Saturday, November 24, 2007


What a mirage the last two weeks have been! As mentioned in my previous blog, work was meant to be cooling down. Little did I know the following week would be another packed week and this past week would be a psychological rollercoaster.

One of the looming sticking points has been a renegotiation of my hourly charge due to the inclusion of GST and the re-writing of the contracts that required. I thought this would have been an easy process but one of the clients baulked at any movement in price and I didn't want to charge one more than the other. To not move the price means a pay cut of 12.5% upon getting registered. Knowledge was the key here when I discovered companies claim back the GST tax on their expenses (from GST registered companies) so any price rise would be superficial and they'd still effectively be paying the pre-tax amount. Upon this discovery, I finally got some resolution and now the contract re-writing has lost its trickiest element.

With all the discussions prior to that discovery came a pretty useful question to address any rise in the charge: What is the real market price for my services?
It was a genuine question but also a tool for this person to negotiate; it is the market that dictates the price and not whether you suddenly want to include the tax - if my pre-tax price was the market price, then the price won't rise just because of my need to include GST! I couldn't give a market price because I have had no contact with others in my employment niche; we are more or less lone wolves. Even if knew someone similar to me, price information would hardly be what you'd share without a lot of assurance you wouldn't be competing for a future clients. He said he'd 'call around' to see if he could find a market price. Later on he called me over and mentioned that he'd done a bit of research and said that my price was far over the market price. Surprised I pressed him for which companies he was making his comparisons: sit-down group classes, mostly in the city. I thought that was rather sneaky. It was to compare my service with something that does not have any of my competitive advantages: namely, its on their site (so no time wasted in transportation), its one-to-one (meaning student's weaknesses are dealt with through a personal curriculum and not a generalised one that may not deal with the needs of a student) and it is flexible to the student's schedule so they are not paying for lessons which they cannot go to due to workload or urgent meetings.

The shock to the end of this story was a sudden indication that my charge may be below the market price. Another company has been looking for someone similar to me in Wellington. They found one but found the charge to be too steep! They'd rather fly me down to Wellington to do their English tuition there for two days! Since they'd be paying for a flight and accommodation (probably discounted but still significant when compared to my charge), I can only assume my price is very competitive. Currently though, that plan is not actually possible due to my other commitments although I would like to negotiate a compromise. The Wellington work would be excellent if it could be done in a single day - the question is if that is really feasible. And that is what I will be finding out.

One thing is for sure though, next week will certainly be quieter on the teaching front - but there is still a lot to do. With the lead in to my vacation I'd like to get things straight. Not having things straight in my head and too many ideas floating around is not conducive to good sleep, I've found.


James said...

That's a really interesting story. I would have liked to have been there when you discussed the advantages of your service compared to the other ones that the guy researched.

Coming up with a "market" price is definitely an art. Especially, when you have a niche service.

jo said...

You can't beat Wellington on a good day. Like today. :-) Sounds like an opportunity to visit your sister in the capital if ever I heard one. :-)