Money Matters

Most of us are dog lovers first, trainers second, and business men and women dead last. A number of challenges arise from this reality, including a pervasive sense of guilt about charging money for what we do. This guilt is then alleviated with chronic undercharging, the result of which is an income level that keeps many trainers in perpetual hobby or part-time status, drives others back to “real jobs,” or creates long-term financial strain for those managing to train full time.

It doesn’t have to be this way. Charging what you’re worth—and you are worth it—is a win for you and for the dogs.

Getting Over the Guilt
Trainers hold an invaluable and specialized skill and knowledge set. If you’re reading this you most likely have spent time and money attending a school for dog trainers and have used innumerable hours practicing your craft on your own and with the guidance of mentors and colleagues. You’ve probably attended a long list of seminars, conferences, and workshops, and have read and watched every book and DVD you could get your hands on. Many of you have studied for and taken certification exams as well. Because although you may love your work well enough to enjoy it whether or not it’s paid, it’s still work—highly skilled work that requires a good deal of study and practice.

Training is also work that helps people and their dogs. You have the capacity to change the lives of the clients and canines you work with. Surely this is worth paying for. And though everyone loves to get something for free, we don’t generally expect free professional services. If training is to become a full-fledged profession we need to keep this in mind. Also important to remember is that people value what they pay for, and generally in our culture we value more that which costs more. During my time as Director of Behavior & Training at the San Francisco SPCA we raised our adoption rates, to the dismay of many who predicted adoption rates would fall. They didn’t. What did drop off was returns. Many trainers experience a similar phenomenon when they raise their rates—not only does business not go down, it often goes up (because committed owners want the best) and so does client compliance. Clients who have paid more for a service are more likely to try to get the most from it.

There’s another reason to leave the guilt behind. Financial stress and underpayment are major components of trainer burn-out and business failure. And every talented, skilled, compassionate trainer who quits due to exhaustion or the need to take a job with a paycheck means owners and dogs who will never experience the benefit of her services. The longer you stay in the game the more dogs and people you can help. To stay in the game you need a successful business. And to have a successful business you need to charge what you’re worth.

Setting Your Rates
Trainers often look at what others charge when setting their own rates. While it’s important to know what the trends in your area are, you shouldn’t feel compelled to do exactly what everyone else does. Here are several additional considerations:

Take into account your services—how is what you are doing different, what sort of niche are you filling, what do you offer that others don’t? What are the demographics in your area—the socioeconomic levels, average incomes, kinds of work most commonly done? Factor in also your needs, both financial and psychological. What do you need to earn for your business to provide a solid, safe living? What hourly rate makes you feel professional, makes you feel you’re being truly compensated for your skills?

As a final and central factor, recognize that your rates are part of your marketing plan and that rates carry subtle messages about you and your business. If, for example, part of your image is that you are the local go-to expert (whether you already are or would like to be!) having lower rates than your local colleagues will undermine that message. Again, Americans tend to equate cost with value. Pricing yourself low sends a message of not being as good as others whose rates are higher. There’s often a belief that lower prices will lead to higher volume. For plastic goods this may be so, but in professional fields this approach can backfire. First of all, you’ll see more bargain hunting clients rather than those looking for the best possible service for their dog, and if you’ve been training for any length of time, you know the difference this can mean in terms of owner compliance and commitment. Secondly, training is not a volume field. You can only train so many hours per week, you can only accommodate a finite number of clients at a time. Given this, volume is not the key to success. Instead, you want to get the most revenue possible from your billable hours.

If you offer packages (which I do hope you do—see “Win With Packages,” another article in this category), you probably offer discounted rates for larger numbers of sessions. Keep two things in mind when structuring your pricing. One, the savings don’t have to be large to be effective. Five to ten dollars per hour is plenty to help clients feel like they’re getting a good break. And second, be sure to price yourself so that your lowest rate is what you actually want to be paid per hour. For example, if you want to make $100 per training hour, you might set your rate at $110 and offer discounted packages based on $105 and $100. If you want to make $100 but offer discounts at $95 and $90, you’ll be making less than you wanted.

If You Still Feel Guilty…
I may have convinced you it makes sense to charge what you’re worth. Does this mean trainers should avail themselves only to the wealthy? Absolutely not. It does mean you should be able to make a living. Families of average means who take their responsibility to their animals seriously will choose a trainer based on an impression of their effectiveness and professionalism. A large part of this impression will be made by your marketing, and pricing is one part of that.

Still, for many trainers a business plan that prices you higher will exclude populations you wish to serve by putting your services out of their range. If this is the case, there are several ways to make yourself more widely available. You might, for example, offer regular Ask the Trainer volunteer hours to a local shelter. Though you will not be able in most cases to offer a full training plan, this triage focused on management can help to take the edge off many situations. If you prefer a more hands-on approach, try providing a shelter or rescue group pro bono case time. Just be sure to put boundaries around this work, for example specifying the number of clients you can handle at a time. It’s best to do pro bono work through another agency to keep it from impacting your business. A reputation for taking on unpaid cases can make it difficult to get paid ones.

Sales Anxiety?
If you’re one of the rare trainers who feels no guilt charging for your very needed and valuable services, or if I’ve convinced you to give up that bad habit, perhaps you suffer from sales anxiety. You know you’re worth it, but how do you ask for it? How do you communicate your services and their worth to potential clients? And how do you answer that dreaded question: “What do you charge?” Not to worry—read “Making the Sale,” another article in this category.

 

Want some help or guidance setting your rates? Join us for Money Matters 101: Pricing, Policies, & Packages.

In our consulting work we’ve noticed dog pros share a nearly universal fear of raising rates. If you’ve put a rate increase off, worried your clients will leave you in a mass exodus, this article is for you.

Why Raise Your Rates?

To make a living. Our job at dogbiz is to help people make a living doing what they love. Too often we see new clients whose rates will never provide that living. Many factors go into setting rates. One critical factor that’s generally overlooked is what the dog pro actually needs to live on. If you don’t set your business up to make what you need, you’re not likely to stay in business.

To get the right clients. You may think keeping your rates low will make it easier to get clients, but the exact opposite is true. Low rates will only attract bargain hunters, and they rarely make long term, loyal clients. The clients you really want—the ones who are serious about their dogs and have money to spend on them—are looking for the best dog daycare, walker, or trainer, not the cheapest. If your rates are low, they’ll assume you’re not top notch and look elsewhere.

Because you’re worth it. You have to believe this. Confidence breeds confidence. Setting a strong rate and standing firm behind it can help convince prospective clients you’re the one for them. And besides that, you are worth it. You aren’t selling cheap plastic items or hawking knives door-to-door. The services you provide to dogs and their people improve the quality of life for both.

When To Raise Your Rates?

When the numbers don’t add up. If you’ve avoided doing the math, it’s time to take a deep breath and grab a calculator. What do you need to live on? What is your business making? What is your business’ potential? You can keep the math simple:

1. Start by figuring out how many dogs you can serve per week. (How many dogs will fit in your daycare? How many private training sessions or classes can you comfortably and sustainably fit into your schedule? How many pet sits can you manage?) Multiply that number by the rate you charge for that service. That’s your top potential gross earning. Now multiply that number by .75 to get to your gross income running at 75%– that’s a safer number to work with.
2. Add up all your business expenses. Subtract these from your 75% number from step 1.
3. Estimate your taxes and subtract these from the number you get in step 2. (A quick call to an accountant can give you a ballpark formula for your taxes. We recommend www.dog-pro-cpa.com.)
4. Compare the number from step 3 to what you need to live on. How does it add up? Can your business as currently set up provide what you need?

If the answer is no, look at raising your rates. What would you need to charge to cover your personal living needs? (If that number isn’t a feasible rate to charge, it may also be time to consider additional services or other service approaches to make the math work.)

When you’re behind. We recommend reviewing other rates in your area yearly to keep a thumb on the going rates. If you aren’t charging at or near the top rate in your area, but are offering top notch services, it’s time to step up.

When you’re busy. Business bustling? Have a waitlist? Turning people away or referring them to colleagues? It’s absolutely time to raise rates, no doubt about it. You’re popular. People love you. There are potential clients standing in line to get access to you. They’ll be willing to pay more.

When you haven’t for a while. It’s important to review your rates yearly, and raise them periodically. Avoid falling behind. A small rate increase every year or two is much easier to orchestrate than a large one every five years.

How To Raise Your Rates?

Write a letter. Craft a letter for your clients announcing and explaining your rate increase. A written letter is best if you can, as it’s a nice personal touch and gives people time to digest the information before they respond. Don’t over-apologize about the increase—that only encourages people to be upset. The tone of your letter should be even, warm, and confident. Put a marketing spin on your rate hike—how does the increase actually benefit your clients, what does it allow you to do for them? Does it help protect your ability to maintain small daycare or walking groups, the very reason your clients chose you? Keep class sizes small? Allow you to continue boarding dogs in your home environment a few at a time for maximum attention to each? Help your clients understand the reason for the increase and they are much more likely to be understanding.

Give clients time to digest. Provide a grace period between announcing the rate increase and putting it into effect. We recommend a two-month minimum before clients actually see a difference in their bill. If you’re facing down a large increase, implement it over time. For example, a $5 increase in an ongoing service like daycare or walking can be a large pill to swallow. Let clients know about the increase, but explain that it will take place in phases—perhaps a $1 increase in two months, another $2 six months after that, and the final $2 another six months beyond.

Avoid the bad times. Don’t announce rate increases at already financially stressful times of the year, such as the holidays, the New Year (a common time to receive rate increase notices), and tax time. These times may negatively impact clients’ perception of your increase.

Don’t Fret

Every client we have worked with on raising rates worried terribly about losing all her clients in the process—and every client has been thrilled with the results afterward. If you handle the increase well and are increasing rates on committed clients you’ve taken great care of, there will be no mass exodus. In fact, our clients very rarely lose more than two clients, tops. And with everyone else paying more, they generally come out ahead even before replacing the one or two who choose to move on.

Brand loyalty is a powerful thing, especially in an industry like ours. Once someone has forged a relationship with a pet sitter or dog walker or daycare operator, it’s very difficult to imagine trusting their dog to anyone else. You’ve practically become family. You relieve a great deal of stress, worry, and guilt for your clients. They are unlikely to create upheaval in their lives searching for a new dog pro over a $2 rate increase.

So take a look at the rates around you, assess your own, and if warranted, take a deep breath and make the commitment to charge what you’re worth. You deserve it.

We take a deep dive into rates and services in THRIVE! Take a look and see if our group coaching program is for you.

We’ve often written about the need for good policies—and what makes them good. Our advice has included tips on putting solid policies into place, delivering your policies in writing and verbally, and sticking to them—including thinking ahead about what constitutes a reasonable exception and, perhaps more importantly, what does not. We’ve talked about understanding the purpose of policies, too. For example, a cancellation policy that doesn’t keep you from losing money isn’t doing what it’s supposed to. What we haven’t written as much about is how to communicate your policies effectively. Because having a good policy is only the first step—how you present it matters just as much.

So you know you’re supposed to include written policies in your service contract. But how you write your policies can make a world of difference in how clients and potential clients perceive them, and in whether they respect and follow them. A policy statement should include much more than just the meat of the policy itself.

Tell Them Why
Small children pester their parents with a constant barrage of “why?” in an attempt to satiate a growing curiosity about the world. For teenagers, the question takes on a petulant edge, as in “why should I?” or “why do I have to?” At that age, interest turns from curiosity to a deeply held belief in fairness—and a surety that any rules they disagree with are inherently lacking it. I’m not sure we ever fully outgrow this stage. At least it can seem that way watching a grown adult complain about a perfectly reasonable policy and demand, beg, or haggle for an exception.

As small business owners, you know that making those exceptions can make or break you. The first step toward solving this problem is proactively answering the question, “why?” We’re all less likely to question a rule when we understand its purpose and believe it to be reasonable and fair. You have your policies for a reason—make sure your clients know what that reason is.

Spin It
We’re also less likely to question a policy when we perceive it to be in our interest. So put a bit of spin on yours—tell clients how your policy is in their interest. Does it allow small classes? Guarantee their spot in your daycare? Make holiday pet sitting reservations easier? Allow you to take better care of their dog or keep him safe? Your policies are a marketing opportunity to reinforce why clients want you—what makes you different, what aspect of your service drew them in.

Write It Down
Let’s look at some examples.

Here’s a cancellation policy for dog training classes:
No cancellations allowed within two weeks of the start of class.

Here’s the same class cancellation policy, written to include the “why” and the spin:
Because we are dedicated to maintaining small classes with plenty of one-on-one interaction, we are not able to accommodate cancellations. Cancellations with less than two weeks’ notice will not be refunded, so please plan carefully. We appreciate your cooperation to help keep our classes small and effective for you.

Here’s a cancellation policy for private training, this one for day training:
Missed transfer sessions must be rescheduled, and will be charged for.

Here’s the same private training cancellation policy, written to include the “why” and the spin:
Without the critical step of transfer sessions, you will not enjoy the results of the day training done for you. Because our goals are for your dog’s behavior to change for you, and because we want you to see the best possible outcome from training, your attendance at transfer sessions is mandatory; we do not allow cancellations. Missed sessions will be rescheduled and automatically charged to your card. The importance of these sessions to meeting your goals cannot be stressed highly enough. Please schedule them carefully.

Here’s a pick-up/ drop-off policy for dog daycare:
Dogs must be at daycare by –am, and picked up between the hours of –pm and –pm.

Here’s the same pick-up/ drop-off policy, written to include the “why” and the spin:
Our clients value the careful attention we pay the dogs in our care. In order for staff to give their best to your dog, and so that your dog may enjoy a day free from stressful interruptions, we appreciate your respect for our pick-up and drop-off hours. All dogs must be at daycare by –am and picked up between –pm and –pm.

Which of the above statements would you yourself be more likely to respect? Policy statements that incorporate an explanation and marketing spin are much more palatable; clients are less likely to balk at rules when they understand their purpose and benefit. We find it’s rare for clients to complain about or ask for exceptions to policies that are written and verbally explained this way up front. Who doesn’t want smaller classes? Who doesn’t want his dog’s caregiver to place her full attention on his dog’s happiness and safety? Who wants to pay for training and not see results?

There will of course still be occasional teenagers—er, clients—who feel entitled to an exception. But when you understand your policies and the reasoning behind them, it’s also much easier to say no and explain why when they do.

Looking for more help setting successful policies for your dog business?
We’ve got a dogbiz U course for that! Take a look:
Money Matters 101: Pricing, Policies, & Packages