Start a Bookkeeping Business - Tips to Work Out Your Rate

By Julia Nitschke

It is important to establish what your charge out rates are before you actively market to prospective clients. If you are in a meeting with a prospective client you need to know exactly what you will charge per hour or will you bill a fixed amount per month or quarter.

You can do some research to ascertain what other bookkeeping services are charging for their services by making a few phone calls. This will help you determine what is going on in the market, but it may not reflect what you wish to charge as your fees. Your charge out rate will be specific to your requirements, how much you want to work, how much money you wish to earn. Now that you have other considerations like public indemnity insurance and professional memberships, the original rate you thought about may not cover these additional expenses.

You can easily work out your charge out rate by taking the income you want to earn each month (or whatever period you choose) after business expenses and divide that by the number of hours you want to work in that same period. Remember to be realistic, 40 hours per week every week of the year may not be sustainable and 10 hours a week may not meet your income expectations. Once you have done this exercise, this will give you a charge out rate. Now compare that to what others in the industry are charging, are they similar, are they more expensive or is it less than others charge?

If your rate has come out exceptionally different to others, why is it? Are you marketing yourself way above the average? Are you short selling yourself by estimating a rate way under what others charge? You dot have to charge what other people charge as I am sure there will be a huge difference. Some people charge $25 per hour; some charge $80 per hour. Thats a big difference in rate, but the key here is, what value you can create for your clients. What do you do differently to deserve the additional rate?

If you have a good idea of how you will create value for your clients and why your rate is a certain dollar value, it will be easier to discuss this at the meeting stage with a potential client. If you have included your rate in initial phone calls or on your web site, it is easier to discuss your rates as you have pre-qualified the potential client and you know your rate must be in their budget vicinity as they have requested a meeting.

Remember you are running a business and have certain services on offer for a fee. You have to cover your costs and make it worth your while to offer the service. There will always be people, who want the cheapest service, but there are other who are prepared to pay top dollar for quality and there will be clients in between.

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About the Author

Julia Nitschke is an Accountant, business consultant and author of the book My Bookkeeping Business, how to Start, Run and Grow your Bookkeeping Business. Visit http://www.mybookkeepingbusiness.info for more information and for a free bookkeeping e-course

Source: http://artipot.com