How does one bill for your experience

3D fabricated sign by SignForce

Selling ‘products’ is a relatively simple business model. One simply has to purchase your ‘product’ at the best price possible, calculate the cost of your fixed and variable costs to ensure you sell a sufficient quantity of your product and add on a markup – traditionally 100% – so yo can make a PROFIT on your sale.

The same basic process is required when selling a ‘SERVICE’, except that when selling a service the COST of the service can be a lot more complicated to value.

Lets look at two simple examples.

Example 1 – selling a product.

Cost to buy product – 100 (this value is obtained from supplier’s invoice)

Markup (100%) – 100

Selling price – 200

Example 2 – selling a service.

Input cost of service – 100 (**)

Markup (100%) – 100 (except more often than not prospects and clients will go mad when they believe the supplier is intending to make a profit)

Selling price – 200

(**) The input cost (equivalent to cost to buy product when selling products) is more difficult to calculate as it must cover all expenses including the time, cost and effort from attending the University of Live, as well as all other input costs – include the cost of training, experience, cost of any equipment used to provide service and insurance to name but a few of the input costs.

As the person responsible for keeping our small business alive and afloat, the task of costing can often be daunting and overwhelming, because among the many balls being juggled are (a) ensuring the continuity and sustainability of the business so the team keep their respective roofs over their families heads and food on the family tables, (b) keeping the cost low enough for the prospective client to find it attractive – especially in a difficult economic climate where it almost always seems prospects are more interested in cost than quality – and (c) making sure ALL input costs (including but not limited to those listed above) are accounted for – and with some prospects also ensuring there is sufficient wiggle room to give a discount they are compelled to negotiate.

With all these factors to take into consideration, how does one explain to the price over sensitive prospect that your offer, while possibly requiring a higher up front investment – would be in their best interests in the long term. And always keeping in mind that we don’t know what we don’t know – and this includes who we are competing against, which can influence no less than product, price and relationship.

At SignForce we tend to give the advise for free. It may be built into our costing but if so this is not intentional, because we are all about educating our clients and prospects so that they get the best signage to suite their stated objectives.

If you are in the market for signage, calling SignForce may be your best move yet.

Contact SignForce now on info@signforce.co.za or call +27 (0)11 440 7525 or WhatsApp +27 (0)82 558 6413

Find out more about SignForce at http://www.signforce.co.za