Sorry for the rant, but it is 5 AM at my place, and I just have no one to share my experience with. And even if it were a more "godly" time, still, no one to share this with, as I do not have lots of entrepreneurs in my circle.
So I have had my small Rope access business I keep developing for 2 years now. For the most part, we were having large systemic clients. Nice guys, long pipelines, medium-low prices (460 USD per day of work tops).
From January this year, we started to move to more private jobs. We in my company believe private rope access markets are untapped here in Israel - most "companies" here are 1-2 man operations and can`t handle the hustle. We are a 6-man group, and we can.
So I have been tasked with the sales part. Bought myself a drone, leased a nice little car, and got to work. Paid ads, free ads, site visits.
And right now I sit on a deal. Not some super-duper deal, a regular one. Approximately 3 days of work for a team of two (a rope tech and an unskilled helper). For the sake of security, let us make it 4 days. In corp rates, it will be 2265 USD. Put materials in there, and we come to 2600 USD. And that is what I will pay as a company, given my people's salaries and materials costs.
The client, a middle-aged couple who just bought a 100-year-old apartment at a steal of a price and are renovating it by their own hands, stated they have "only" 5000 USD budget for this. Good. Almost 50% profits. A steal of a deal for any rope access team in the field. But can we do better?
According to Alex Hormozi, anything you sell has 4 components that defines it`s value to the customer. Two positive ones and two negative ones. When you increase the positives and decrease the negatives you prices rise. The positives are "expected result" and "perceived likelihood of achievement". Negatives are "time delay" and "hardship on the client side". Can we do something here?
Well, actually a few.
We can increase the perceived likelihood of achievement by providing guarantees.
We can decrease the time delay by timing the job with their own repair efforts.
And we can decrease the hardship for the client by providing financing options and by splitting the work in chunks.
Results? Client agreed on my proposed 7700 USD price with 3600 USD immediate payment and the rest split into 4 months. My costs (2600 USD) are covered, I get some profit right away, and my margins go way higher. I got some risks, yes, and a time delay. But in the end, we are in the greenest greens. Same product. Same client. 1.5x the price. 2x the profit.
Morning rant finished.
So I have had my small Rope access business I keep developing for 2 years now. For the most part, we were having large systemic clients. Nice guys, long pipelines, medium-low prices (460 USD per day of work tops).
From January this year, we started to move to more private jobs. We in my company believe private rope access markets are untapped here in Israel - most "companies" here are 1-2 man operations and can`t handle the hustle. We are a 6-man group, and we can.
So I have been tasked with the sales part. Bought myself a drone, leased a nice little car, and got to work. Paid ads, free ads, site visits.
And right now I sit on a deal. Not some super-duper deal, a regular one. Approximately 3 days of work for a team of two (a rope tech and an unskilled helper). For the sake of security, let us make it 4 days. In corp rates, it will be 2265 USD. Put materials in there, and we come to 2600 USD. And that is what I will pay as a company, given my people's salaries and materials costs.
The client, a middle-aged couple who just bought a 100-year-old apartment at a steal of a price and are renovating it by their own hands, stated they have "only" 5000 USD budget for this. Good. Almost 50% profits. A steal of a deal for any rope access team in the field. But can we do better?
According to Alex Hormozi, anything you sell has 4 components that defines it`s value to the customer. Two positive ones and two negative ones. When you increase the positives and decrease the negatives you prices rise. The positives are "expected result" and "perceived likelihood of achievement". Negatives are "time delay" and "hardship on the client side". Can we do something here?
Well, actually a few.
We can increase the perceived likelihood of achievement by providing guarantees.
We can decrease the time delay by timing the job with their own repair efforts.
And we can decrease the hardship for the client by providing financing options and by splitting the work in chunks.
Results? Client agreed on my proposed 7700 USD price with 3600 USD immediate payment and the rest split into 4 months. My costs (2600 USD) are covered, I get some profit right away, and my margins go way higher. I got some risks, yes, and a time delay. But in the end, we are in the greenest greens. Same product. Same client. 1.5x the price. 2x the profit.
Morning rant finished.
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