Your minimum charge should be what you are happy and confident to charge. It should never be based on your competitors!
I Focus on a marketing strategy over price and guess what... i'm not a commodity to my "target market"... If I get a customer who shops purely on price, there not a client I want and therefore not part of my target market.
I find this topic interesting...
Someone charges $10 minimum, $35 minimum, or $45 minimum... it's all for the "similar" type of work and time. What makes the difference? just one thing... the business owner. Do you think there is someone in our industry with a $100 minimum? I can almost guarantee there is somewhere!
As most know, i target a very small radius of 2 very close suburbs... lately, i've been targeting "other" suburbs that are around 5K's away... I have the attitude that i don't need the work and as i have to travel I will charge "X" amount more for the inconvienience. Well, my findings are I am still converting the same amount as if i was doing a compariable size block in my target area (but charge more).
I will use the car market example ... There is a market for Hyundai, BMW and Ferrari - There is a reason why a hyundai is $20,000, BMW $80,000 and Ferrari $500,000
Although hyundai is "most likely" selling the most cars... Is this a good position in the marketplace? More cars to produce for less profit....
You might even ask... how does BMW sell so many cars at 4 x the cost? Well, I can inform you it isn't based on PRICE... do some market research, identify niche markets, work out how they attract buyers to pay a premium and not be a commodity and apply it to your business.
Why is it risky being Hyundai? because they are based on price and the "majority" are competing in this marketplace... guess what, there is Chery that now produce a $10K car... now that's low balling
On a side note - Holden reported today that they are reporting a loss of $153 million...
Another example is Franklins, Aldi, Coles and Woolworths... all provide food but all priced differently! Woolworths is the most expensive but have the largest market share... that must be luck! lol
Position your business and focus solely on your business model... Do this and the economy, your prices, your competition will become irrelevant.
You want another example... why can Coca Cola charge almost double the price over Pepsi and Coke still sells more cola!
If you want more examples let me know!!! but it willl be a long report!
Price is irrelevant to a smart business model that focuses on marketing!
I am lucky that I came to the realisation at an early age and I fully embrace and understand the princible... "there is no money in what you do, all the money is in the marketing"
Come on.... shoot me down
Simmo.