The Anatomy of Pricing

 To price for success in your business you need to sit down and figure out what, exactly, are your monthly, annual expenses. Be honest and detailed. This should include your salary and taxes AND your profit. These numbers will be unique to your business. Take your time and be very thorough.

To simplify things, I am going to use easy numbers so you can easily see what my process is.

From this process, you will find out what you need to make on an hourly basis to have the business thrive. From these numbers, you can make decisions that will benefit you in the long run.

This may be very scary for you if you have been undercharging and surviving from month to month but to get past this and grow, we must face this truth. It gives you a basis on to which you can set goals and make changes. Be honest and through with this step.

Sample  Expenses….

Monthly Operating Expenses___2000.00___________

Annual Operating Expenses ___1000.00____________

Salaries ____4000.00_______________

Taxes __2000.00_________________

Profit __1000.00__________________

Total                                      __10,000.00 per month_____

The next step is …

How many days per week do you work? ____5 days/week___ 20 days/month

How many hours per days do you work?  ___10 hours/day

Now the math….

1.       $10,000 per month divided by 20 days/month = $500/day to make your expenses.

2.       $500/day divided by 10 hours/day = $50 per hour needed

Let’s say you can do a Shih Tzu in an hour and you charge $50.

 A Standard Poodle takes you 2 hours you should charge $100 for that groom.

You will need to groom 200 dogs at $50 each to meet your expenses.

If your numbers bring you under your daily sales goals, you now have a foundation to build on. If you want to work less, you can just plug in different numbers and see what would need to happen to continue to survive and thrive. Changes do not have to happen overnight. Baby steps.

Example…. My goal is to work 4 days a week and to groom 8 hours a day.

1.       $10,000 per month divided by 4 weeks = $2500.00 per week

2.       $2500 per week divided by 4 days per week = $625. 00 per day

3.       $625.00 per day divided by 8 hours/day = $78.00 per hour

To reach your goal of working less and still meet all your expenses and make a profit the business needs to bring in $28.00 more per hour.

How do you do this?

1.       Raise your prices!  You can do it slowly with current clients. All new clients get charged the higher price.  Keep in mind the value of your work and the experience the customer receives needs to support the price. Do not compare your business to the salon around the corner.

2.       Add an employee to be able to do more clients per day. Keep in mind this will add to your expenses. What you pay your employee and your prices will determine the success of this.

3.       Reduce your expenses. Go through your expenses and fine tune. Get rid of the extras you really don’t need. Look at everything under a microscope and save wherever you can. This may mean even making a move to a different location that costs less. Look at every option.

4.       Add additional streams of income to your business. For example doggie daycare, retail, pet photography, pet sitting/boarding, pet bakery.

5.       Utilize Add On sales to increase your average sale per customer. For example toothbrushing, dematting, nail grinding, creative grooming, massage.

Use your imagination and come up with your own unique way to reach your financial goals. These are real numbers that you can make changes and grow from. It does not have to happen overnight, and it won’t. Make a plan and break it down in manageable, attainable steps. Take it day by day. To look at the whole thing at once can be very overwhelming and could just shut you down before you even begin. Start small and everyday work towards the changes in bite-sized pieces. Before you know it, you will be just where you want to be.

You are in control of your own happiness. Pricing is a huge part of not letting business run your life. We deserve to live a life that fulfills us. We deserve health care, a nice home, time spent doing the things we love and spending time with our families. It all starts with deciding to do better. You may not have all the answers at first but just taking a move in the right direction the next step will come, and the next, and the next.

Make 2019 the year of you.