What should I charge?

Pricing is an area many businesses struggle with. It is part science, part art and part psychology. Confident pricing is as much about how we feel about our business and our product/service, as it is about rules and processes.

Many businesses will stick to a cost plus method of pricing. They will add up all the components of a job and add a percentage for profit – job done (?). However, this approach takes no account of the market in which they are trading or the value of their product/service to the customer.

If you don’t know enough about your market you run the risk of overpricing by using the cost plus pricing method. If other suppliers are providing the same product/service as you and charging less than you, you need to know! If you constantly lose work it may be that you are pitching to the wrong type of customer for you.

Alternatively if you don’t understand the value of your product/service to your customer, you could be regularly underpricing. Take, for example, an instance which happened to me a couple of months ago. We had just had new carpeting through out the upstairs of our house. You know how it is, for a micro second everything looks great until… the cat gets trapped in one of the bedrooms and rips up the carpet in front of the door!

I phoned our lovely carpet guy who came along and patched in some of the offcut left over from the original fitting. He did such a good job that we cannot actually see where the join is. Obviously for me this job had a good deal of value because our carpet is pristine again. But he priced on a cost plus basis and so only charged me £15! He probably left over £80 on the table because the job was worth at least £100 to me.

Now cost plus as a starting point is not bad, because at least you ensure you get the minimum price you need to cover your costs – as long as you have a very good idea what those costs are. But relying on it alone will mean that you undercharge clients for whom the value you provide is more than the costs of providing it (plus profit).

For effective pricing you need to do your homework. You need to understand the market you are in; who your ideal customers are and what they value; and you need to have a very clear idea of what you need to achieve to make a profit.

Fiona 🙂

Wow – what a spectacle!


As Chad Le Clos’s father Bert would say it was ‘unbelievable’.

The Rio Olympics was fabulous for Team GB and nearly everyone I have spoken to has been glued to the TV watching their exploits. Of course there were the events we expect to do well in – the track cycling and rowing – and indeed our athletes delivered here.

But there were also the events we did well in that we would never have expected to. The men’s gymnastics was incredible, our hockey girls also won gold for the first time. Then there was the trampolinist who just couldn’t believe her silver medal performance.

Of course there were disappointments – I think we won the prize for the most 4th placed athletes – but overall the consensus seems to be that the team delivered much more than was expected.

Whatever the result there were some key themes which came out of the interviews with both winners and losers: the hard work that goes into preparing for an Olympic Games; the role of the ‘backroom’ team in coaching, supporting and facilitating competitors; and the sacrifices family often have to make.

In short enabling even individual competitors to compete at an Olympics is a team effort.

In business too any successful business owner will have a team around them supporting their decisions and lending the expertise the business owner themselves does not have. There is obviously the support from within the business from key staff. It is vital that everyone in a business contributes to the business success and that the right people are in the right roles.

As well as great staff successful business people cultivate a team of professionals, suppliers, regular customers and introducers around their company.
This support network helps the business to thrive even when conditions are challenging. Just because you are the MD does not mean that you have to know everything about all aspects of business – as long as you have a team around you who can fill in the gaps and help you make the right decisions for your business.

Fiona 🙂