Are you charging enough?

Even if you’re charging ‘enough’, are you charging the best way to support your business model and goals? Let’s consider some creative and profitable options.

Ok, so you offer a set of services in your business, how should you charge for them? Well, how could you charge for them?

• Each service you offer could have a fixed charge, as a dentist does… A cleaning is a fixed price, an x-ray is a fixed price, etc.
  • Or if you are more product oriented, you could charge like a pizza shop
    • A small cheese is one price, a medium another and a large another
    • Then there is the add on price for extra toppings.
• You could charge by the hour like an attorney does.
• You could have a price per unit and the service price is the number of units.
• You could bundle your services together and charge for a solutions-oriented project.
• You could charge a monthly fee for ongoing support.
• You could have subscription fee for particular fixed product or service.
• Can you think of more?

Each has its advantages and each has its drawbacks. Let’s consider a few examples.

Are you ‘the dentist’?

If you charge a fixed price for a particular service that can vary in complexity, then you have to either have more services with more prices, or you have to price the service somewhere in the middle so that you make extra on some and lose on others.

In my dentist example above, I over-simplified it on purpose. In reality, dentists have hundreds of line items to account for the level of difficulty or the amount of time for similar but different services. I would not be surprised if the dentist has a couple dozen items for fillings (size of filling, which tooth, type of filling, difficulty of the procedure, use of novocaine or not) and if it is a replacement. There are probably additional line items for removal of the old filling.

I don’t know about you, but I certainly don’t want to have to deal with that many line items in my pricing model! So unless my services can be put into a tight box, I’m not inclined to go with the fixed fee for each service route. However, it may work for your business.

Are you ‘the lawyer’?

Charging hourly might work well for you if you have one or a few levels of service. An attorney has several levels of service….the legal secretary, the paralegal, the associate lawyer, the partner lawyer, etc. Each can have a fixed priced per hour for their services. This can work, but you and all your people have to be diligent in tracking their billable hours. I have found that many clients do not want to write an open-ended check.

Are you ‘the consultant’?

We tend to most often use the solutions-oriented project model. We work with the client to create a detailed specification of what they are trying to accomplish. From there, we map it into our offerings and define an estimated price to complete that project. This has been successful for both the client and us. We know what we have to do and when, and the client knows that, assuming no changes, he/she has a pretty good handle on what it is going to cost in the end.

Now for the secret sauce…

This finite project often leads into a monthly fee for ongoing support. Once we finish the initial project, there is often more to do, to develop, and to maintain. We propose a follow-on monthly agreement to accomplish that.

Lastly, we have several products that are simply subscription-based such as our Secured Managed Hosting and our JoomFuse integration between Joomla and Infusionsoft.

These two revenue lines provide ongoing, predictable, and reliable income streams and can be added to any business — digital, service-oriented, or bricks-and-mortar.

Step back and consider the whole picture

There are many ways to charge, and there is no one right method. The key is to match how you charge to your business model and your product/service offerings.