The 7% Solution

When choosing professional products to use in your services, you must find a line that is suitable to maintain a profitable pricing structure, says Bryan Durocher, president of Durocher Enterprises. Compare the cost of the products required to perform the service with how much you are charging. The product cost for each service should amount to no more than approximately 7% of the service price. “You may find some services are at a slightly higher cost ratio, and others come in under the 7%. These slight variations should balance out in the end at the 7% level,” he says. “It does not matter how fantastic a product or line may be if you can’t charge the appropriate price for a service based upon product costs.”