Pricing Looks Simple Until It Is Not

Roger Magalhaes 0:00

It's more complex than it looks to come up with pricing. Also, it takes time to build a reputation. It doesn't happen overnight. Not because someone charges $100 an hour or $50 per shade that you automatically granted the same amount for yourself just because it comes with a reputation. It goes both ways. You might be great at what you do, but if your reputation is not good because you don't treat clients right, because you're always late, because you smell cigarettes, because your van is a mess, people are not going to be able to pay you what you ask for either.

Welcome To No Strings Attached

Intro / Outro 0:47

Welcome to No Strings Attached, the place where we untangle honest conversations about business reinvention and the pursuit of the American dream. Hosted by Roger McGalles, Brazilian-born, Boston-bred, Florida-based. He is an entrepreneur, speaker, and storyteller with 20 years of real stories, laughs, and screw-ups. This show is for anyone still searching for their place under the sun. So pull up the chair. The show is about to start. Here's Roger with No Strings Attached.

Roger Magalhaes 1:25

Hello, hello. Welcome to another show of No Strings Attached. My name is Roger Magalhaes and I am your host. If this is your first time here, welcome to the show. But if you have been here before, welcome back. Today we are going to talk about pricing. I'm gonna sound like a politic that doesn't really give you a straight answer when they are asked anything. But unfortunately, pricing in our industry, window covering industry, is basically like that. There's no really straight answer. There's so many variations, and perhaps that is another industry with the same kind of rules that we apply to our industry. But

New Video Format And Book News

Roger Magalhaes 2:19

before we get to that, I have a couple housekeeping items that I'd like to share with you. So I am recording from a different platform now. I used to do these on audio only, but recently I switched to Riverside, which is a different platform that also offers video. So from now on, you are going to see the whole show on YouTube and likely on Apple and Spotify as well as a video. So let me know about the format and we'll take it from there. Also, I'm very excited to share with you my book is completed, is ready, is on pre-sale on Amazon. It's called Nobody Told Me That, where I share 20 years of business and personal stories, what it takes, how to rebuild, how to get up when you get knocked down. So lots of great comments, great feedbacks from the people they already read. So check it out. I'll leave a link in the notes as well. So

Why Pricing Has No One Answer

Roger Magalhaes 3:43

as I said, we're going to talk about pricing today. And in our window treatment industry, there's nothing more complicated than that. Because when I first started, I didn't know how to price it out. And then I was asking around, nobody could really give me a straight answer. So this week I got a call from someone asking, how do I price it out, Roger? And that got me thinking because as I was going through my mind, there's not really an easy answer. So I'm going to just share a few different options when it comes to pricing. And that could be a guide for new installers, for dealers, for designers, workrooms, that really there's not one size fits all.

Per Unit Versus Linear Foot Pricing

Roger Magalhaes 4:46

Some people may charge per unit, like blinds and shades, maybe $15, $20. That's how I started out in the industry. I was working for these retail, they offered $15 per unit. Pick it up at the shop, bring to the job site, do it, and that's your price per unit. Then I started working for Lowe's, and Lowe's used to pay linear footage, linear, linear footage for treatments. Say you have 15 windows, and each window three feet, so you add them up, and that gives you, I don't know, 10, 12, 15 linear foot of shades, and that was $10, $7, whatever price it was, and that was your price. So we go from units to linear footage, and then when you do shutters, they were charging by square footage.

Shutters Square Foot And Install Reality

Roger Magalhaes 5:55

So you measure the window, width and height, multiply, divided by 144, then you have your square footage. And also, when it comes to shutter, there's another big difference. I was based in New England, which most windows have window casing. When those situations happen, the most common installation method for shutters are direct mount. And as you probably know, now very few windows are square. And what happens is when you put the first panel, you don't know as your starting point, so you don't have a reference. When you do your second panel and you go to close it, now the panels don't align. And now you need to start making adjustments. Those adjustments take a lot of extra time. Multiply that by 5, 6, 10, 15, 20 windows, and you spend a good three, four extra hours just adjusting the panels to make sure everything looks great. So when you go south or you go west, a lot of the windows there are just the sheet rock opening. Nothing finished, no woodwork, and that makes installing shutters easier because dealers and installers are going to order the panels with a frame. And what that means is they put the frames together and then they pretty much mount the frames over into the opening. If the windows are already square, it's not a big deal because the covers on the overlap on the trim pretty much covers all the imperfections. So installations there are much quicker. For that reason, what we charge in New England for square footage on a shutter is a lot more, it's a lot higher than what people charge down in places that they just pretty much put the frames together and overlap over the open case.

Drapery Pricing And Common Add-Ons

Roger Magalhaes 8:27

Then when it comes to draperies, most people charge per linear foot for draperies. So the window has 20 feet of linear footage. That is how much you charge per for your installation. Obviously, there are other things that you need to consider. A lot of people don't really dress the draperies as they are supposed to. They charge extra for steamy, they charge extra for high ladder, and all of those things add up. Now, I also know people that charge hourly

Hourly Rate Pros Cons And When

Roger Magalhaes 9:10

rate instead. So whatever time it takes, that's how much they charge. So there are goods and bads about that because I've been to job sites that it was only three windows, but it was complicated. There's nothing on the ceiling to hold my bracket, so I had to come up with a very engineered situation, put toggles, mount something else on the top in order to make it work. So this all takes extra time, extra effort, extra trips to your van to grab materials and such. For that reason, if I was charging the same $15, it would have taken I'll be at a loss. So if I was charging per hour instead, then I'm kind of covered for my time because it took whatever time it took. But here's the thing: you cannot switch back and forth and jump from one side to the other based on the job.

Price Lists That Prevent Bad Surprises

Roger Magalhaes 10:21

So what people usually do, they create a price list. And installers give a price list to their dealers, to their workrooms, to their designers, so they can figure out how much an installation job is gonna cost. So they can give a price to the homeowner. Nobody likes a surprise, especially when it comes to pricing. So you need to figure out what is a good price strategy for you. Obviously, it's even harder for someone starting out because they have no clue where to start it from. So in my case, when I started out, I started out using this company that was offering $15 per shade for per unit when I installed. So I figured it wasn't that hard if I could install two or three in an hour, I was making, you know, $35, maybe $60 an hour. I figured it was good. Again, I wasn't starting out, no much experience, so it was okay. But as time went on, I realized how much more is involved, how much more details, how many trips I go back and forth inside my van to get the right tools and everything. So then you get more practice, you get more experience, you get extra parts. So you can fix a job, you can fix products that perhaps didn't come right from the manufacturer or got a little damage, a little scratch in transit. So having your expertise may save the dealer a reorder. So based on those extras that you have in your back pocket now, you might be able to charge a little bit more. But again, it is a strategy that you need to develop, you need to come up with what is the best way to approach.

Overhead Volume And Profit Math

Roger Magalhaes 12:39

Everyone is different, but the most important part, you need to figure it out if you are making money, and the only way you can figure that out is really tally up, create a list, go through your QuickBooks, see all your expenses. That's what we call the cost overhead. And based on that, you need to calculate how many hours you need to work, how many shades you need to work, you need to come up with an average per job in order to offset all your costs. Because, say you charge $150 per unit, it sounds really amazing, it's a phenomenal price, but you only do two jobs a month. Now you you charge fantastic, but you don't have enough money coming in to offset all your expenses. So it doesn't do you any good. So perhaps you need to lower your prices in order to get the volume, in order to have enough money at the end of the month to pay for your bills. So again, it's a very more complex than it looks to come up with pricing. Also, it takes time to build a reputation. It doesn't happen overnight. Not because someone charges $100 an hour or $50 per shade that you automatically granted the same amount for yourself just because it comes with a reputation. It goes both ways. You might be great at what you do, but if your reputation is not good because you don't treat clients right, because you are always late, because you smell cigarettes, because your van is a mess, people are not gonna be able to pay you what you ask for either. So again, it's a huge combination of a lot of things.

Reputation And How Clients Decide Value

Roger Magalhaes 14:49

Some clients, I have a consulting uh business consultant, a friend of mine, and he always advised never to charge per hour because people feel like you are kind of milking the clock. You're not providing enough or a lot of efforts because you're depending on the amount of hours that are gonna come. Lawyers work that way, accountants work that way, but for our industry, for trades in general, is not really a good strategy. People feel like you're trying to take advantage of them. So what I do actually, I calculate in my head, because now I have 20 years of experience, I more or less have a better sense how much time I'm gonna be on the job site. So in my head, I have a number per hour that I can just throw in there. So let's say I charge $100 an hour. I'm never gonna tell Mrs. Jones it's gonna be $100 an hour. But then I figure I'm gonna be there for two hours. So instead of saying $100 an hour, say I'll charge you $200 for this job or whatever. But what I'm saying, don't be so upfront and say I'll charge you per hour because it doesn't really give a kind of smooth start with a client. But

Templates Second Tech Ladders Delivery Fees

Roger Magalhaes 16:28

on the same token, you can add an hourly rate to your price list for an unexpected situation. For instance, I had on my price list a per hour in case I need to do something completely unique that I normally don't charge per for for that kind of work, or if I'm doing a repair, or if I need to do a template, or whatever. If it is a too complicated job that requires extra hands or require, you know, extra work, I say this is my base price, and I also charge an extra $200 for two hours of working doing this. Other things to consider templates. Usually people charge a flat fee for templates. If you need to have a second hand on a job site, perhaps it's a bigger job. You need two people holding one on each end of the of the shade. You charge for a second man. If it is two-story high, if it is commercial, if you need to assemble scaffolding or you need to bring high ladders into a job site, all those things cost extra. So when you create your price list, you figure out if you want to do linear foot per unit, square footage, whatever the case may be. As I said, use your a price that's gonna cover all your expenses and make sure it covers it, it gives you also profit at the end of the day. Also, account for those little things that are not usually normal to every job. If you do a pickup or a delivery, also some people, uh, some workrooms may ask you to pick up a job or pick up materials or whatever, or receiving products, some people charge an extra fee. So make sure all those costs are included.

Listener Questions And Closing

Roger Magalhaes 18:35

And that's basically what I have for you today. So let me know in the comments how you charge, how your competition charge. If you need any feedback, if you want to bounce in ideas, I'm more than happy to do that. That's how I learn, sharing my experience with others, learning from other people, and that's exactly what we're here for to help each other grow. Now, if you are in a different industry, let me know in the comments how do you charge, or is there different ways to charge in your industry as well? So also let me know how this new format looks, and I'm looking forward to your comments. Take care, and I'll see you next time. Bye.

Intro / Outro 19:24

And that's a wrap for today. Hope you're leaving with something that sticks. If this episode resonated, please share it with someone who needs to hear it. For more information, follow Roger at RogerMegallus.com and find the link in the show notes for a free chapter of his book, Nobody Told Me That. We'll see you next Sunday with no strings attached.