Even though your Virtual Bookkeeping Business is centered around talking about our client’s income and expenses many bookkeepers often don’t like to talk about money when it comes to their business. And you don’t like to look at it, either. It’s so much easier to just keep doing whatever it is you do to make money than it is to peek at your actual Virtual Bookkeeping Business finances, to get a picture of whether or not you’re really profitable.
It’s icky, and you don’t want to look because you might not like what you see. So you don’t look. You don’t tally things up. You don’t analyze your pricing to figure out if it’s high enough, or if you’re giving away the store. You turn your head away and look for the next project you can bid on, the next referral you can follow up on, the next cool mailing you can do, or the next networking event you can attend. Maybe one of those will pan out and you can get some new business, and keep the money coming in. And then you won’t have to look at the money you’re making, and whether or not you’re actually profitable.
Let’s think about what money really is. Money is a tool. It isn’t good and it isn’t bad, it’s neutral. It’s a way to exchange value, a way to trade.
TRY THIS THREE-STEP PROCESS TO SET PRICING WITHOUT FEELING ICKY, AND GET PAID WHAT YOU’RE WORTH.
Do the math
Figure out what your Virtual Bookkeeping Business Services would be worth if you billed by the hour.
If it takes you 10 hours a month to manage a client’s bookkeeping needs, you can use an hourly rate of $50.00 per hour for this part of the exercise.
For example, Monthly Bookkeeping Services for $500 a month equals 10 hours total work = $50 per hour.
You can then use this number to come up with the first part of our pricing exercise, by multiplying $50/hr by the number of hours you think you will be spending for your new service
Check what the traffic will bear
Now that you have an idea of what 10 hours of Monthly Bookkeeping Services should cost based on the pricing of your existing services, ask yourself, would my clients pay this amount for this service? Only you can answer this.
If it seems too low (and sometimes it will), you can always raise it to what you think your clients will find reasonable and the needs of your client. Remember, perception is reality, and if you price your service too low, people won’t value it.
If it seems too high (and sometimes it will), you can think about adding extra value to your client i.e training, monthly reviews etc. You can’t go lower than your math tells you to—after all, you’re already making that basic $50 per hour on other services, and you don’t want to cut your profits.
Check your own ickiness meter
After you feel you have a good price based on the math and what the traffic will bear, ask yourself how you feel about the price for your services. Will you feel good making this amount doing it? Or will you feel icky? Is it enough to get you excited? There is no real reason to offer bookkeeping services that you don’t feel excited about, including feeling excited about the profitability of it. Business is all about the exchange of goods and services for a profit.
YOUR CLIENT TAKES HIS CUE FROM YOU
It’s up to you to balance the energy of the money exchange in your Virtual Bookkeeping Business so you get paid what your work is worth—your client can’t know this and will assume you have priced your work to make a good profit. Often, clients are unaware of what is involved in the work you do and are happy to pay for what they understand. By sticking by your guns with pricing, you may find your clients appreciate the high value of your work.
The next time you start to feel icky about the money you are receiving from clients on certain aspects of your work, remember to check the balance of energy in your pricing. If your pricing is right, you’ll feel good about looking at your money. And if your pricing isn’t right, now you know what to do about it.