We started running monthly surveys on our website to find out about business owners visiting our site and also to understand more about what issues businesses were facing today. Oddly enough, I am not one that usually fills in surveys on websites and usually hit that X to close, but I am very thankful to those that take of their time to provide us quite a bit of insight.
This month I asked a question concerning what was most important when business owners look to purchase business services. Since it was anonymous, we do not know the size or type of business that answers the questions, which would provide more insight. We did add one answer to see how many would select it and that was “I look only to purchase the lowest price services”. Most that answered the survey selected several answers that focused around “looking for client references” and “looking for credentials, experience and backgrounds of those performing the services”, which we would have been expected. There were a few that selected the “lowest cost option”, but what was interesting is that they only chose that option in most cases, without any regard to the others.
Unfortunately we have worked with business owners who opted for the lowest price option from a service provider, but they did not end up paying less in the long run. There were many that paid more, due to substandard work or work that was not performed properly for type of service provider. They ended up paying more because after choosing the low cost route because they had to hire others to come in and fix issues caused due to lack of experience or background. In many cases they had to start from scratch and pay again. Anyone in a service industry will tell you that to fix the “mess” of another costs more than starting from scratch. Those that chose professionals with credentials, experience, and proper references may have paid more initially (for good reason) , but they received what they paid for the first time.
You only have one business and you have invested your time, sweat and money. Though as small business owners we all have to be cognizant of spending our money wisely on those items with the highest return; choosing the lowest price option for services may not be the least cost option for you in the long run. We have clients who have hired accountants without professional designations; bookkeepers who have little to no experience; lawyers who are not experienced in the type of law they required. Some of the worst travesties are those that purchased marketing services, SEO, and websites from someone who sent them an email or called them on the phone with a promise of a low cost option. In all the cases listed, instead of hiring professionals who charge based on their experience, they opted for the lowest price route. In the long run, this turned out to be the most expensive route.
In all cases above, the client went with what they felt was the lowest price alternative for their business and in all cases it ended up costing them more money in the long run. They had to hire professionals who were experienced to come in and fix the issues that “the low cost solution” caused which cost them more than having had them do it originally.
If you are looking for someone to help you with your business, no matter what the services and are only making the decision based on price, you may end up spending more in the long run. I would hope if you were going to a doctor about your health that you were choosing the professional with the right credentials, experience, and background versus price. The same should be true of your business. Most of the business owners that answered our survey opted for selecting professionals with experience, client references, and credentials, but there were some that only selected “lowest price option”.
There is usually a reason that someone is the “lowest cost option”. Most professionals in the service industry will charge similar prices based on expertise, experience and specialization. If you wouldn’t want a low cost surgeon operating on your heart or a low cost auto mechanic working on your $200K sports car, you most likely would not want a low cost professional making a mess of your business.
In most cases, we all normally purchase services from others because there is a lack of expertise by those within our business to perform the function. You should be able to find out what the average rate is for the profession you are looking to engage based on the level of experience you require. For example, if you require a tax expert, you are going to pay more for that expertise versus a regular accountant, as this is a specialized skill. You really should perform due diligence to determine if the person you are hiring has the proper schooling or accreditation, experience, or expertise required to perform the service you are hiring them to perform. Once you are ready to choose someone you should look for what their clients say about them if that information is available. If client testimonials are not available, ask for client references. Going this route, you will get the services you require performed in a professional manner which will end up being of greater benefit than saving a couple dollars in the short term.
RK Fischer & Associates