Question, How did you guys go about about establishing your price structure? Not looking for people to tell me what they charge as I don't want people to think I'm trying to use this to undercut anybody. Is there a formula you guys use? I just want to offer a fair(reasonable) price without being overpriced and not devaluing my service or time.

Easiest way is to just call around to the competition and see what they are charging. I find out about raccoon pricing and then base everything off that. I charge the same for everything except skunk, beaver, and K9. Those three are more money. Some things are harder to charge per animal on (muskrats, voles, moles, etc.) and I prefer to give the customer the option to choose per animal or per week. They always choose per animal and regret it in the end.

Nate:
That has to be the worst single paragraph of advice I ever read on this site, Maybe your competition has done the same,and so on, and so on,and so on...You justify your price buy you expenses estimated, projected labor and percentage of expected profit, If you assume the guy you price check has done those calculations, you may just assume wrong...Lots of info on pricing on this site, just search it and create your own cost ratio and what your OK with in profit, I will tell you, that it is standard practice in this business to call and price check, BUT...you do not base your prices off of that...Its always good to know what the other guy is charging, but he may not have the same overhead costs as you...Not trying to be nasty Nate, Just being realistic..

He is looking for a "STARTING POINT" on pricing. How are you going to know where to start without calling around? If you have no idea where to start your pricing at calling your competition is the best place to start.

I know when I started I called around and then charged $50 less than the competition and within a month I raised my prices to match and now I am the second most expensive in the area. And by June I will be the most expensive and not by a small margine.

I doubt you or anyone else knew what their projected labor, number of trips, and definately not profit margin when they first started pricing. These are things that you learn as you go.

I would bet that I am not the only one who thinks calling the competition is a pretty good starting point.

Red, I can see what your saying and of course many of us have seen lengthy lengthy threads on this pricing topic. While we all including Nate know that
you have to know what it costs you to do the work, honestly you do need to know what the other folks charge and if you are a simple sole operator checking your competitors isn't a bad way to think about pricing especially if you are just starting out.

Maybe it would be better to suggest you need to ask some questions to qualify those competitors pricing structure.

If you don't call your competitors (I didn't) you constantly wonder what they are charging when you first startup and whether it is why you win or lose
people, are you too cheap, too expensive etc...

Even though what Nate suggested isn't the in depth approach so many threads take us down about finding out what costs are and building a price from there, many folks don't know what these cursory costs are when starting and so they don't really have a good idea where they are (which can lead to trouble in staying in business once launched).

I've learned my competitors pricing from clients who told me when I was there just in general conversation and in getting to know a couple of pest outfits that recommend me for wildlife. Species we overlap on I know what they charge and recommend them when applicable to keep the wheels turning.

Anway, yes Snoe you should know what it costs to feed yourself, keep your wheels on your vehicle moving and serviced, pay for insurance, etc.... But in the end you only plan from a guess at how many calls you will have and how many hours you will work and have to adjust occasionally.

Just remember you can't plan that you will be busy 40 hours a week with each hour paid for, you have to estimate how much you'll work in a year and divide what you need to live, pay bills, etc...grow your business by that hour amount you expect to get paid for.

My wife and I were lucky to have several folks lend us good advice up front, but I don't think it would have hurt to call around just to get started.

P.S. Red, I know you weren't trying to be nasty but I have to state clearly I have seen far far worse advice given on this forum, I think we can all agree this isn't even close.

Call around for an idea. Then think of the pros cons to the different structures. Undercutting doesn't work very well.

You are not!

sorry to disagree... I have been at it a day or two and think that if you run your business on what other people charge, and have no rhyme or reason to justify the cost, then you wont be in business long... The guy down the street can do it cheaper than me..he doesn't pay workman's comp, commercial truck insurance, income tax....the list goes on and on... These costs, determine your pricing... No one said anything about under cutting...I'm 65.00 higher for a inspection than anyone around...why?? because the math says so...

Red,

Disagreement and debate is healthy, I understand where you are coming from and the sleuth of others who have mentioned
the same.

Starting out though many folks aren't anywhere near where they need to be (myself included) to actually know what all those
costs will be as Nate mentioned. At least knowing what the pool is around you gives a basic starter something to see if they
are able to use. They might realize immediately they aren't able to go so cheap, or maybe their skill set doesn't warrant the
extra money above their competitor, or a variety of other factors.

I think everyone does it different and I probably have monthly discussions in my own home about this very issue and making
sure we aren't underpricing ourselves even if we are meeting all of our needs financially.

Again, good discussion and discourse doesn't hurt.

I have to disagree with Red.....

If you open your doors tomorrow and have no idea what the area market can handle and base your prices on what you want to make you are going to be out of business before you start. Either,

1. You will under charge and will go broke in a month.
2. You will over charge and your phone isn't going to ring. Don't tell me about how your work or customer service justifies the the price (you are just starting out, you have no work history).

If you just "happen" to come within range of everyone else then you got lucky.

If everyone in his area is charging $130-150 for an inspection and he come out and start charging $250 he is not getting much work and that is a fact. Once your established you can charge as much as you want and survive.

I have seen people come and go, I worked with a guy that left me and opened his own business, he used my pricing structure and sales system, had no idea why the math was the way it was, just that the other company charged that. He is now out of business. he did not know what the running costs were for ads, he didn't know that his workman's comp was charging more, his insurance was way more expensive than mine was, his monthly internet ads were twice what mine was, but he got his pricing structure from me...He worked for me, so it had to work for him, Wrong...Now he is in the unemployment line waiting on a check, because he didn't understand costs of doing business. Price checking is OK to do, but never base your business off what someone else is charging...I understand that you don't want to under price yourself, But if you do not understand your operating cost, how do you know you are? All I'm saying is that was bad advice Nate gave "Easiest way is to just call around to the competition and see what they are charging"...Easiest or Laziest?? Be a good business person and run it on numbers, not what Joe down the street is doing..I'm beginning to repeat myself so Ill stop...

Pick up the phone and call three or four other companies in the area and find out what they charge to give you a base for your price. If you are just starting out your costs are going to be a fraction of what they will be once you expand so why should you charge less just because you have less cost than what you would if you had more costs?

If I need to make $10,000 a month to run a profitable business why would I charge less to my customers than my competition just because they have more overhead? I will charge the same amount if I need $10,000 or if I needed $15,000 a month if it is in a comparable range as the competition.

I know I charge about $50 more for squirrels than everyone else in my area and I charge $75 more for skunks than they do. We all charge the same for beaver and K-9s. My prices are in the same range as everyone else and I am still profitable so I guess it can't all be bad.

Nate: I wouldn't expect you to agree with me, You haven't been in business long enough...Time makes you smarter..

Your costs are less...once you expand.

But do not get me wrong...growing is expensive.

much less......

Red is right. Eventually you gotta explain why the bottom line is what it is. How is that gonna fly when you tell them you just called a bunch of places and rounded up? You will get some work, but knowing what you are talking about will get people talking about you in a good way. They will also call you again when they have other issues. Customers who trust you generally call you back, and the way to get to that point is to explain what you do, why you do it, and why it costs what it does.

I know all three of these guys and I truly like them all. I can't wait to see who wins!

Paul, Did you get that bat off the Basket Ball Court?

Hey red, I just realized we spoke at WCT.