So, how do we attract new business, appear to offer a good value to the public who needs the services that we provide, and still be competitive with our price?
This is a big balancing act and one that can mean the difference between making a good business and finding it harder to generate the revenue that it takes to be viable.
It doesn't matter whether we are installing durable medical equipment, doing minor repairs, making a major renovation, or completing an evaluation or assessment, there are and will be companies and individuals that can underbid us. It doesn't matter what we charge or how reasonable it might seem to us. There's always someone who can come along and use a lower quality material, do the job less well, do it for a smaller margin (less profit), or not have the skill set to approach and complete the job as well as it should be done.
We need to accept that we can't compete with everyone. There are going to be people who land bigger dollar jobs and those who just charge more for their services. Of course, someone is always able to underbid us and may even lose money on the deal. The key is to find a business model that works for us and then to stay true to it.
Then, we need to make sure that we bid the job or construct the scope of services as carefully as possible - including all of the necessary items. It's much easier to explain a high bid that includes more than anyone else than to apologize for leaving something out and then needing to raise the price to make up for it.
Something that is normally included in a job of a certain magnitude or in a bid for services - that is left out, for whatever reason - results in a seemingly lower price, but only until the client realizes that the bid they received didn't include all of the items they thought they were getting. Then the bidder looks careless, misleading, or inexperienced.
It's also true that when we suggest bids lower than what most of our competition charges, we might gain the attention of the consumer but find it difficult to live with. We might find that we are getting so many requests for business - requests based primarily on charging less than nearly everyone else - that we literally can't get to all of them. The pitfalls of charging too little are just as real as charging too much and suffering from a lack of business.
We should identify a pricing strategy - based on what the market is generally experiencing as well as what we need to cover our expenses and make a reasonable profit - that we can live with. We don't need to be the lowest in the market, and being the highest can run off potential business. Look for an amount that is close to what we deem to be our most serious competition, and evaluate how well we can live with that.
It's true that people enjoy a good bargain, but they also appreciate quality. Charging an amount for our services less than anyone is likely not necessary or good business. Find something that is neither the lowest or the highest.