Packaging Your Web Design Service - WordCamp Brisbane 2018€¦ · • Small business owner (old JTCS business being split) How to Job Search. FAQ Business Training • NSW Government

Packaging Your Web Design Serviceto save time and make more money

Presented by Jane Tweedy for WordCamp Brisbane October 2018 #wcbne #faqbusinesstraining Twitter @faqbusiness

faqbusinesstraining.com.au ©2018 FAQ Business Training 1

Disclaimer

•All information provided is general in nature and may not apply to you.

•Please arrange to speak to me one on one, and/or seek individual advice.

•You can receive a copy of the slides for your personal use. Please do not distribute to others.


Agenda• Speaker introduction• Determining underlying price• Packaging

• Move from hourly• Tiered packages• Value add extras

• Challenges• Summary and additional Q&A


Speaker introduction – Jane Tweedy

• Small business owner (old JTCS business being split)How to Job SearchFAQ Business Training

• NSW Government Business Connect Advisorvia Western Sydney Business CentreProvide four hours of advice at no cost to small business

• At WSBC worked with over 850 small businesses one on one• Former life in corporate • Lifelong learner including MAF


Business Connect

•NSW Government (NSW Department of Industry) funded program

•Available to all NSW resident small businesses •4 hours fully subsidised one on one business advice –NO COST to you!

•Not NSW? business.gov.au/assistance

©2018 FAQ Business Training 5faqbusinesstraining.com.au

Common pricing issues

•How long?•Creatives•How to quote•Sticking by your price•Justifying value•Making money, not just work!


Why is pricing so important?

BAD (YET REAL) EXAMPLE:• Sale price: $100• Buy item w/s: ($85)• Shipping (free): ($ 8)• Packaging: ($ 2)• GROSS PROFIT ? $ 5 No it’s not … because …………• Labour, petrol for 3 hours driving to collect and post item,

overheads, marketing= way into negatives!!!


Pricing services

•Very similar to products•Packages are your ‘products’•Packages contain

productised services

… but wait there’s morefaqbusinesstraining.com.au ©2018 FAQ Business Training 8

Communicate your value

•People buy when:

•You solve their problem •They feel good•Can see a result•Price acceptable


Pricing – the hidden value

•Clients different•Value differently

= Your ideal client?

•Your social proof, awards, reputation


Determining priceStart with a base chargeable hourly rate


Calculating cost

•COGS (variable)•Pack & ship•Overheads (fixed)•Labour & profit


Labour cost

•Direct (P or S related)• Indirect (business)

•Time versus expertise•Functions


Tax

Put aside immediately:•GST•PAYGW/Super

•Money aside for EOY tax


Overheads/fixed costsCosts paid regardless of volume


Overheads/fixed costs - essential

Pay even if you make no sales• Insurance•Equipment • Industry association* fees (and linked CPD)•Website/domain name…•Software

* Can be optional


Overheads/fixed costs (optional)

•Networking fees•Business coaches/advisors•Training costs – WordCamp incl. travel•Higher priced software•Marketing


Rough break even calculation

Source: NAB


Variable costsCosts directly related to the sale


Variable costs

These can be reduced if need be:•Materials (customer maintains)•Supplies (consumed: ink, disposable gloves…)•Sub contractors …


Profit and youNot an after thought!


Profit

•Pay yourself first • Even if you have staff

•Arbitrary, % of sales•Benchmark


Profit

The most positive impact on profit is to raise prices


Acceptable pricing rangeWhat price can the market take?


Acceptable price range

Check your price falls in peer range or adjust inputs


Too high

Too low

ACCEPTABLE

$$$

$0

$

$$

Why we don’t quote hourlyHourly rates are too easy to question!


Labour hourly charge – why not?

•Turn around to result• Confidence• A lifetime to get the hour• Hourly rate punishes speed• Relative risk


Video to watch

• Chris DoHow to Price Design Serviceshttps://www.youtube.com/watch?v=RKXZ7t_RiOEKey messages in video:@3’50” – price client not job@11mins – hourly rate time/$

punished for being good?@21 mins - social proof, least risky option, be an expert@27”25’ – increase revenue, guarantees, ROI


https://www.youtube.com/watch?v=RKXZ7t_RiOE

PackagingMinimise hourly rate quotes


USP, feel good and solution

•Value – emotional benefit•Unique selling points (USP)

•Be positive

•Solution to their problem•Goal/resultfaqbusinesstraining.com.au ©2018 FAQ Business Training 30

Hourly rates base but not disclosed

Minimise hourly rate quotes•comparison-itis•penalises efficiency/expertiseinstead•explain your service• include value-add offers


Packaging basics

Combine products and services•More perceived value•Productise your service – save time


Package tiers

Consider three tiers

•Tier one at budget•Tier two more perceived value, but no extra time•Tier three increase in cost and time, and value


Three tier packaging

Scope, time, timeframes, quality, cost = perceived value


Outside boxes are perceived client value.

Perceived value


Bronze/silver similar time/cost


Orange boxes are your cost


Silver = more profit without more effort


Middle boxes are your profit

Bronze budget package

Extras should help you …• win the deal• minimise time answering questions

• minimise variations without extra charge

= save time!


Bronze budget time savers

•Tedious questions•How to’s• Instructions•Fiddly things•Needs visuals


Bronze – web examples

•Website brief document/ebook•How to …edit text•… add a photo•… insert a blog•Checklist items needed for site


Value add offers – silver

Extras not extra time•Create once and resell over and over•May be flexibility, added payment methods•Could be level of inclusions, limited scope of suppliers


Value add offers – silver

•Productised services•Sell on your site too•Addresses pain points/questions•Genuine extra value •FOMO


Value add offers – web examples

• What pages for your website• How to do keyword research• What to include in your about page• How to create 100 blog ideas …

Presented as videos, ebooks, short online courses …


Value add offers – gold only - time

More time•Greater selections•Could be level of inclusions•More consultation•More to and fro by phone and email

… charge accordingly!


ChallengesExceptions and difficulties


How many sales to allocate costs to?

•New business•Can you forecast?•One service or multiple?•Lead generators (loss leaders)?

•How do you allocate the fixed cost?


Value trade-offs


Cost

Scope

• Only reduce cost if something else reduced• Consider your values

Trade off if reduce price

•To reduce price must give up something


CostCost

Scope creep

•If the customer wants more –charge for it!!!•Be clear from the outset – manage expectations!

•Be clear in your agreement


Challenges arising for creatives

•Need to be ‘in the zone’•Making a decision•Perfectionism•Cost of quoting


Qualify your clients

•Your ideal client?•Genuine interest and urgency?•Capable of committing time and money?

•Be friendly, gauge the person•Do not cross the line


Changes to processes

Time calculations•Often under-estimated•For at least a few weeks

time log every thing


Changes to processes

Restrict choices• Too much choice = indecision!• Only gold gets free reign• Otherwise limit suppliers/choices/themes

Too perfect?• Is perfectionism ruining us?


SummaryPricing and packaging


Summary of pricing• Determining price

• Overheads/Fixed• Variable costs• Profit and owner time• Acceptable price range• Allocate across business


Summary of packaging• Packaging

• Three tiers• Bottom minimal time• Silver extras not time• Gold more time

• Challenges• Calculating time• Communicating value


Next steps

•Review your costs and pricing• Sign up for additional online training• https://faqbusinesstraining/bbbsbss

•Review your value proposition•Review your peers

•Test your new pricing


ContactsKeep in touch with FAQ Business Training

[email protected] or 0490 122 041 or via LinkedInSign up to receive emails about new courses (some free)!

NSW Business Connect Advice (4 hours no cost)Available across NSW

https://www.industry.nsw.gov.au/business-and-industry-in-nsw/businessconnectOutside NSW alternative business.gov.au/assistance

Thank you for joining me today!


mailto:[email protected]

https://linkedin.com/in/janetweedy

https://www.industry.nsw.gov.au/business-and-industry-in-nsw/businessconnect

Pricing a cushion – bonus contentMore stuffing than you may expect …


The obvious

•Fabrics•Cushion insert•Trim•Zip•Cotton•Packing/shipping•Care label


The rest of the pricing inputs

Compare Myer vs a sole trader making the cushions:- Direct labour costs (e.g.

sewing)- Indirect labour (e.g. admin)

- Overheads/fixed costs- Both optional and essential

faqbusinesstraining.com.au ©2018 FAQ Business Training©2018 FAQ Business Training 60

Overheads excluding labour

faqbusinesstraining.com.au

Big business Handmade

- Electricity - Electricity

- Premises rent or mortgage - Patterns if applicable

- Phones - Pins, needles

- Marketing – print, TV - Equipment (purchase and maintenance)

- Fitout and racks


- Cleaning products - Software, business equipment

- Point of sale system - Insurance

- Accounting system, software - Petrol and car mileage

- Insurance - Website and marketing

- Uniforms - Tape, pens to help packaging

Obvious

Not soobvious

Far from complete!This is just a starter!

©2018 FAQ Business Training©2018 FAQ Business Training 61

Labour

faqbusinesstraining.com.au


- Offshore workers (Pakistan) low cost - Sewing time (often not fully charged)

- Sales staff - Cutting and pinning time

- Time to package and deliver

Big business (charged) Handmade (rarely charged)

- Head office staff including marketing - Admin and invoicing

- Cleaners/security - Designing, picking out fabrics & trim

- Designing/choosing design - Travel time to shop and post office

- Staff Christmas party! - Packaging time

- Board of Directors - Marketing and admin + you

Direct

Indirect

Not complete.This is just a starter!

©2018 FAQ Business Training©2018 FAQ Business Training 62

Documents

Packaging Your Web Design Service - WordCamp Brisbane 2018€¦ · • Small business owner (old JTCS business being split) How to Job Search. FAQ Business Training • NSW Government