Pricing how to avoid the mistakes.

Pricing is a big issue right now for us and for many others. We just finished an in depth mid year review and have found that the overhead costs that have been sneaking up on us over the last year or so have really affected our bottom line. So like many others we are going to have to adjust our pricing upwards to keep things moving. No we are not in trouble or anything and in no danger of having to close like so many others including some of our customers this last year but we realized that in some cases we were giving away the farm and not leaving anything for the company. Every business needs to at least keep up with the cost of living and doing business and so far this year we have been going in the other direction. Very soon you will be seeing an across the board price increase. While we are cutting and trimming costs in areas that we can you should be pricing your products and services avoiding these mistakes to be sure you keep your business healthy too.

All pricing is, is risk. The risk of setting a price you and your customers can both live with and continue to do business. But most risk can be managed with good information.

1. Low ball pricing and undercutting your competition. For some businesses this is a strategy, but not a very good one for long. Pricing yourself and your services too low all the time may bring in great sales numbers but not the bottom line profit to stay in business. You do not have to get all of the price conscious customers there are out there. Know what your service costs you to offer it and price accordingly.

2. Using the same margin for everything. No one says you must make the same % of profit for everything you do. You may need to decrease the margin on less time consuming work, and increase the margin on the infrequent or costlier jobs. You can afford a smaller margin on the higher sales volume of the quicker jobs. Say a complete strip, stain and reseal job for a 3000 square foot deck at the back of the house vs. the quick concrete driveway cleaning at the front.

3. Knowing the difference between markup and margin. Markup is based on your costs and Margin is based on the price. If you price a service with a 20% mark up on the cost of the products you use for the job and then offer your customer even a 10% discount on the total service you may end up with not making the margin you need to run the business.

4. Not taking all costs into account. Every job priced must cover all your costs. Not just the cost of the soap, water and gas to get you there but also some of the cost to purchase equipment, operate and maintain it along with all your bookkeeping and other costs it takes to get and process the job. Every business needs to know its basic hourly overhead for a whole month even if you do not do a single bit of work for that month.

5. You need to know what the competition is charging for the same work. That does not mean you follow the price they charge but you need to find out what value they give vs. what you offer and price accordingly. If you use a better machine, better soap and give superior service include those costs in your price and be able to defend those prices by showing and explaining to the customer why you cost more.

6. Discounting instead of giving added value. Every 10% discount you give means you have to do 50% more work to make the same profit if you had not given the discount. You can discount yourself out of business. So make your discounts mean something when you give them, use them sparingly and try and give your customer added value instead. Give the customer an added service for free as an incentive instead of a discount. Clean the gutters with every roof cleaning, clean windows with a house wash etc. Most of the time you would be right there doing the first job anyway so the labor cost is very low, the material cost could also be next to nothing so why not put a price on the extra service and give that to the customer instead of a cash discount that mean cash not in your pocket.

I hope this helps you price your work to your customers to keep you running a healthy business and that you understand when we have to reprice our products to keep our business healthy too.

Summer is heating up is your business?

Already it is June, kids out of school and temps are rising and hopefully your jobs and profits with it.

We all know it was a very slow start to this year with the bad winter hanging on in the Northeast and the rains in the South and Midwest. But things are starting to slowly pick up.

I was hoping that I could get a discussion going on what each of you are seeing in your area, good and bad so you can see that there are others out there just like you.

For us at Soap Warehouse the economic, environmental regulation and weather issues that effect you directly effect us.

We also want to bring you information that will help you meet these challenges and hopefully aid you in over coming some of them. Here are some links to information that may help or at least inform you during these times.

For environmental regulation info go to http://www.washwater.org/ or http://www.epa.gov/

For business building join one or more networking groups. Here is an article about Kudzu:
http://www.entrepreneur.com/magazine/entrepreneur/2008/september/196302.html

Links to different sites are here:
Kudzu http://www.kudzu.com/
Merchant Circle http://www.merchantcircle.com/corporate/
Linkedin http://www.linkedin.com/


Is that Yellow page ad just not bring you in the business any more try other places:
http://www.entrepreneur.com/marketing/marketingcolumnistkimtgordon/article199484.html

I hope some so these ideas help you reve up your revenues this summer.

Lots of work in the Bahama's

As some of you may know Soap Warehouse sells products across the US but we also sell to customers in places like Costa Rica, Puerto Rico and the Bahamas. So far we only have a few customers in these places and we sell only a few things like airplane cleaner, house and car washes. So when I had the opportunity to travel to Treasure Cay, Green Turtle Cay and Marsh Harbor in the Bahamas last Thursday and Friday to visit some golf cart rental companies I went for it.

I was amazed at the opportunities that are there that no one has tapped into. So if you ever are considering a place to slow down and retire but still do some work once in a while these little islands are ready and waiting.

In the larger cities like Nassau things are about what they are here in the US just slower, but once you get over to some of the little islands, things are drastically different. These islands are too small for many cars, so they use golf carts! These islands thrive on tourism and they know one way to make a tourist pick them over the competition is appearance. For example: If you had the choice of renting a four person golf cart between 2-3 different companies and they all are together in the same area at the dock when you landed, would you go to the one where you saw carts up on blocks obviously in need of repair with others with stains on the vinyl, or to the one with scuffs on the cart bodies with pealing decals OR would you head for the one that had gleaming clean carts all nicely parked in a row? Well you guessed right the clean ones rent first.

Even the Police use golf carts!

I spoke with some cart shop owners who admitted that some times a new customer will come in and ask to rent a certain cart by just its looks and only later ask the price or if it is electric or runs on gas? They already know what I was trying to sell them on. Appearance sells or in this case rents. The same also goes for the rental houses and cottages. Most are found only by being listed on the Internet and can only be seen first on line before they are rented out, but if real life does not measure up in person to the photo there can be trouble.

Same goes for your business. You may ask how can she compare my business where I am to something in the paradise of the Bahamas?

Well it is simple. If you pull up in a sparkling clean vehicle with a clean rig just like in your ads or on line this new customer will be happy you are here to do work for them. They have the perception that their property will come out as nice. Also if you have before and after photos on your web site they also have in their minds how clean their property should be once you are done and are obviously ready to pay you to get it.

Always look at your self and business as if in a mirror and see if you like what you see?

Have a great week and I am glad to be back home, but it sure was pretty to look at.

New Web Site

Well Good News,

We are finally getting the new Web site up today Friday May 1st, 2009. It is a few months behind schedule from when we wanted it and there are still many additions and changes to be made but for the most part the basic system will be up and running.

New features include a new tab layout which allows you to go to the type of work you will be doing to see the products we recommend using for these jobs. That does not mean you may not use a product that is not on that drop down but these are the ones most used or recommended for the task.

Then on each tabbed page that is opened you will see the products description, sizes and prices. Current customers will still be able to go to the private customer log in area to see or print out a complete current price list so jumping around page to page to find pricing will not be necessary.

Coming soon will be the option to place items in a shopping cart order form. Although it will not be able to figure freight costs, since there are too many variables, it will send your order request to us here at Soap Warehouse where we will calculate the freight according to the order form and we will contact you back with the exact amount and departure shipping information for you.

There will now be a front page area we will place major announcements for anyone to see, links to our Blog, resource materials, our e-mail sign up button, and every month a link to our current Newsletter. This way everyone can come to the site and see the Newsletter instead of us trying to send out multiple batches of e-mailed newsletters just to clients we have e-mails for. We will still for a while send out e-mail notices when the new newsletter is available on the site.

Coming soon too hopefully will be photos and videos from our bi-monthly product contests. If you do not know about these contests please call and ask for the link to the forms and instructions. You could win product credit on your account by just sending in photos, videos and testimonials about the products you buy and use from Soap Warehouse. The link will be on the site as well shortly.

We will also have a page showing photos and information on previous and up coming events Soap Warehouse has sponsored or exhibited at. Right now these are only available at our intuit website at http://soapwarehouse.intuitwebsites.com/index.html there on the More Info page.

We will still have the private current customer only log in area with special offers and information, just for current clients.

We are adding a MSDS page listing for all products, right now it is just one large down loadable file but soon each tab page will have a link with each product to its own MSDS and in the future a technical product data sheet.

I hope that the new changes will make visiting our site easier and more enjoyable and we would love to hear any ones comments or suggestions about the site. Please send them to linda@soapwarehouse.biz. We are sending this out as an e-mail and are also posting this in its entirety as an entry in our blog.

For those of you who have never looked at our blog please take this chance to do so, you find some valuable information there. We also want to use the blog to answer any customer questions so please send us some.

Have a Great Weekend and Thank you for being a Soap Warehouse Customer.

Be Just 1% Better!

I just read some very interesting but true advice I would like to pass on to you.

It is better to be just 1% better for 100 reasons than to be 100% better for only 1.

If you take that philosophy with your business you will see that even little changes make a big difference.

For example if your biggest competitor is always giving a 10% discount to new or referral customers and makes a big point of it in their advertising, then you offer 11%.

Now sometimes you can not out do someone or something by even 1%, take "available by phone 24 hours as day" for an example. But you can offer a faster response time either for a call back or actual booked appointment. But you must be able to follow through on your claims so chose carefully. You could offer a superior brand of stain for deck work instead of the run of the mill that everyone else carries, this does not mean that you do not charge for it, just that you carry and market it as the best in the industry. You can offer discounted window cleaning with a house wash or complementary gutter cleaning with a roof cleaning. Anything that the customer perceives as you giving that extra 1% over and over during your job for them will make you stand out, get you referrals and more jobs.

Always leave the owners property better then you found it, and I do not just mean on the job you are being paid to do. I mean make sure you pick up all of your trash or even their trash that your cleaning uncovers, within reason. If your service included furniture removal and replacement for a deck or patio cleaning be sure it is put back correctly or better than you found it. It may cost you only a few extra pennies to rinse off those plastic planters, deck chairs or cushions to make them look better. Of course you can always offer side services for a complete through cleaning job on these items first. And you must be willing to do these sort of small jobs that take up extra time before you offer them to the customer. It does you no good to advertise that you offer these services and have to later, while on the job, refuse to do them because you have booked your time so tight that you can not accommodate them. No matter how much pre-planning you do or questions you ask something else will always come up.

But if you do that extra 1 % for the customer over and over it will pay off 100 times over.

Bio Barrier

The next product I would like to discuss is Bio Barrier. I wrote about this product last year but I will mention it again after speaking on Citrus X-terior earlier this week. Bio Barrier is a great follow up product to any cleaning where molds and mildews have been a problem. Like with roof shingles - once the black Gloeocapsa Magma algae has been killed and removed, or with vinyl siding or wood decking- once the green, yellow, or black mold and any mildew has been killed and removed.

Bio Barrier needs to be applied right after a through cleaning of the surface has been done and the area to be treated is thoroughly dried. Bio Barrier is not a mold or mildew killer but rather a growth inhibitor. Bio Barrier protects a surface it is applied to from the harmful micro-organisms that cause odor and mold growth from coming back. A properly treated surface will have effective protection for 6-12 months depending on the environment and frequency of exposure to direct water or indirect moisture.

Bio Barrier does not have to be used on the whole house, roof or deck. You can locate, mark or document, like with photographs or a drawing of the problem areas before cleaning is done to easily locate them later for treatment. Bio Barrier is used straight, not diluted. It can be sprayed, sponged or wiped onto the surface for treatment just so a light but complete wetting of the product is applied to the surface material. Bio Barrier does not have to be used to soak, saturate or be allowed to run down or pool on a surface to be effective.

Bio Barrier can be used as an add on to your normal cleaning as an added value, additionally priced service. For just pennies you could be able to give a no growth guarantee with your cleaning that would be a perceived added value to your customer.

Say for instance you clean a house and a few days later come back to apply Bio Barrier just to the problem areas. If you have left a sign in the yard stating your company name and number, plus left cards with your current customer with a referral offer, you may very well be coming back to that area to do a new job besides doing the Bio Barrier treatment and moving your sign to a different house's yard in the same neighborhood.

Bio Barrier will make you look good to your customers and if you did a quality first cleaning job it should bring you added word of mouth business as well when the mold does not grow back in just a few months. It also gives you a leg up as to why you should come back on a yearly basis to clean the house and retreat for the mold.

Bio Barrier is available in 1 gallon bottles and 5 gallon pails. You can call to order Bio Barrier at 800-762-7911 or go to our web site http://www.soapwarehouse.biz/ where you will find a Data Sheet and other valuable information about Bio Barrier.

Citrus X-terior House Wash Cleaner

I will be writing some entries this year about certain products that we carry, depending on when they are the most popular or when I may have been asked about them by a customer. So I will start with this newer Soap Warehouse House Wash "Citrus X-terior" for the Spring cleaning season.

The Citrus X-terior product has some great features: nice citrus scent, it can be used with bleach, it is very economical in price, but is still a good cleaner even when using at the top of its dilution rate of 1:50, non hazardous or DOT regulated, and it is biodegradable.

The advantages of using Citrus X-terior instead of using just straight bleach with water for house washing are the following:

One, you can use less bleach than you would normally use if you where just house washing with bleach and water alone. This reduces the effects bleach alone can have on plants and grass, without reducing the reason you are using bleach, which is to kill molds and mildews while removing the colored stains that come with them from the surfaces of the house.

For an explanation of how bleach works please take a look at the article I wrote on bleach for the "Cleaner Times" magazine. http://www.cleanertimes.com/pdfdocs/2009CTMag/Clearing%20the%20Air%20on%20Bleach%202009-02.pdf

Two, you have the advantage that you are truly using a soap cleaner to wash and remove dirt, oils and other harmful residues from the surface of the house, not just changing their chemical makeup to become invisible. This will extend the life of the paint, vinyl, hardy plank or brick surface of the house while improving its appearance.

Third, the clean citrus scent masks the strong bleach odor and leaves the customer with a more pleasant lasting reminder, than that of the just bleach.

Now Citrus X-terior is not for every job you may have, especially with the extremely dirty or neglected homes, but for a general once a year house cleaning product, Citrus X-terior is a very good one to have available and will make you money.

Citrus X-terior is available in a 1 gallon bottle, 5 gallon pail or a 55 gallon kit. Call the office to order 800-762-7911 or for current pricing, or go to our website: http://www.soapwarehouse.biz/.