Hourly rate

[Ward & Probst]

Hello Terry,
Thanks. My philosophy now is that we need to raise our prices regularly until 
we are charging enough to make a profit on our labor. In doing workshops I have 
found that this is the most common problem. I used a chart I got from Hammond 
Organ way back yonder to illustrate this. The essense of the argument is that 
your hourly wage must cover vacation, seminar and sick time as well as FICA, 
income tax (state and federal) AND a reasonable profit margin for the business. 
Early on in the thread there was mention of a phone installation- while the 
charges may seem unreasonable on the surface, I equip an electronic organ 
service business and the costs of doing so add over $20 dollars per hour above 
the basic hourly rate for piano service because of an investment of $30K in 
parts inventory- many of which will never be used. I'm not saying the charges 
are reasonable but I could probably justify the costs from a strictly business 
perspective.
Raising your fee $5 year if your basic charge is $50 is a 10% increase, if you 
charge $100 it is 5% which may not cover inflation some years. If you are 
playing catch up on your rates because you failed to raise for years (mea 
culpa) you have to increase in a what seems like a dramatic fashion 
occasionally. Our last increase was a tad over 17% and made me a bit nervous 
but doesn't seem to have caused our customers any major concerns. Once you get 
them used to the idea that you are in business and this is not a hobby, 
increases are a little easier to manage.
Caveat- you have to convince yourself that you are worth what you charge first. 
Sometimes this is harder than persuading your customers because we all tend to 
be a little skeptical of our own abilities. The best cure I have found for this 
is the continuing education offered at PTG Annual Institute which is why I have 
volunteered for the last several years. Of course, I haven't seen many classes 
lately but being there is an education in itself and working with a talented 
group like the Institute Committee is real good for you. So make all the 
educational offerings you can and you will learn skills that your customers 
will appreciate and compensate you for. We also take volunteers at the 
Institute Committee Office! :>))
I tried the $*9.95 scheme once and it was a bust for me. In Texas there is 
sales tax on piano service unless it is for an exempt institution so I was 
always running over the $*.9.95 price when the tax was added. It does seem that 
$75 is perceived about the same as $70 in our neck of the woods.
As far as how to do it? First step is to get the education- take business as 
well as technical classes at convention. I learned a tremendous amount in 
classes taught by Vivian Brooks, Keith Kopp, Evelyn Smith and others. Once you 
believe that you are worth the raise that you want, go for it and don't look 
back. If the phone quits ringing, pick it up and call someone, restore a piano 
to sell, learn to do polyester and lacquer touchup, the list goes on and on. If 
you decide to try organ service, drop me a line, lots of parts for sale 
here...:>))
Best,
Dale


On Saturday, April 14, 2001 8:11 PM, Farrell [SMTP:mfarrel2@tampabay.rr.com] 
wrote:
> Hi Dale. Great post. I'm thinking about raising my rates. Do you have any
> specific philosophy regarding raising rates? Raise your tuning fee $5 per
> year? Always charge $79.95 or $89.95 - make it look good? Go from $65 to $75
> to $85 - the idea being that $75 feels the same as $70? How did you go about
> more than doubling your rates over the last 11 years?
>
> Terry Farrell
> Piano Tuning & Service
> Tampa, Florida
> mfarrel2@tampabay.rr.com
>