The Pricing Problem That Quietly Kills Profitable Businesses
From No Se Habla Taxes® · 15:29
Show by Melissa Armstrong, CPA
Send Me Your Questions!This time there's no client in the story. It's mine.In my first year of practice, I did what a lot of agency owners do: I ditched hourly billing for flat monthly fees. Good instinct. Bad execution. I set my rates based on gut and, honestly, fear. My pipeline filled up, the calendar got full, and from the outside business looked great. Then I went to hire support and found there was no margin to pay for it. I'd undercharged every single client.In this episode, I walk through the service pricing strategy I wish I'd used from day one. It's the math that shows whether your agency's profit margins are real or whether a full roster is quietly covering up a pricing problem.In this episode:Why hourly billing punishes efficiency and hides unprofitable engagementsWhy switching to flat fees or retainers doesn't fix pricing on its ownThe two numbers you need before you quote anyone: realistic delivery hours and your fully loaded hourly costHow to calculate gross margin per engagement, and why a thin margin means you're running a subsidy, not a client relationshipWhy your underperforming clients are often the ones you love working withHow to build consulting pricing from delivery cost up, with a margin floor and a buffer for scope creepWhy you should revisit pricing on a schedule, not just when something hurtsYour homework: Pick one client or project and track your actual hours on it for the next few weeks. Not your estimate, your real time. I use Rize, which tracks time automatically in the background so I never have to stop and start a timer.Coming January 2027: Show Your Work, a new series on No Se Habla Taxes® . Women in branding, marketing, PR, advertising and podcasting walk us through the work they’re proudest of and the money behind it. Hit follow so you don’t miss it. Want to finally understand your numbers? The No Se Habla Confusion Assessment gives you a clear findings report in 10 business days. It’s $500 through December 31st and goes up to $750 in January. Email [email protected] — subject line: No Se Habla Confusion. Let's connect!LI: https://www.linkedin.com/in/armstrongmelissacpa/Website: https://steadyhandaccounting.com/
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