Realized I was underpricing my services for 3 years after a client told me straight up

I run a small cleaning business here in Detroit, mostly commercial offices. For the longest time I charged by the hour, thinking that was standard and fair. Then last month a new client who owns a chain of coffee shops said my quote seemed low and asked how I calculated it. I told him my hourly rate and he just laughed. He said I should be charging per square foot like most commercial cleaners do, and showed me a competitor's bid that was almost double mine. That conversation tipped me off that I had been leaving money on the table this whole time. I spent the next week recalculating all my pricing for existing clients and raised rates on new ones. Has anyone else had a client basically tell you that you were charging too little and how did you handle the change?

2 comments

2 Comments

ramirez.sage26d ago

Man that's a rough way to find out but I'm glad you caught it. I had a similar thing happen when I started doing side work hauling junk, a guy flat out told me my dump fees were built into what people pay him and I was basically giving my labor away for free. I had to go back and bump my rates on repeat customers which felt awkward but most of them understood when I explained I was covering costs properly now.

matthewh2826d ago

Did you ever feel like you were being "the smart one" by keeping your rates low and thinking you were being fair to customers? Because I was totally that guy for years. I used to think undercutting everyone was just good business, like I was being the nice guy who wasn't trying to rip people off. But after getting burned a couple times and talking to other guys who've been at it longer, I realized I was just screwing myself over. Now I see that charging what you're actually worth isn't being greedy, it's just making sure you don't go out of business. Your story about the dump fees really drove that home for me, I had the same blind spot with my materials costs.