Value Pricing

“Value”: noun
the regard that something is held to deserve; the importance, worth, or usefulness of something.

Your time is valuable
Your experience, is valuable
Your ability to deliver quality is valuable.
Your guarantee of quality and satisfaction is valuable.
Your ability to cope with changes and issues that come up during the job, is valuable.
Your ability to complete the job, on time, on budget is valuable.
Your ability to deliver, what the customer wants/needs is valuable.

This post is making the rounds on Facebook and I found it on a Mark Wickersham fb page. 

A CONVERSATION ABOUT PERCEIVED VALUE:
A customer asked a contractor friend of mine how much it would cost to do this project.
My friend gave him a proposal: £4500
The customer responded: That’s seems really high.
My friend asked: What do you think is a reasonable price for this job?
The customer answered: £2500 maximum
My friend responded: Ok, then I invite you to do it yourself.
The customer answered: I don’t know how to.
My friend responded: Alright, then how about for £2500 I’ll teach you how to. So besides saving you £2000, you’ll learn valuable skills that will benefit you in the future.
The customer answered: Sounds good! Let’s do it!
My friend responded: Great! To get started, you are going to need some tools. You will need a chop saw, table saw, cordless drill, bit set, router, skill saw, jig saw, tool belt, belt sander, shovel, pick axe, hammer, long level or laser level, etc.

The customer answered: But I don’t have any of those tools and I can’t justify buying all of these for one job.
My friend responded: Ok. Well then for an additional £300 I can rent my tools to you to use for this project.
The customer answered: Okay. That’s fair.
My friend responded: Great! We will start the project on Monday.
The customer answered: I work Monday through Friday. I’m only available on the weekends.
My friend responded: If you want to learn from me then you will need to work when I work. This project will take 3 days so you will need to take 3 days off work.
The customer answered: That means I’m going to have to sacrifice my pay for 3 days or use my vacation time!
My friend responded: That’s true. Remember, when you do a job yourself you need to account for unproductive factors. (Hidden Costs)
The customer answered: What do you mean by that?
My friend responded: Doing a job completely from start to finish includes time spent to plan the project, pick up materials, travel time, petrol, set up time, clean up, and waste disposal, time not spent working for other customers, amongst other things. That’s all in addition to the actual project itself. And speaking of materials, that’s where we will start on Monday so I need you to meet me at the lumberyard at 6:00am.
The customer answered: At 6am?!! My work day doesn’t usually start until 8am!

My friend responded: Well then you’re in luck! My plan is to start on the deck build by 8am. But to do so we have to start at 6am to get materials picked up, loaded and delivered to your job site.
The customer answered: You know, I’m realizing that a lot more goes in to a job than what a customer sees in the finished project. Your proposal of £4500 is very reasonable. I would like you to handle the project.

CONCLUSION:
When you pay for a job, especially a custom job, (whether it’s a physical project or digital project) you pay not only for the material and the work to be completed. You also pay for:

• Knowledge 
• Experience  
• Custom Skills   
• Qualifications  
• Tools & Equipment    
• Software, licenses etc. 
• Computers  
• Time to plan  
• Time to prepare  
• Professionalism  
• Work Ethic  
• Excellence    
• Discipline  
• Commitment  
• Integrity  
• Taxes  
• Use of Trade Accounts  
• Licenses  
• Liabilities & Overheads 
• Insurance  

If you request a proposal for work to be done, please don’t disrespect a service provider by trying to get them to lower their prices.

If their proposal exceeds your budget, there’s nothing wrong with getting other proposals.
Just remember.. you get what you pay for.

SERVICE PROVIDERS: Know your worth and be confident in it.

CONSUMERS: Recognize their worth and be respectful of it.

Sharing this to support all our clients, their families,  Entrepreneurs, Business Owners and Tradesman.

And thank you to fb for putting up something to make us remember our responsibilities as business owners, to deliver value, and support each other.