What are Your Services Worth?

Determining how to value what you do can be tricky. But think about the value – not from your perspective, but from that of your client. It can help clarify the value, and often you get a much better answer.

By Robert H. Alexander, CPA/ABV/CFF, ASA

Some people don’t understand what their services are worth. Not all people, but there are plenty.

We have an in-ground irrigation system in our yard. Some of the sprinklers had gotten out of whack and were watering the driveway instead of the yard. We also have many potted plants that have individual watering devices that come off of the irrigation system. These require maintenance from time to time. We also had certain plants that didn’t appear to be getting enough water.

We have been using the same gentlemen for several years. He works on his own and can solve any problem that ever comes up with the system. He came at 8 a.m. on a Saturday and warned us that he had a bad cold, but not COVID. After 30 minutes, he fixed the problems with the misdirected sprinklers and the potted plant watering gizmos. He also diagnosed the problem of the plants that were not getting enough water. Not only could he fix the sprinkler system, but he knew about the plants in the yard too. It turns out the annuals needed daily water, but the perennials were fine with water every other day. So he adjusted the system to accommodate that.

I asked him how much we owed him, and he said $35. So, he had come out on a Saturday morning with a bad cold, fixed an irrigation system, diagnosed different types of plants that needed different amounts of water, and fixed that too. He did all this and wanted $35.

His thought process was probably something like this. “I charge $50 an hour for work like this. How much time did I spend? I didn’t need any parts — so all I put into this was 30 to 40 minutes, and it was an easy fix.” Add it all up, and you get $35.

Let me propose an alternative way of thinking about pricing your services. “I have a good relationship with these homeowners and want to keep that. They have a nice house – not a mansion, but it’s nice and well kept. Their yard is attractively landscaped; they have invested untold dollars getting it this way. They spent several thousand dollars on the irrigation system. They could have fixed it themselves but probably didn’t know-how. What is it worth to them to keep the system operating correctly? My work kept several potted plants from dying, and I knew enough about plants to make adjustments to the system to keep them looking great. And most of my competitors don’t know about the differences in plants. So what was this fix worth to my clients?” Add it all up, and you get $150.

We would never have batted an eye. Look at your pricing through the eyes of your clients, and you can often double or triple what you are charging. That isn’t cheating. It is charging what your service is worth.