Pricing and margin strategy checks whether what you charge still covers the full cost of doing the work well, then rebuilds quotes and packages so the work you are busiest with is also the work that pays. It is often the fastest payback of any consulting, because a few points of margin go straight to profit without more sales or staff. We give commercial advice on price, not accounting or tax advice.
Who it is for
It suits businesses that are busy but not as profitable as they should be. Signs we look for:
- Prices have not changed in more than a year, while wages and costs have.
- Discounts are given by habit rather than by rule.
- Certain jobs routinely run over the hours quoted.
- One or two large customers negotiate hard and take a lot of your time.
- You cannot say, without checking, what your gross margin was last quarter.
The arithmetic that matters
A small price change has a large effect on profit, and a small discount has a large cost. Take an illustrative Burnaby business with $900,000 in sales and a 30% gross margin, so $270,000 gross profit.
- A 5% price increase with no loss of volume adds $45,000 of sales, all of it gross profit. Gross profit rises to $315,000, an increase of about 17%.
- To break even on that same 5% increase, the business could lose up to about 14% of its volume. (New margin is 35 / 105, about 33.3%; $270,000 ÷ 0.333 ≈ $810,000 of the new, higher-priced sales, roughly 86% of the original volume.)
- A habitual 10% discount on a third of jobs costs about $30,000 a year in gross profit.
Most owners overestimate how many customers would leave over a modest, well-explained increase. The plan tests that with your own customer list.
What we do
- Profit by job type and customer. Using recent jobs or orders, we work out actual margin after overruns and rework.
- Find the leaks. Discounts, unbilled extras, free call-backs, small orders that cost more to process than they earn.
- Set a margin floor. A minimum gross margin for any quote, with a simple rule for when an exception is allowed and who can approve it.
- Rebuild the offer. Where it helps, clearer packages or tiers so customers choose between good, better and more, instead of haggling over one figure.
- Plan the change. Which customers get what increase, when, and with what explanation.
What you receive
A pricing model, a quoting rule and a rollout plan. You get a spreadsheet model of your price structure, a one-page quoting guide your staff can follow, draft wording for customer notices (as templates with placeholders), and a schedule for the rollout. The quoting guide often doubles as a fix for the owner-bottleneck problem described in our operations and capacity review.
Timeline
Four to six weeks for most firms. Week one is data collection, weeks two and three analysis, week four the recommendations and model, and the remaining time is spent preparing the rollout with your team. Increases themselves are often phased over one or two quarters.
How results are measured
By gross margin and by how many customers you keep. We record the starting margin by service line, then track it monthly alongside customer retention and average job value. If you continue with monthly owner advisory, these numbers sit on your scorecard.
Mistakes to avoid
- Across-the-board increases with no explanation. Customers react to surprise more than to the amount.
- Discounting to win work you cannot deliver well. Cheap, rushed jobs cost more in call-backs and reputation.
- Pricing by competitor alone. Their costs and capacity are not yours.
- Letting the largest customer set the terms for everyone. Big accounts can deserve better pricing, but it should be a deliberate choice with a floor.
Proof from our HVAC work
Higher-value, better-qualified work beats more work. In our HVAC work, HVACDeal.ca produced 500+ leads at a 12:1 ROI, and that return depended on the value of the work being sold, not only on volume. See the results page for what transfers to a non-HVAC firm.
Price and next step
Pricing projects are quoted after the free consultation, from $3,500 plus GST. A single-session pricing review is also possible at hourly rates. See pricing, then call, text or email to begin.
Frequently asked questions
Is this accounting or tax advice?
No. This is commercial pricing strategy: what to charge, how to package it and how to explain changes to customers. We work from figures your bookkeeper or accountant has prepared, and for tax or accounting questions you should speak with your CPA.
Will raising prices lose us customers?
Some, possibly, and that is often fine. The plan identifies which customers are profitable at today's prices and which are not, so any losses tend to come from the unprofitable end. We also stage increases and prepare the wording so long-standing customers are not surprised.
How often should a small business review prices?
At least once a year, and whenever a major cost such as wages, materials or rent changes noticeably. Many owner-run firms go two or three years without a review and absorb the difference out of their own income.
Do you set prices for us?
We recommend; you decide. You get the model behind every recommendation so you can test other options yourself.