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Should New Home Business Owners Charge Less?

by Jean Murray on February 11th, 2009

I was talking the other day with a new client. She is starting a professional organizer business and she found that new professional organizers charge $25 to $35 an hour, while more experienced ones can charge up to $65 an hour.  I was a little surprised.  She is an experienced professional organizer, because she worked for someone else.  But she hasn’t owned her own business yet.  She and I both wondered why she had to charge less.

Home Office Warrior offered the opinion that new virtual assistants (VAs) should charge less because “you get what you pay for.”  In other words, people who are new at a profession aren’t as well trained and they aren’t worth as much.  My VA Cindy (at VirtuallyFantastic) agrees.  She says there is a learning curve and you just aren’t as good or productive when you are starting out.

But when do you increase your prices?  How do you determine how much to increase them?  One of the most difficult things small businesses have to do is raise prices.  Some experts say you should make small increases more frequently, to get customers used to the idea that you are going to keep raising prices.  Other experts say you should make increases less frequently, but make them substantial.

In today’s volatile economy, raising prices may mean losing customers.  People stopped spending in September 2008, and it will take a lot for them to get going again.  They don’t want to pay a lot, particularly for services, and people know that the cost of living is not increasing right now, so if your costs aren’t going up, why are you raising your prices?  What a dilemma!

An article a few years ago in Entrepreneur Magazine suggests raising prices when it will have the least impact or be least noticed.  That is, when people are in the mood to buy.  If you have a seasonal business, increasing your prices at the beginning of the buying season might be expected and less resisted.

What do you think?

Image source: StockXpert

Tags: , raising prices, virtual assistants

POSTED IN: Uncategorized

2 opinions for Should New Home Business Owners Charge Less?

  • Miranda
    Feb 11, 2009 at 6:29 am

    As a freelance writer, I know I get paid more now than when I first started. But, luckily, with writing it happens through a more natural process. I was hired for better paying jobs as my experience level and quality level improved. Then I could stop taking the lower-paying jobs.

  • What Should You Charge in Your Quilting Related Business?
    Feb 16, 2009 at 12:05 am

    [...] Murray discusses this topic at Home Biz Notes, Should New Home Business Owners Charge Less?  Take a look at Jean’s post and see what ideas you come up with about charging in your own [...]

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