pricing your services aiea october 2018 - bryan worn...microsoft powerpoint - pricing your services...
TRANSCRIPT
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
www.bryanworn.com