Back on July 13th, Jason Rubio wrote a post entitled “How Much Should I Charge For DJ Services?” While agree with everything Jason has to say—especially with regard to how price chopping hurts everyone—here some additional things to consider in setting your prices.
First off, what is your cost of doing business?
If you are a single operator working out of a home office, your expenses will be far less than a multi-op who needs a store front with storage and meeting space. That’s one of the benefits that comes with being a single operator. But when you look at the big picture, you will need to make more per job than the multis, and that will have an effect on how you market your DJ service.
Consider the cost of your gear.
If you want to be competitive, you can’t skimp on sound. As a rule of thumb, you want to recover the cost of your initial system in 10 jobs, and then set aside 10% (or more) from each job thereafter for future purchases.
To get the sound you need for a typical wedding of 125-150, you’ll need at least 2 15″ 2-way powered loudspeakers, maybe a subwoofer, a DJ mixer and/or computer interface, a reliable laptop, microphones, cabling and possibly some processing gear, so it’s pretty easy to spend over three grand—and you still need a music library. Music is not free. Assuming you are taking the professional route, you need to accept it as another cost of doing business.
Next, transportation costs.
For 2016, The IRS standard mileage rate for business is .54 a mile – so use that in calculating your average cost for getting to a job and back. If you purchased a vehicle specifically for your DJ business, you’ll need to divide your monthly payment by 4.3 (average weeks in month) so you can include that in what you need to charge. Do the same with advertising and marketing expenses. Everything you put into your business inevitably gets passed on to the customer. Much of this will be deductible on your taxes at the end of the year, but it still needs to be considered.
Once you have listed all your costs of being in business, you’ll have a much better idea of what you need to charge to stay in business and be profitable.
At this point, go back to Jason’s post and read his tips on how to set your rates so that they are comparable with others in your area. He’s provided a link to a very helpful website that actually shows what is being spent on weddings in your area.
Keep in mind that as a single operator, you’ll need to focus your marketing on the higher end weddings, so that you can charge what you need to cover your expenses and show a profit.
Multi-service owners, on the other hand, will often target their marketing closer to median price range in order to cover their expenses and keep all their DJs employed.
While it’s always a temptation to try to price compete with services charging less, knowing what you have invested in your business can help you better define where to draw the line when you say “Sorry, I simply can’t do the job for that price.”
Filed Under: Business, Exclusive Online News and Content, Robert Lindquist, Sales & Marketing, Weddings
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