By Linda Kassis—Without a doubt, one of the hardest parts of starting a professional service is pricing your services. So you want to quit your full time, secure, 8-5 job that guarantees you a weekly income to start a Signing Agent Business. You saw an ad in the local paper or on the Internet telling you how you can make $100,000 a year. You bought into this ad, took a course, studied the training and are now raring to go. A few key factors that this course didn’t teach you were “How to run your own business,” “Business Etiquette,” “Marketing,” “Research and Development,” and a million and one other things to becoming successful. Well, I am not about to claim that I know the million things but I will try to help with the other ONE, “The Do’s and Don’ts of Setting Pricing.”
If you have done your research then you have a good idea of how much competition you have, you already know where your competition is and how much your competition charges. (No? I didn’t think so but I was trying to give you the benefit of the doubt). These are key factors that you need to know. If you have already done this research, then you are miles ahead of your competition that took the same class you did. You will also find out that the majority of your successful competitors have done their homework and chances are they know that you are coming into the industry and are also getting ready for a major marketing campaign to over-ride yours. How are you going to compete for the same market share? If you thought that cutting your price was going to do the trick, you better think twice. This may be a great starting gimmick but in the end it will come back and bite you every time.
I will begin with the “Don’ts of Pricing.” Many who have gotten into this business without proper training and guidance have failed and are now going back to an 8-5 job. I will make an attempt to help you succeed where others have failed. If you have done your homework and have learned what your competition is charging, you are probably thinking, “I will just undercharge them and I should get a bunch of business, and after I have experience, I will then raise my prices.” I know this is what you’re thinking because every message board I have read, every chat room I have been to, and every training website I have researched having to do with Signing Agents, is telling you to do the same thing. I will use an example first then get into the meat and potatoes of “Setting Prices.”
Let us say that you find that the majority of your competition is charging in the range of $100 to $150 per signing. You have done your math on all expenses and feel you can do this job for less than and still make a profit. So you decide you will charge $50.00 per signing, than after six months to a year you will jump your prices to $100.00. That is still much less than your competition and your customers will be happy with your fees. Before you continue reading I want you to think long and hard of “How viable is this strategy”?
If you’ve ever gotten an estimate from several contractors and one stood out as really check, you are going to stop and think, “What is wrong with this picture?” Either this guy is a fool and doesn’t know what he is doing or he has forgotten half of the addition like my roof and the floor.” Chances are you will not use that contractor. So the too-much-cheaper strategy doesn’t work.
The other factor of low-balling and then increasing your prices later doesn’t work for this reason: For easy calculation, let’s say you charge $50 for a year and your clients are happy. Then you up your price by a third to $100. This is a huge increase no matter how you slice it even if you’re only matching or still cheaper than your competition. The cheaper-and-raise technique will either get you no work or will upset your client. The other thing you have to consider when charging way less than your competition is that you are working twice as hard and spending as much gas (double all your efforts and expenses) as your competition for less money. Between you and me and any successful business, this is the road to failure.
It’s a lot easier to overprice your services and offer discounts to your clients—that way, the clients perceive that they are getting a deal, and you are still getting a market rate for your services. For those of you who have been in business for some time and are well established but are losing business to the low-ballers in our industry, try giving a bit of a discount to your clients. Tell them “This month I am going to give you 10% (or whatever % you see fit) off on all your closings and I will extend this offer to all the schedulers in your department.” Not only have you pushed this closer to use you more this month but you just indirectly asked for a “referral.” if you do 1 extra signing that month from a referral or your client uses you one extra time instead of sharing the work with the competition you have made your money back. I am betting you get not only more from the scheduler but you will get additional schedulers contacting you. As a rule we don’t tend to refer friends for business but we sure tell them about a sale.
My recommendation is find out what your competition’s average price is, set your price within the same range then offer a discount from there. If you felt you could do it for half the price, offer your client a 25% New Client discount and then a 10% discount for their first 10 signings. This not only allows you to break into the market but also allows you to give an extended discount plus charge the same rate as your competition in the long run, but now you are also helping keep the Signing Agent industry a viable market for all.
There is always the risk that you will overprice your services at some point. Just keep in mind two important truths. If you do not charge what you are worth: You are guaranteed to burn out quickly and you will resent your customers for not providing you with a decent living and start treating them like dirt‐a sure formula for failure. I would suggest that you go to your competitors websites and search for pricing. This is not to say you should charge or copy your competitor but the prices are there and they are all over the internet. Remember, this is another good reason NOT to include your prices on your web pages. Take 10, 20 or even 30 prices, add them all together then divide them by the number of prices for the average price that your competition is charging.
Next I will give you a list of some of the things to consider when setting your pricing.
- Laser Printer
- Laser Fax
- Cell Phone
- Office or Home Office
- Internet (High Speed if available)
- Wireless Internet (Portable Office)
- Cell Phone
- Long Distance
- Secondary Fax Line
- Car maintenance (Oil changes, Tires, Breaks, Windshield wipers, Windshield washer fluid and everything else your car will ever need for repairs)
- Equipment Maintenance
- Additional home Utilities
- On the go Lunches & Snacks
- Printer and Fax Toner
- Printer and Fax Drums
- Paper Clips of all shapes and sizes
- Fasteners for Docs (depends on what you use)
- Stamp and/or Seal (Depending on your state requirements)
- All the money you spent on training materials
- All the money you spend and will on memberships with different organizations and Notary Listings
- The time you spend on research and marketing
- Business cards
- Thank you cards
- Software (accounting, web-design, spreadsheets, PDF etc…)
- Clothes (Business attire)
4) Everything Else
- Time away from home and loved ones
- Last minute signings (You are in the middle of supper and you are rushing off)
- Canceled evening engagements/dates
- Late docs and you are on the road till 1:00 am
- Canceled signings and you have already declined 2 signings for that time slot.
- This list can go on forever and you will learn this after you have been in business for any period of time. You will get upset with clients, you will get extremely stressed, you may need to pay for a message or therapy sessions.