#2

Define your products/services

How to select your offerings, determine their pricing, and articulate it in a way that others can understand.

Date Written:

April 30, 2024

DISCLAIMER: The views expressed herein are based on personal experience and observation. It is advisable to conduct your own due diligence before making decisions for yourself and your business as every individuals circumstance are different.

Choose What You Love

To persevere through the inevitable challenges, you need to love what you do! Choose something that makes you think, "There's nothing else I’d rather do." Financially, if you’re able to provide value to your clients and there’s a market for your services, you should be successful.

 

What Do I Need to Outline?

1. What kind of business do you want to run?

For example: “I’ll complete electrical work for homeowners.”

2. What are your expenses?

Let’s say the cost for a kitchen hob is $1,000, plus four hours of labor, use of vehicles, and tools. 

How much are you going to charge your client?

Break it down like this:

  • $1,000 for the kitchen hob
  • 2 hours of travel + 2 hours of installation at $65/hour
  • Add a 20% margin
  • Add 15% GST
  • Total: $1,738.80 (including GST).

 

3. How long will the job take?

For this example, about half a day, with a 2-week lead time for the hob.

Yes, quoting will be a regular part of your work, so you need a system for pricing materials, setting hourly rates, applying builder's margins, and accounting for contingency costs. I also don’t recommend relying on "charge-up" work — it’s risky when clients run out of money and leave you out of pocket.

 

A Thought Exercise to Help You

Imagine a prospective client asks you these questions:

 

Client: What do you do?

Keep it simple. For example:

  • “I build pergolas.”
  • “I do backyard renovations.”
  • “I install concrete driveways.”

 

Client: How long have you been doing that?

Be honest, but don’t undersell yourself! You might not be the most experienced, and that’s okay. Clients value integrity and work ethic, so if your price is reasonable, they’re often willing to give you a chance. For example:

  • “I have my LBP and have completed a few new builds.”
  • “I’ve been on the tools for 15 years, specialising in commercial builds.”

 

Client: How much would that cost me?

You’ll need to quote, but it’s important to have a ballpark figure in your head to ensure you’re making a profit. For example:

  • “Typically, a pergola of that size would cost about $3,000. I’ll quote it and send it through.”

 

Client: Do you require a deposit? If so, how much?

At this stage in your career, the answer is usually yes. A deposit helps cover material costs and reduces the risk of non-payment. Don’t worry — this won’t scare off clients if you explain that the deposit is for materials. Most clients are happy to pay when they know it's going towards the project, not a new boat!

I recommend a 0-50% deposit and progress payments, depending on the job size. (I’ll cover cost-thresholds, QS, P&Gs, margins, and quoting in another post.)

For example:

  • “I require a 25% deposit to cover material costs and secure your booking.”

 

Client: How long will it take for you to do the job?

Always have a work schedule that outlines lead times and work stages. Stick to it as closely as possible! No one wants to hear, “Sorry mate, I’ve been super busy, but I’ll get to it next week hopefully…” That’s a quick way to lose clients and get a reputation for making false promises. Instead, be honest and realistic — clients appreciate knowing what to expect so they can plan accordingly. For example:

  • “I can have the team there next week, and it will take about five days. I’ll send a work schedule tomorrow to confirm the timeline.”

When you’re starting out, it’s crucial to be clear about the value you provide, what your expenses are, how much you’re charging the client, and the timeline. You don’t need all the details nailed down right away, but you should have a solid estimate.

 

Once you've outlined your products and services, you’re ready to move on to the next step.

Try again.