Kitchen Table Publisher

Determining your value

Kitchen Table Publisher Written by Julie A. Zagorski

Deciding what to charge for your specialty services is one of the most frequently asked questions when starting your business. Being competitive in today's market requires knowing exactly what your operating costs are and what your net on your documentation must meet.

One of the first determinations in this process is to compare what the competition is charging. Pose as a potential customer and make some inquiry calls pertinent to your particular service offering. Make a chart of the shops you inquired to track location and the potential cost of operations. Ask the sales person at these shops what paper products they feature and any specialty or add-on service included in your cost. Some shops will seem extremely low in the documentation price quotes, remember that they may be making their profit in other sales therefore lowering their publishing overhead costs. There are numerous workarounds to pricing. The key is to find what works best for you and your clients.

Once you've made the inquiries to the competition, it's time to determine your own cost basis. You probably have determined the product vendors you're purchasing from. If your plan on providing publishing services for the whole product line you will have to determine individual cost of each item. One example is business cards. The common deliverable product is a gross of 500 cards. Let's say that the gross of cards would cost you $10.00. The Paper Company will charge you $8.00 for shipping. Add the cost of the gross of the cards and shipping, plus any additional charges from the Paper Company and divide that total by the total amount of business cards (500). That gives you a base supply cost of .04 cents per card. Now remember, that it takes ink to print, you have to determine the per page cost. Business cards are printed 10 per page on desktop printer stationary. The average inkjet cartridge prints approximately 250 pages. Divide the cost of the cartridge ($25.00) by the amount of product yielded. This gives you the base printing cost for the deliverable product of .01 cent per page. This cost is for only one ink cartridge. If you have a color printer you will have to figure your yield for each print cartridge used. The amount of ink will vary depending on the design of your product, so adjust accordingly. Laser printing is calculated the same.

Now that you have the total amount for the cost per page of business cards you need to determine your operating expenses. Take the average amount of your electrical bill and multiply it by 5%. Next divide the phone usage amount by 31 (days per month). Average the amount of your business equipment to a cost per day. Determine this with the purchase amount divided by 365 days.

If you deliver your finished products determine what your mileage is to that business site and charge mileage multiplied by .31 cents. You could also charge a flat fee of $5.00. If you ship overnight delivery, add in that cost. Consider the rent or mortgage of your dwelling and any monthly supplies you need on a daily basis. Health, liability, and auto insurance is also an expense to average and include. Add these totals together to give you a gross operating expense. Add this expense to the cost of your product deliverables.

The last but most important part is your design work. The estimated amount of time for designing a business card is about one hour. Remember this time varies with graphics, special positioning or text formatting and color design, so adjust accordingly. Estimate your labor charges per hour by your last hourly position. If you earned $15.00 per hour then charge that amount. Just because you are working from your home office does not mean that your labor is worth less. You are still providing a specialty service. While we are on the topic of labor, you may consider charging a consultation fee. You are giving the potential client your time, which is valuable. I wouldn't charge this fee up front but consider adding it into the finished product cost. At the end of the year the IRS will want a share of your profits. Generally 20% of the net profit (after expenses) are estimated to cover tax such as Medicare and Social Security.

You will need to determine the cost as described above for each of the products you plan on presenting. Be prepared for resistance. Some will try to make you think your charging too much for your service. Others will try to haggle with you about price. Stay focused and reinforce to your client that you are a self-employed person with overhead costs, while providing quality service just like any larger professional organization. If you present yourself professionally and provide integrity while dealing with current and potential clients, your confidence level will increase. It will be easier to ask for what you need, and you are worth it.

Developing an incentive for the prospective client will assist in your proposal. Inform them that for repeat business you can offer a 5 to 10 percent discount. You could also provide discounts to the client for referrals that place work orders or contracts with you. The initial sales meeting is the most stressful because both you and the client are building a working relationship. As with any new relationship there is a trust established. When they are secure in your quality of work and professionalism, they will be more likely to open their wallets, not to mention bring a few friends with them next time.

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