Tradies AccountantsTradies Bookkeepers

As a tradie, when do you know how to price your services? Do you think you’ve nailed your trade business’ pricing structure?

To determine this, make sure you understand what hour rate you need to charge to break even and then make a profit. Here are some things to consider when working out the pricing structure for your trade business.

Tradies pricing structure

First, find out which of your services are profitable and analyse what’s working in the trade business so you can further develop that style of work. For example, plumbers often find that their most lucrative work are blocked drains and hot water units, so they establish a decent profit margin for these services.

Next, you need to review your financial data and know the insightful and important information that can help with your decisions in relation to finding out which jobs should have a high profit margin.

Check your pricing structure per market segment and have different pricing scales for different market segments. For example, your residential customers are in the first level, followed by commercial and real estate agents. You’ll know which market segment is best for you by using a job management software. Armed with facts, you’ll be able to see jobs with higher average dollar sale.

To break this down even further, you can look into your pricing structure per customer or company within those market segments. Your price could be tweaked for these businesses based on average dollar sales. You can run a report that provides all jobs completed by an agent and see the average dollar sale to find out if you can give a discount or increase your pricing. If the ave. dollar rate is below the rate you need to profit, you need to fix it.

Check your competitors’ pricing. How does your compare? While trade services are not equal, it’s still good to understand what’s being charged in the market. Do a competitor analysis to see if your pricing is affordable or expensive and see if you can ask your customers what they think. You can adjust your pricing but remember that customer retention provides about three time the average dollar sale once customers become loyal.

Tradies AccountantsTradies Bookkeepers

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As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

Ballarat Accountants

Phone: 1300 328 855

Office Address: 902 Howitt Street, Wendouree, VIC 3355, Australia

Postal Address: PO Box 2234, Bakery Hill, Victoria 3354

Gisborne Accountants | Macedon Ranges Accountants

Phone: 03 97444522

Office Address: 45 Hamilton Street, Gisborne, VIC 3437, Australia

Postal Address: PO Box 270 Gisborne Victoria 3437