It may sound like a fairly straightforward question but for your home watch business to succeed you need to have rates that will result in a profit for you. You also have to keep in mind that you can’t charge astronomical rates as you’ll spend most of your time not working. I have devised a series of points that will help you to arrive at the perfect rate for you to use when you charge your home watch business customers for your service. Here they are
1 – Find Out What The Competition Is Doing
There is a lot you can learn from the competition. If you have a home watch business near you or somewhere in your state that has been in business for any length of time, you can do some homework on them. Ultimately, your goal would be to find out what their current rates are. I like to encourage entrepreneurs who launch start-up businesses from home to charge an hourly rate (more on that in a moment). Whatever you do, don’t rely on the data you gather from competitors to be your complete guide. Use it for reference at the most so you have at least an idea where you should go with your rate structure long before you start to charge customers.
2- The Hourly Rate
I just mentioned that I am a huge supporter of charging an hourly rate for service. The reason for this is that it gives you a consistent figure to use and you can include a number of additional services within that hourly rate to demonstrate to potential customers that there is value in the rate you charge. Extra tasks that are outside of your normal list of services would require an additional add-on rate. An hourly rate is easy to quote and easy for clients to budget for so it keeps it simple for you and your customers. If your competition is charging flat rates per task, you may want to use that instead of hourly rates. Regardless, you will be charging somewhere around $50 per hour and if you work your business for just 20 hours per week, that equals $1,000 per week. So, this is one of the best things about using an hourly rate, it adds up quickly.
3 – Extras And Add-ons
There are only so many things you can charge out to your customers when you own and operate your own home watch business. However, if you build your service list correctly, you will find that you will have a few things that can be used as extra services that would require an additional fee. An example of what I’m talking about comes from the fast-food industry. A burger will cost you one rate. Add cheese and it will cost a little more. Include fries with that cheeseburger and the cost is somewhat more. Add a drink and maybe the combo price will be less than purchasing all three of those items separately. You can do the same with your home watch business. Regular home checks would be the burger. Adding mail collection is the cheese added to the burger. Additional home checks can be the drink add-on. Doing all three could fall under a combo price. See what I mean?
4 – Surcharges And Other Fees
You could quite easily tack on additional rates that go beyond what has already been discussed here. I’m thinking more along the lines of extra fees for work done outside of your normal services. But I do have to stress something very important here…you must do everything in your power to not ‘nickel and dime’ your clients to death with a fee for this and a fee for that if some of those items you are charging out for can be incorporated into one of your already established rates. The idea of being a small business owner is to charge enough to make a decent profit and not to charge so much that you lose or have a great deal of difficulty getting business.
5 – Know Your Market
Here’s one more reason to just use the information from your competitor as only a guide when establishing your home watch business rates. Your community and the trading area will have a tremendous impact on what your final rates will be. Common sense should tell you that in bigger communities the rate will likely be higher due to the larger pool of potential clients and higher cost of doing business. This also means that in a smaller town, your rate would be less. These variables are key to your success and as a result, you may find that adjusting your rates to match the economic conditions of your community may make the difference between being successful or not.
They’re Only Numbers, Right?
I suppose you can find a little relief in the fact that your rate is just a number. However, it does have to be the right number that will allow you to make your home watch business a success. Even if you find that at one point you have to adjust your rate to address changes in the market, that’s okay. The idea here is to give you some key points on how to set that rate. Nothing is written in stone here. Plus, you may even find it useful to offer small discounts for regular customers, maybe a senior’s rate or possibly a repeat customer rate. The important thing to keep in mind here is that it is your business and you control everything related to it. That includes what you are going to charge your customers. I trust that my tips here have helped you to understand that you just can’t pull a number out of the sky and run with it. Good luck!