Price listRack rates, price lists, standard charges, day rates, hourly rates.

You’ll no doubt recognise these terms. Every business needs one or more of them to ensure that work carried out is profitable. It also creates a uniformity that clients respect when various parts of the business are asked to price a service and they align.

But what about those times when work becomes available but it is below the standard price list? Should it automatically be dismissed? Should time be taken to assess the profitability before taking it on? These are good questions to ask. And they will reveal good answers.

Most of the companies we speak to would most likely dismiss them on the basis that:

  • Service levels become variable dependent on the price
  • It sets a precedent
  • Profits are impacted adversely
  • The potential client does not get the value proposition

There are probably more. They do however miss one very key ingredient to the mix. That time is perishable. Once gone, it cannot be recovered.

Our argument therefore is to take every piece of work offered, so long as it obeys these critical rules:

  • It is above the costs for doing the work – never make a loss
  • The client is made aware that service levels will not be the same as the full fat version – get this in writing and stick to it
  • It is a one-off (but it could of course be repeated in the future, at your discretion)
  • Insert the full price on the invoice and then discount it to the agreed price – you will then show the true value of your full fat proposition.

We all want to be famous for something and get paid accordingly. For those times when we are asked to sacrifice profit for perishable time, then our view is go for it but with the above rules in mind. Time cannot be reclaimed, so every minute you aren’t getting paid for is money you won’t ever see.