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Re: Establishing Price
[Re: Mike Flick]
#3601779
01/30/13 06:30 PM
01/30/13 06:30 PM
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Joined: Nov 2008
Waterford, WI
Nathan Krause
trapper
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trapper
Joined: Nov 2008
Waterford, WI
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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? Why would I explain to a customer how I come up with my pricing? Do you ask McDonalds why your fish fillet cost $3? A great example of this was yesterday, I was calling around getting prices for a new sign at the store and one place I called was a lot more than everyone else (by about $300) and he was the only one who felt a need to explain why he charges what he does. Imagine my surprise when he said he was going to do exactly what the other three companies were gonna do. Now granted I have not been in business as long as some of you guys, but neither am I some new guy who just oopened up shop. Maybe I am lucky but never has a customer asked me to explain why I charge what I do. Nor have I ever offered my pricing structure to a customer. Different strokes for different folks I guess. But here it is plain and simple......... You need to know what your area can afford and the best way to find out is to call the competition. I really think this is more about people being mad because other companies started up and called them for pricing and then started charging less. At no point would I suggest doing that. You but you are not going to make it if you are charging $600 for a raccoon and everyone else is charging $150.
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Re: Establishing Price
[Re: ]
#3601781
01/30/13 06:33 PM
01/30/13 06:33 PM
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Joined: Nov 2008
Waterford, WI
Nathan Krause
trapper
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trapper
Joined: Nov 2008
Waterford, WI
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Your costs are less...once you expand. Then I got something wrong because it sure seems to cost a lot more now that I am paying for employees, multiple vehicles, buying more equipment and supplies. I know my fuel bill has gone up greatly now that more trucks are on the road, and paying for more phone bills and the list goes on and on.
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Re: Establishing Price
[Re: Snoe]
#3601786
01/30/13 06:35 PM
01/30/13 06:35 PM
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DaveK
Unregistered
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DaveK
Unregistered
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You must not have the sales to support your structure. Got to watch the margins as you grow...they should improve.
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Re: Establishing Price
[Re: Snoe]
#3601815
01/30/13 06:47 PM
01/30/13 06:47 PM
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DaveK
Unregistered
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DaveK
Unregistered
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Your marketing cost should go down with all that recognition and customer referrals. You can save fuel by routing trucks efficiently. Insurance is less expensive. You can get better pricing buying bulk. This is just off the top of my head....
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Re: Establishing Price
[Re: Nathan Krause]
#3601816
01/30/13 06:47 PM
01/30/13 06:47 PM
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Joined: Oct 2007
Chocowinity, NC
Phil Nichols
trapper
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trapper
Joined: Oct 2007
Chocowinity, NC
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The rote formula to be in a service business is the 1/3rd rule. One third cost to do the job, one third cost of overhead, and one third profit to the business.
Last edited by Phil Nichols; 01/30/13 06:47 PM.
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Re: Establishing Price
[Re: ]
#3601860
01/30/13 07:02 PM
01/30/13 07:02 PM
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Joined: Nov 2008
Waterford, WI
Nathan Krause
trapper
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trapper
Joined: Nov 2008
Waterford, WI
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Your marketing cost should go down with all that recognition and customer referrals. You can save fuel by routing trucks efficiently. Insurance is less expensive. You can get better pricing buying bulk. This is just off the top of my head.... Dave I am not following how four trucks on the road should be cheaper than one no matter how you route them. I know I paid about $900 bi weekly when it was just me and now I am well over $1800 with four trucks. Fuel prices are comparable. Liability Insurance for just me $500, with three employees $1400. Not cheaper. Auto is way more when you go from one vehicle (paid off) to four vehicles (two financed) but the drivers only brought it up $74 from when it was just me. And while prices are better for bulk buying it still costs more to buy 10 of something at 7% bulk discount vs. buying 3. I think what you are trying to say is that with more people your profit margins increase and I agree with you. What I am saying is my bottom dollar costs have skyrocketed since I hired. So when I look at my year end report and see what has come in and what has went out both are much higher today than when it was just me.
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Re: Establishing Price
[Re: Snoe]
#3602020
01/30/13 07:45 PM
01/30/13 07:45 PM
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DaveK
Unregistered
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DaveK
Unregistered
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Red...WCT was fantastic. I missed half of the presentations to network and meet people. That was the best $500 I spent in Jan. thanks for taking the time to talk for so long.
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Re: Establishing Price
[Re: Snoe]
#3602028
01/30/13 07:48 PM
01/30/13 07:48 PM
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DaveK
Unregistered
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DaveK
Unregistered
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You have to look at profit on an annual basis in this biz and maintain a healthy float. Stop thinking month to month!
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Re: Establishing Price
[Re: Mike Hurley]
#3602059
01/30/13 07:56 PM
01/30/13 07:56 PM
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Joined: Nov 2009
Luray,VA
Mike Hurley
trapper
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trapper
Joined: Nov 2009
Luray,VA
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DaveK: Its always good to talk to folks who want to learn, I have been in this industry since I was 19 years old, I have made my fair share of mistakes and think that I have solutions to help others, as I talked with you, I realized that I do have something to offer folks in this industry. I left the lime light for almost 8 years, burned out on industry know it alls and I enjoyed my time away. Now I'm older and calmer and think that I may be able to help someone like yourself be successful. I figured out a long time ago, I don't know half of what some of the guys like Winkleman knows, but if I can share what I do know, someone will benefit. Glad to see ya there, expand and go to all the seminars you can afford to go to, like you said, best money you can spend.
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Re: Establishing Price
[Re: Nathan Krause]
#3602966
01/30/13 11:45 PM
01/30/13 11:45 PM
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Joined: Apr 2012
1st civ. Div. Wood County Wi.
Mike Flick
trapper
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trapper
Joined: Apr 2012
1st civ. Div. Wood County Wi.
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My first five years I did real well just trapping animals. At $50.00 an animal I was making 500 bucks a day on average just in catch money. Here we go:
You have to know what the market can handle and the "BEST" way to accomplish this is to check with your competition. Once you know the "RANGE" that your specific area charges you can figure out your pricing that fits your business.
You gotta get a grasp for what a average job is going to consist of before you can figure out "YOUR SPECIFIC" price structure. When you start out you have no idea if a standard squirrel call will last one, two, or seven days. But after a few squirrel jobs you will know and price the job to make a profit. If the average squirrel job is three days you need to figure your time, expense, and company profit for three visits to this house. I personally do this by figuring out how much time I will spend on the job (hour inspection, 10 minute trap checks each day, hour sealing up hole) so on a three day squirrel job I am assuming I will be on location for 2 hours and 10 minutes. Next I figure out how much travel expenses I will incure ($0.50/mile to $0.75/mile) so if the job is ten miles away I figure I will have ($0.50 * 60 miles = $30 to $45) and then material costs and finally my company profit.
I have found this even more important on jobs that pay by the week.
Other jobs will be different. A woodchuck job won't require as much total time on location but could last much longer than 3 days. Only time will give you these answers.
Some guys charge by the job and this formula is very important if you go that route. Others charge a "set up" and "per animal" and this isn't as important but to charge this way you are going to need to sell add ons because there is no money in catching animals.
Then again this is just my opinion and I know some will agree and others will disagree but that is S.O.P. for this Industry.
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