When you follow the going rate, you let the competition run your business.
Periodically, I make the plea to service business owners to re-examine their prices, and, frankly, suggest
they raise them. It's one of the toughest battles I have. Even though a thorough analysis of costs will usually
convince a business owner to rethink the company's pricing, often an owner will resist. I have gone through
the numbers (and I'll do it again), and many owners still are reluctant to let their pricing structure match
their costs and the margin required for maintaining a profitable business.
I am aware of some of the reasons, but none are compelling enough in my mind to overlook the reality that
a business must be able to generate a reasonable profit to continue to provide top quality service. I have
heard about loyal customers, cutthroat competition, home warehouse stores in the neighborhood and all
the other worries that service business owners face these days. However, there are successful businesses -
including the most successful ones - that have maintained their margins year after year without losing
business. In fact, quite the contrary, these companies have increased their business and kept their
reputation for quality work.