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hey Mike Callahan want to make a quick
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video here just got out of a first day
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of a two-day deep dive where we go in
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and literally reinvent and restructure a
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company’s pricing particularly their
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pricing matrix but one of the biggest
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questions around going in and rebuilding
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your pricing structure or pricing
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matrices in your service business is how
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does that affect your current client
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base well it doesn’t so the first step
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is we want to go in and build a pricing
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matrices based on production so there’s
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three ways of estimating that we find
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the first is when we all start on a
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business we traditionally go up to a
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property and say based on my market this
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is what the market would charge this is
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what I’m going to charge obviously not
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probably the right way of going at it
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the next is a production rate based
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estimating system based on square
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footage number of units small meter
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large or linear feet and then that’s
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gonna go out and calculate a price
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budget a timing cost before profit and
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those are distinctively the two main
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ways we desta mate but the other way is
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what if we don’t have a production rate
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already that we’re comfortable with we
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don’t have an industry standard we can
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use well we can base it on how many
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minutes or hours the estimator thinks
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it’s gonna take
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they plug that into a thing we call the
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on-site estimate form when you pull up
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the estimate in the software it
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calculates a price budget time and cost
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based on the estimators experience and
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then once we have enough data in the
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software we can run a production
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analysis so without emotion we can find
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out how long it takes to service that
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square footage area on average with your
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guys and girls in the field so the
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pricing matrix is going to be going in
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and updating from today moving forward
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it doesn’t go back historically so what
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we need to do for our historical clients
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is go in and create a job costing report
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and that job cost report if you’ve got
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good data in your software is gonna go
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out and pull out your start time your
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stop time hopefully some drive time
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associated with each job and how long it
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took for you to do those jobs and then
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you could say if I want fifty five
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dollars per man-hour per person on the
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crew I’d plug that in and when you drag
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some formulas down it’s going to give
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you property specific pricing whether
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you keep the price the same or have to
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raise it so two distinct
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season I recommend in your service
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business is creating production rate
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based estimating system in updating the
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matrices that’s moving forward and
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that’s what we’re doing an in the deep
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dive in addition to the deep dive we’re
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gonna go in and create a job cost report
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where we take all the information
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historically for start and stop times
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per service and update anybody’s service
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that’s not hitting our financial
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threshold so most people in the service
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industry post on Facebook say hey I’m
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raising my price is $2.00 a cut or 3%
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across the board and home cleaning in my
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opinion that’s the worst thing you can
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do we wanted to create a report and Nan
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emotionally raise the prices on the jobs
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that are not hitting our economic or
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dollar threshold per man-hour so want to
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put some clarification around what that
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looks like when you come to a deep dive
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or you’re doing it yourself
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pricing matrix updates are moving
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forward only in the future to go
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backwards we need to do job costing
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reports and update those services on
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anybody not hitting our financial
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threshold and it’s a non-emotional way
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to raise the losers and keep the winners
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there and never raise their price if
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they’re meeting our goal because they
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are the most profitable clients and we
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don’t want them to go out and shop our
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services so comments or questions drop
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them below callaghan’s corner you ask
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the questions we answer them live right
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here on Facebook