Pricing for Growth

When you're first starting out as a consultant, your two main priorities are to grow your client base and to gain experience. Even if you've been using QuickBooks for years as I did, you'll find that every client has different needs and it's a huge learning curve. So I recommend keeping prices low to start. A good starting point is to price yourself as a very good bookkeeper. That's about $30-$45 per hour in my small town (population less than 100,000). If you're in a bigger city, go for $40-$50 per hour. In any case, you want your pricing to come in under your competitors'. I also made a point of telling prospective clients that if I didn't know an answer, I would research it for them and not charge them for my time. Clients like that because they get the answer they need at no charge, and you get the learning experience you need.
If your business is already up and running, and you're ready to expand your client base, you can offer money-back incentives for referrals or discounted package deals as a way to lower your prices indirectly and grow your client base.

Pricing as a Tool

Somebody out there is worried about pricing. We're all worried about pricing. When I started my business, I asked business advisors, read magazine articles, and did research online. The most common advice was to "price competitively". Well, that wasn't very helpful to me. And so this is the first part in a four part series on my experience on setting prices. The main goal of this first blog is to make you think differently about pricing. Short-term vision makes you want to price to make enough money to live on. Don't go there. Think of pricing as a tool to move your business in the direction you want it to go. In my opinion (so far), there are three pricing stages that take effect and not necessarily sequentially:
1. Pricing for Growth
2. Pricing for Stability
3. Pricing for Optimization
I will describe these different pricing strategies in future blogs (coming during the next month - stay tuned...). For now, consider pricing as a tool that fluctuates (up AND down) as your business needs change. Back soon with more.