Asking for a raise is one of the most stressful things to do as an employee. It’s one of those few times where you realize just how much power your employer has over your life. It’s times like these that make working for yourself sound so appealing. “Be your own boss!” everyone says. “Make your own schedule! Pay yourself what you want!” Those affirmations all sound well and good, but there is a phenomenon that happens to too many business owners once they are in that position they long sought to achieve: They find themselves just as powerless as when they were employees, they just don’t realize it. Their one full-time boss was just replaced by hundreds of very short-time bosses, some nice, some not so nice. Their nice and tidy “9 to 5” schedule was replaced with a hodge-podge of running all over town, doing a job, running an errand, doing a job, cleaning the truck, etc. However, despite all the extra work and hassle, most window cleaners would tell you that they wouldn’t have it any other way. Except…
The unspoken fact about owning your own business is that pricing is the most fluid and unregulated part of our industry, especially when you are a single owner/operator. You can have one job that makes you $100/hr and then walk across the street and only make $40/hr. Sometimes it’s because you’ve had a client for years and have never raised their price. Sometimes you have an inefficient or inconsistent bidding process that has your prices landing all over the place. Whatever the reason, a number gets put down in writing and then that is the price. THE PRICE.
It doesn’t have to be that way. You are your own boss, after all. You can literally raise any of your prices any time you want. The problem is that most small business owners have hang-ups when it comes to raising their prices. This subject is going to be considered in two articles. In this issue, we are going to address the fears that business owners fall prey to and in next we will talk about the right and wrong ways to go about raising your prices.
Fear #1: My customers would go find another window cleaner if I raised my prices
When you are starting out and just have a few clients, this can absolutely be a concern. One lost customer could be a significant decline in your yearly income. It’s probably not wise to “rock the boat” by putting questions of affordability into your customer’s mind. Additionally, to get their business to begin with, you may have underpriced your service as an incentive. This makes total sense and can be an effective start-up strategy. What does NOT make sense is keeping that same price for the next 10 years. (You know who you are!)
Truth: Your customers live in the real world. They understand that prices go up over time. Might you lose customers to an increase? Sure, it’s possible. However, if you have has a customer for 5 years and they drop you because of a $20 raise, is that really your customer. Also, remember that just because your prices don’t go up doesn’t mean that your expenses aren’t going to increase every year. By not raising your prices you are, in effect, lowering your own pay. Is that something that should happen to a person who is their own boss?
Solution: Here is the question you need to ask yourself: Are you delivering your best service to your customers? If you give great customer service and quality work, those losses will be few and far between. No one wants to start over with a window cleaner if they already like and trust you. Work to see your customers as more than a source of income and develop a respectful rapport with them. When they see that you care and that they are more than just income to you, you will have a customer for life.
Fear #2: Raising my prices too far above the average market price in my area is unethical
When I talk to people about how much I charge my customers, I often hear this argument. The idea is that if we charge more than what the service is worth in our area, then we are stealing from our clients.
Truth: Please tell me who set the average price? Do you have actual data to back up that price or is that number just what you “feel” is the average price for your area? So many people are adamant about no going beyond a certain price point, yet rarely do they have any information confirming that the average in their minds is actually accurate. That number also doesn’t make allowance for the variations in tech experience, business stability & longevity, hundreds of Google and other online reviews, etc.
Solution: You are going to have to come to terms with the fact that your experience and customer service are commodities that add value to your business. You should be charging for them. You really think a window cleaner who is 2 years into his business & has no online presence should be getting paid the same rate as a 15-year veteran window cleaner with 300 Google reviews? That would be like renting out a Bugatti but charging the same price as Nissan Sentra. Stop devaluing yourself. You are a Bugatti, act like it.
Fear #3: I like the security of knowing I’m always booked out a month. Raising prices may disrupt that.
It is a very human thing to want security among all the uncertainty involved with running your own business. Especially if it took you a long time to find business stability, it may be important to know you are booked out far and that you will have work when you need it.
Truth: I always cringe a bit when I hear an owner brag about being booked out so far. What that often means is that their prices are too low. Might raising prices mean you will lose some customers? Possibly, depending on the size of the increase. However, if you are making more money per job, it is very likely that you can make the same amount of money as before yet work much less! Not only that but being booked out that far means getting sick or having a family emergency can really mess up your schedule and add stress to an already stressful situation. It also leaves very little room for new customers to find you. Who wants to wait a month for a window cleaner that that don’t really know much about? Not many.
Solution: Embrace uncertainty and have confidence in your abilities. Some of the best paying customers I have now were put in the spaces of customers I lost. Understand that not all work is the same and not every customer is your customer. There is a saying, “Don’t jump over dollars to chase pennies.” If your schedule is too packed with penny chasers, you might never realize that the dollars were right below you the whole time. Do good work, treat your customers right, and you will have nothing to fear from being booked out 2 weeks instead of a month.
I know, I know. It’s easier said than done and there are no guarantees in life. Growth is always uncomfortable. However, there are things you can do to keep most of your clients from bailing while still making more profit for your business. We will talk about those tips in the next issue.
-By Gabriel Gutierrez