How to Increase Your Profits

by Alan Dodson

Want to get a bunch of Mobile DJs upset with you and each other? Go onto one of the chat boards or Facebook Groups and start talking about Rates and Full Time vs. Part Time!

This discussion has gone on for years in many ways and in many locations, and there are no right or wrong answers. We are blessed to live in a free market society where we can charge whatever we want to for our services.

I have said many times, I don’t fault someone for charging less than me; after all, they are the ones who know what they are worth!

All businesses are faced with the challenge of increasing income without increasing expenses; it makes no difference if you are a DJ, Venue, Photographer or other small business owner.

There are ONLY three ways to increase income:

  1. Get more new clients (do more jobs)
  2. Increase the net profit of each sale made to clients (raise your prices)
  3. Increase the frequency that clients buy from you (do more jobs)

From these three, the quickest way to guarantee an immediate increase in income is to raise your prices; however, many mobile DJs resist doing this. Instead, they chase after prospects thinking that having more clients will somehow provide a miracle cure. It will not!

Here’s something to consider: If the prices that you are currently charging aren’t high enough, what will having more events do for you?

Remember, what you are selling is your time, so what’s the fun in ending up burned-out and exhausted? This is especially important if you are a part-time operator because you have demands on your time with your “day job.”

There are only so many hours in each day, and only so many weekends per year, you cannot just “purchase more inventory” your inventory is your time and it is finite and defined!

Evaluate your prices and decide if you are charging enough

Ask yourself these questions:

  • Are you receiving an income commensurate with your skills, knowledge and experience?
  • Is your current income meeting ALL the costs of running your business including the time and money spent on personal development and training? (Are you getting additional training?)
  • Are your rates generating enough profit to invest in your business and allow it to grow in services and quality?
  • How many clients have you lost because they told you your rates were too high?

What did you learn? Most who answer these questions honestly, will discover that they are undercharging…and if so, are you willing to do what is necessary to fix the problem?

“I don’t have enough clients at my current prices, so why should I raise them?” I have heard this MANY times, but here is what happens. Most people think that low prices equal more sales, when in reality, the reverse is true. Follow me on this…

Major companies have factored marketing into their costs and prices. Their prices ensure that they have enough to invest in marketing. Do you do the same?

I have learned that when a DJ business raises its rates, something very interesting happens; a pattern develops, and they attract new clients and clients. I’ve seen this over and over again and I think there are two main reasons:

  1. When you raise your rates, it is an act of self-value. You are saying, “I know that I am worth more than I have been charging.” When you value yourself, potential clients starts to value you too. It always happens in that order. You cannot wait for the world to value you, it is something you have to do for yourself!
  2. Price makes a statement about the quality of what you are selling. If your price is too low, people may think that your service lacks quality – even if it doesn’t!

What about raising my rates for my current clients?

I am sure that there are some clients who are with you right now just because of your price, but they are probably in the minority. The clients who truly value your services will be willing to pay a rate that reflects your skills and experience.

I know from personal experience that raising your rates works to increase your income. When I dramatically increased my rates, my wife thought I was crazy, but when she saw the number of weddings and my profits increase, she was then sold on the idea.

How do I raise my rates and what should I charge?

First, you need to raise your rates like taking off a band-aid, just do it, all at once! It is much less painful that way, but you must have the skills and desire to deliver true value to your clients. It is imperative that you attend additional training seminars, get education in public speaking, take workshops and go to Toastmasters and make yourself better.

You also need to decide how much money you need to make from your business, and use that as a basis to calculate your rate. If you are a part-time operator, (nothing wrong with that, I did it for 25 years), and you suddenly lost your “day job” could you maintain your standard of living with the rates you currently charge? If not, raise your rates!

Stop worrying about what “the other guy” is charging! Stop it now! He or she is not YOU, and you only have to worry about YOU! If you consider yourself to be at the top of your game, that is, in the top 5% of quality entertainers in your area, you should be charging three to five times the “average” price of the other DJs in your market.

So, fix the problem now that you know how!

NOTE FROM PUBLISHER: DJ Alan Dodson will be doing a 6 hour workshop in Johnson City, TN on June 23, 2011 the day after the ARMDJ Symposium. The Facebook event link is http://on.fb.me/kA4ukx and the cost is only $25 per person with lunch included. Limited seating available.

Alan Dodson – Wedding Wizard

Alan Dodson is the Entertainment Director of An Unforgettable Event (ThoseWeddingPeople.com), and has been entertaining at and producing events since the early 1970’s. He has also worked as a voice talent on radio and television, nationwide.

Alan specializes in weddings, and is a co-producer of the Tri Cities Bridal Show (tricitiesbridalshow.com) as well as producer of bi-monthly workshops for grooms (aPerfectGroom.com).

He has written numerous articles for business and trade magazines, and has been a speaker on implementing social media into wedding DJ businesses. Alan is a founding officer of the E. TN Chapter of the ADJA (adja.org/chapters/etenn), where he now serves as President. He maintains an informational wedding blog on his website (TopDiscJockey.com).

Alan can be reached by email at alan@topdiscjockey.com.

%d bloggers like this: