pricing your services aiea october 2018 - bryan worn...microsoft powerpoint - pricing your services...

HOW TO PRICE YOUR

PROFESSIONAL SERVICES

Presented by:

Bryan Worn

Your Clients

1. Price is what they pay

2. Value is what they get

3. The Gap

Realising a Dream

or havingan absolute nightmare

$ Value of Employment

• Salary $150,000• SGC $ 14,250• Total Package $164,250

• Days worked 240 (5 days X 48 weeks)• Less Public holidays 12•

• Notional Days worked 228

$ Value of EmploymentNotional Days worked 228 (5 days X 48 weeks)

• Less:• Long service leave 4• Training & Prof. Dev. 5• Personal leave• Sick days 10• Parental leave • Maternity leave 19• Net days worked 209

• Per day $786 ($164,250 ÷ 209)

$ Required if Self- employed

• Say $800 per day

• 5 day week is $4,000

• Only delivering 3 days $1,309 per day

• What costs do you have to add on ?• Car, Phone, Office , Internet, PA, VA etc.

$ Required if Self- employed

• Practice overheads $40,000 pa

• Only delivering 3 days $300 per day

• Daily Labour Rate $1,309

• Daily Rate $1,600

Why People Buy

The Pizza Principle

We can learn a lot from

Baked Beans

The GAP

Know your strengths more than

your weaknesses

Revenue Components

• Living Expenses $84,000

• Business Expenses $56,000(Include Future Expenses)

• Revenue Required $140,000

• Net Profit $100,000

• New Revenue Target $240,000

• Corporate Overheads $60,000

• TOTAL REVENUE (Service Business) $300,000GROSS PROFIT (Products Business)

Revenue Components

Work 46 weeks per year 46

X

Charge 25 hours per week 1,150

Revenue required $300,000

Hourly Rate $260

Selling Hourly Rates

Labour Cost 33.33%

Overheads 33.33%

Profit 33.33%

Price 100%

Product Mark Up

Cost $100

Mark up 70% $70

Sell Price $170

Gross Margin % 41%($70 ÷ $170)

Key Question

Fixed Price

Or

Hourly Rates

Where to from here?

But, But, But,…. resistance

Will change at some fuzzy point in the distant future

Want to formulate a plan?

Ready to act now?

Bryan Worn helping business owners move from Start-Up to Grown-Up CONTACT HIM ON

0437 000 377

bryan@bryanworn.com

www.bryanworn.com