Re:How I can charge so much
by nostrademons on Wednesday September 26, 2007 @11:48PM
(#60160)
There's math behind the "If half the people don't say 'fuck you', you're charging too little" principle. If you double your prices, you're taking in twice as much revenue. You can afford to lose half your customers, and you'll still be making the same amount. However, you'll spend half as much energy doing so.
It's more striking if you have overhead. Say you charge $5000 for some job, but have expenses of $4000 for it. If you double your prices, you now make $10K, but your expenses remain constant at $4K. Your profit has gone from $1K to $6K. You could afford to lose 5/6 of your customers and still break even.
My mom charges $80/hour for elementary-school tutoring, up about $10-15/hr from when she started tutoring. None of her clients have ever blinked at a price increase. I know 20-somethings who tutor high-school math and make over $100/hr.
It's more striking if you have overhead. Say you charge $5000 for some job, but have expenses of $4000 for it. If you double your prices, you now make $10K, but your expenses remain constant at $4K. Your profit has gone from $1K to $6K. You could afford to lose 5/6 of your customers and still break even.
My mom charges $80/hour for elementary-school tutoring, up about $10-15/hr from when she started tutoring. None of her clients have ever blinked at a price increase. I know 20-somethings who tutor high-school math and make over $100/hr.