, and then adds a reasonable profit. I suggest you read this little book. It contains a wealth of information on pricing.

The number one most important thing to do is charge enough money. I suggest you read this book. Many people starting out charge way too little. You must cover every single expense involved in running your business and then add a reasonable profit otherwise you will fail. This sounds easy, but it isn't. You will be tempted to give away free hours for estimates for example. Don't do it. raise your rate to cover these in overhead.

> Lots of these small mom and pop joints almost have no idea what they are doing it seems

This is one of the points that Ellen Rohr makes in her excellent book How much should I charge. No affiliation, I just really liked that book. She points out that a lot of businesses don't even know that they're going out of business slowly, so if you to copy their pricing it's a death sentence for your business.

The sad thing is that you see that online all over the place. People are so focused on getting customers by being cheap that they don't realize they aren't charging enough to stay in business for very long.

Read this book. It's small and easy to read. it will help you correctly price your bids.

I have this discussion with my fellow electrical contractors all the time. Many charge way too little and will eventually fail. When they find out that many of us charge twice or three times what they are charging, they can't imagine it's possible. But it is.

The first step in determining the CORRECT pricing of your services is to do a thorough analysis of EVERY cost of running the business and then charge that amount plus a good profit amount. If you don't do this, you could be losing money and not even realize it. You would be surprised how many contractors just guess at a labor rate or worse yet, copy what some competitor is charging. (Guess what, your competitor guessed at a labor rate.) Here is a tiny excellent book that will walk you through correctly pricing your services. It's very likely this pricing will come out much higher that you currently charge.

Secondly, NEVER TELL THE CLIENT THE LABOR RATE!!! Also don't tell them your markups on material or rentals. In fact, don't tell them anything except the total. They won't be able to handle it. Just give them a fixed quote. If they ask the labor rate, or for a breakdown, just say "I quote by the job, not by the hour". Clients like fixed quotes. They know exactly how much they are going to pay. If your estimating skills are not evolved enough to make fixed quotes, you need to work on this skill.

Thirdly, you don't have to get every job. If a potential client says you are too expensive, say "thank you" and move on. You don't want to work for cheap. You want to get paid the proper price that not only covers all your costs, but also makes you a handsome profit. Working for less will just make you miserable.

I do the above and I get plenty of business. Many former clients refer me to friends and relatives because I do good work and I treat them right. Treating them right in their mind is not price related. Work for these people and your business will be successful and you will be happy.

This is the most important book in my experienced opinion.

https://www.amazon.com/How-Much-Should-I-Charge/dp/0984587624/