Q & A Table of Contents
How Do I Set Prices?
From: Jennifer, Grand Blanc, Michigan
Question: I own my own landscaping business, the problem I have is that I don't know how to set a price for my customers. I am hoping that you can help. Can you?
Response: We can look at setting prices from two angles: one can focus on business benchmarks or it may be possible to look at a value-based approach. The wisest way to undertake your pricing is to consider both.
The business benchmarks need to reflect your costs and the amount of money you need to make as profit to justify staying in business. The other benchmark you can use is the price range of similar services supplied by competitors.
Looking at value relates to figuring out how your services add value to what you provide your customers. Are your services likely to feed their ego, increase their own business's image, cover up 'blemishes' on their properties, add to their prestige because they can say their garden was created/maintained by you, or offer some other benefits they can't get from
anyone else?
You should talk with your customers and find out why they are interested in hiring you. If they are strictly concerned about getting the work done for the lowest price, and if you have calculated costs and needed profit as well as 'what the market will bear' you should be able to offer a price that makes sense for you and the customer. If you have relationships with any customers where conversation about value is possible, that should give you the opportunity to ask questions that yield answers showing their feelings about the value received from your services.
One of the issues not addressed in your question is whether you simply provide maintenance services or if you undertake landscape design. The first type of business is more likely to yield a pricing structure based on the business model. Design work is less clearly a reflection of costs and more directly related to value.
Good luck figuring out how to price your work,
Steve
| 
