How to Get Your Prices Right in 5 Easy Steps

Are you feeling overworked and underpaid? Maybe unmotivated to bring your best to each job? These could be signs that you're not charging enough. Let's dive in and get your pricing strategy on track.

So if you've paid your VAT bill and you're having to top it up from somewhere, from savings or something, it's another red flag. You're doing something wrong. You're doing one thing, two things. Either you're spending too much money, you're spending the honeypot, or you're not charging enough.

Today I want to talk to you about something fundamental for any heating and plumbing business. Getting your prices right. Pricing can seem simple, but a well-thought-out strategy is core to the success of your business. We invited Dan Voice from Prime Fusion onto our podcast to share his wisdom and how he prices his business. Let's break down his approach.

If your overheads come in and you're busy 5 days a week, 6 days a week, and you're missing payments, you're missing essential things like suppliers, insurances Step 1: Understand your costs.

This includes fuel, van costs, insurance, tools, software like Gas Engineer Software, salaries, marketing, and utilities. Dan advises dividing your total annual costs by the number of working days in the year. For a clear pricing strategy, avoid spreading costs over 365 days unless you work every single day. Don't forget to factor in profit, business tax, and VAT. Regularly check your key business numbers to ensure that you're on track.

You can, you can bail yourself out from a short, a short-term problem, but if you keep repeating the same problem, you end up in the same place, penniless or with a business that goes under.

Step 2: Calculate how much you need and want to make. Add your personal expenses to your business costs to find your survival rate. From there, decide how much more money you want to earn. As Dan says, aim to at least double your salary.

A lot of companies nowadays have a minimum charge. You, you see minimum charges on a lot of things like card transactions and or minimum spends in shops. It's to cover overheads. It's a, it's not a new phenomenon.

Step 3: Decide your pricing method. For small jobs, Dan recommends a fixed rate or a minimum charge to cover overheads, as hourly rates can undervalue the work and experience required. For large jobs, break down the project into components to accurately estimate time and costs. This prevents underpricing and ensures you can do your best work without rushing. Step 4: Use all this information to set reasonable prices. Compare them to local and national averages, but don't undervalue your services. As Dan puts it, don't be the cheapest fool in the village. Sticking to your worth is crucial.

Just for argument's sake, when I came back to your software your reminders went on. My servicing rate went through the roof because of that, because I switched you back on and all the reminders— oh, there you are, been trying to find you. So it works, that, that works.

Working with effective job management software like Gas Engineer Software can save you hours each week, reducing costs and increasing efficiency. Step 5: Stick to your prices and know your worth. Lowering prices to get more work can lead to a vicious cycle of stress and underperformance. Trust your services, charge slightly more, and earn what you deserve. For more insights, check out our podcast with Dan Voice, and don't forget to try our pricing calculator to help set your prices right. Let Gas Engineer Software help you manage your business more effectively, letting you focus on what you do best. Start your free trial today and join over 5,000 heating and plumbing businesses already using our software. Until next time, thank you.