The Math On Service Businesses

If you charge $200 a job and need $1000 a week to survive you’ll need 5 bookings a week. If your customers are likely to book you for the same service monthly you could say you just need 20 customers in total. If you need $2000 a week to survive that doesn’t necessarily mean you need double the amount of customers, i would say you need to double the amount you charge.

When starting out its easy to set a really low price for your service because you’re so desperate to make a sale. That and the fact you probably lack confidence. But starting your own business to end up working just as much, for the same amount you could make in traditional employment isn’t exactly the goal here.

If you’re working the same amount as you would in traditional employment you want to be making more. If you’re making the same amount as you would in traditional employment than you want to be working less. Otherwise you might as well stick with the job.

Service businesses end up coming down to how much you can charge for the job minus the cost of material.

A dog walker might charge an hourly rate while there cost of materials is virtually nothing. The cost of poo bags and some dog treats are minor compared to the yard maintenance business constantly needing fuel for mowers, chemicals for lawn care, not to mention the machinery itself and the type of vehicle needed to transport such machinery.

How much can you charge for the job? ($300) How much does it cost you in materials, tools and fuel to complete the job? ($100) The remaining $200 is your profit. So you need to book 10 jobs at $300 to survive each week.


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