Many young technicians tend to under price themselves and some even feel guilty for charging so much for something that they enjoy and would probably do for free. The leading cause of undercharging is not knowing “the cost of doing business”. Here is a method of determining what your “cost of doing business” is which will help you set your prices and not feel guilty for it.

To find out you cost of doing business, you first need to determine how much you need to make per week to survive and remain in business. Here are some sample figures for a middle of the range, mid 20’s technician. Adjust accordingly for your own situation:

Necessities to live (per week):
Rent: $170
Food: $50
Utilities: $50
Petrol: $60

Business:
Internet: $21
Advertising: $90
Business Insurance: $8

With these stats, we would need to earn $449 per week, or $64 per day to cover these costs. If I was only to count weekdays (since many of us don’t work weekends) we would need to earn $89.80 per day to survive.

These are just basic figures and everyone’s situation is different. If you are young and still living at home, you may not have any rent so you can survive and increase your client base with lower prices. Here are some other expenses you might want to include in your list if you have them:

  • Mobile Phones and Telecom services such as call waiting, voicemail etc..
  • Interest/Debt on credit cards
  • Industry magazines/subscriptions
  • Memberships (local commerce cambers, BNI, Yellow Tie etc..)

So now that you know how much you need to break even, you need to charge a little more so you can grow your business. To do this, work out how many repair jobs you currently get per week (or expect to have if you are just starting out).
For examples sake, lets say we get an average of 2 inhouse format jobs, 5 onsite jobs and a hardware sale per week. Assuming we are going to charge $60 per hour we would have these figures:

$120 per format x 2 = $240
$60 per hour for the onsites with an average of 1.5 hours each = $450
Wireless router/usb dongle = $120

If we charged $60 per hour, we would make $810 per week with this amount of work. We now need to subtract our expenses of $449 per week leaving us with a total of $361 profit per week.

$361 per week is ok for someone just starting out, but to live comfortably (depending where you live of course) you would want to make at least $700 per week profit.

If you are a beginner, break out your own calculator and find out how much you need to charge to break even. If you are an advanced technician, you can use these tips to find out if what you are currently charging is enough.