Do you ever feel like you're playing a guessing game when pricing your pressure washing jobs? You're not alone. This is a common challenge in the industry, especially for newcomers. But don't fret! This article will guide you on how to price pressure washing accurately and help you make more profit. Are you ready to turn the tides in your favor?
Importance of Accurate Pressure Washing Pricing
Accurate pricing can make the difference between running a profitable business and struggling to make ends meet. By underpricing, you risk not covering your costs, while overpricing might drive potential customers away. Sounds like walking a tightrope, right? Let's dive into how to maintain a balance.
What are your competitors charging? Understanding your market will help you to price your services competitively. But remember, cheaper isn't always better. You're offering quality, not a bargain bin service.
Evaluating Overhead Costs
Overhead costs are operating expenses needed to run your business. Here are some typical overhead costs associated with a pressure washing business:
- Pressure Washing equipment
- Fuel and maintenance
- Business licenses and insurance
- Cost of marketing your Pressure Washing business
- Office space and supplies
- Employee wages
- Pressure Washing software to help run your operations
Calculate your hourly overhead costs
- Annual Operating Costs: Using the list above as a guide, add up all of your operating expenses over one year (12 months)
- Annual Working Hours: Determine how many working hours your business will operate during the year. For example, if you plan to work 40 hours per week, then 40 hours x 52 weeks in a year = 2,080 hours
- Hourly Overhead Costs: Divide annual operating costs by annual working hours:
Hourly Overhead Costs = Annual Operating Costs / Annual Working Hours
Pricing Structure Options
There are three main structures you can use to price your power washing jobs:
- Flat Rate Pricing: This is where you charge a single rate for the entire job. It's a straightforward method, but it can leave you short-changed if you underestimate the amount of work involved.
Typically, pressure washers set a flat fee ranging from $90 to $200, the exact amount being contingent upon the nature of the job.
- Per Hour Pricing: You charge based on the amount of time it takes to complete the job. This method ensures you're compensated for all your time, but it can be harder to estimate for customers.
Depending on your location, the scope of the task, and the necessary equipment, set your rates between $25 and $100 per hour.
- Per Square Foot Pricing: Here, you charge based on the area cleaned. It's a common method for larger jobs like house or driveway cleaning.
The cost you can levy ranges from $0.10 to $0.50 per square foot, contingent upon the complexity of the task and the property's location.
Choosing the right pressure washing pricing structure depends on your specific business model, your market, and the kind of job you're doing.
How to Calculate Your Pressure Washing Pricing
With your costs, pricing structure, and the market rate in mind, set a price that is competitive yet profitable. Consider your unique selling points. What makes you stand out? Perhaps it's your attention to detail or your exceptional customer service. Capitalize on these.
- Service: Select one of the three service pricing structures listed above - Flat Rate, Per Hour, or Per Square Foot.
- Material: Add up the costs of materials needed to complete this job - cleaning solutions, degreasers, etc...
- Overhead: Calculate your annual hourly overhead cost as shown in the section above. Multiple your annual hourly overhead costs by the number of hours the job will take.
- Profit Margin: Decide on your desired profit margin percentage. Typically, pressure washing businesses aim for a 15-20% profit margin. Use this equation to determine the profit margin dollar amount:
Profit Margin = (Service + Material + Overhead) * (Profit Margin %)
- Price: Here is the equation for the pressuring washing job price:
Price = Service + Material + Overhead + Profit Margin
Value-based pricing gives you the ability to charge at premium level prices above the competition.
Identifying the Value You Offer
People don't buy pressure washing services; they buy clean, attractive properties. Show them the value they're getting from your services. This is value-based pricing in action.
Communicating Value to Customers
Explaining to customers why your service is worth the price can result in higher rates without scaring them off. Isn't it easier to justify a cost when you understand the value behind it?
The Role of Experience and Reputation
Increasing Profits with Experience
As you gain more experience, you can price your jobs higher. After all, you're more efficient and knowledgeable, aren't you?
Leveraging Reputation for Better Pressure Washing Pricing
A strong reputation allows you to charge more for your services. It's the trust tax – people are willing to pay more for a provider they trust.
Accurately pricing pressure washing can be a tricky task, but with a clear understanding of your costs, the market rate, your value, and leveraging experience and reputation, you can price your services more accurately and increase your profits. Remember, the goal isn't to be the cheapest but to offer the best value for money.
- What factors should I consider when pricing my pressure washing services?
Labor, equipment, supplies, market rate, and your unique value proposition should all factor into your pricing.
- How can I justify a higher price to my customers?
Communicating the value you provide and leveraging your experience and reputation can help justify a higher price.
- How does market research help in setting my prices?
Understanding what your competitors charge helps you to set a competitive and profitable rate.
- What is value-based pricing?
Value-based pricing involves setting prices based on the perceived value of your services to the customer.
- Can I increase my prices as I gain more experience?
Absolutely! As you become more efficient and knowledgeable, you can justify higher prices for your services.