If you are unsure if your pricing is making you profit and fully covering your costs, this simple pricing template may help you. I have specifically designed it for use in those businesses where labour is the main resource which drives the costs of the contract.This is prevalent in the creative industries where you would be informed of a budget price to work to.
It is important to know whether agreeing to do the job at a specified price is really going to add profit to your business. The spreadsheet provides a template to work with, which you can add your business specific staff and types of overheads.I have incorporated the logic of ensuring that your overheads are charged to each job, based on the number of direct labour hours which will be required to complete the job.
This template is designed to give an indicative price of what should be offered or agreed with your customer to ensure that the job is competitive, realistic and profitable to you. The Profit margin, calulated as proft as a % of sales should be reviewed to ensure that this margin is acceptable to you. If you do decide to price differently to the target or budget price this margin figure will of course change and it is for you to decide if this margin is acceptable to you.
So if you are pricing based on ‘the back of a fag packet’ or on ‘what feels right’ this should provide a good check to ensure you are on track to make a profit.
If you require specific help in designing a pricing model which is specific to your business please contact me now for a chat either via this website or via my mobile.