I know we've had many a discussion of fixed prices and hourly rates, and I'm an hourly rate type of person. Ive been completing my spreadsheet to get my own SA return sorted ( I know I'm eager) and I'm surprised to find that the original price I wanted to quote my customer would've left me with a £300 loss if I'd charged fixed rates.
I started off doing 1 business, then his other business and what with all the hassle of transferring monies from one bank to the other, vat payments on one and refunds on the other, it has took hell of a lot of my time. I have to reconcile not only 2 banks but also the intercompany loan account for the transfers between companies.
Now I've added it all up I may offer a fixed fee of £200 / month as both companies are running smoothly, all bank recs up-to-date etc.
I find working out a pricing structure harder than doing the actual work, and it comes in at a very close second to getting the client, in the first place
I think when fixing a fee, the client must be told that if the workload increases then clearly the fee will need to be looked at. Maybe we should call it a semi-fixed fee. I had a job last month where the client absolutely got my price down to the lowest it could go (£50 per month) and I only agreed because I knew I would make at the year end, but his books were a mess and he had several bank accounts he was working from and Paypal and in the end it took far too long. I billed him £75 per month for the quarter and just told him I would be out of business otherwise and that I should really have charged £100 per month. He was happy because he realises he is getting value and though I'm not making much on it he has just told me he wants to set up a separate business so I will make a bit more afterall.
But it is tough setting a price. How often do you geta telephone call and without even seeing any paperwork they want a price! I normally say it will be somewhere between £50 and £500 per month, but by the sounds of it your biusiness will be closer to the lower end...once they know it's not going to be £500 they seem to be happy to go with £75/£100!
I find working out a pricing structure harder than doing the actual work, and it comes in at a very close second to getting the client, in the first place
Bill
So true, it is hard to choose the correct price, I normally price on what the client has told me, it is sometimes a bit of a guessimate, but then if you have made a mistake pricing then you could tell the client that you will need to adjust the fee.
My lowest client is £50, for 2.5 hours each month, so not bad, he knocked me down from £100, but then I said I couldn't go any lower. Sometimes I think clients don't realise how much work there is involved.
