Wednesday, January 25, 2006

Painting Curbs and Pricing

When I was 10, I started my first business. I saw Cal Poly kids putting up signs to paint curbs in the neighborhood. They charged $12 to paint a curb. Disposable income was very limited in my family growing up and I thought, wow, I can do that, and for less. $12 seemed outrageous to me.

I headed to the local hobby store and bought stencils for numbers, I picked up 2 cans of spray paint at the local hardware store, and a big card board box. I cut a hole in the bottom of the box to the dimensions of our curb painting, I could press my feet against the box and spray the rectangle to create the background. Then with a little tape we would put the numbers over the rectangle and add the numbers. It worked well.

I started as a one man show. I knocked on doors and offered to paint their curb for $3. It worked and I was off. My brother, cousin, and friend saw the success and wanted in. So we tuned the operation. My brother Mark and friend Brandon painted the curbs and my cousin David and I sold. We knocked on doors and put tags on the curbs we sold. Brandon and Mark would come along and paint them.

We started with a low price that made us all money. As we had success, I said to David, let's raise our price. We did. First $4, then $5 and before long we were at $8. I was scared to go higher. I couldn't imagine people paying us more. But, we raised them to $10, and then $12.

The BIG LESSON here is start with a price that is low enough that it ensures demand. With new products, many customer segments will trade off experience, reputation for a lower price. As you do a good job, improve your product and grow your reputation, then raise prices. I've seen too many products do the opposite. They start with with a price matched to established competitors. Their product has little success. Morale drops, prices get lowered and the quality spirals down. Do the opposite. Start low, improve quality, and raise rates.

3 comments:

Chris Bauman said...

Paul, I do think that pricing a product properly from the start is extremely important. During testing always be doing market research to see what customers will pay. Find the one or two Value Drivers that will make all the difference. If these are in the right spot, sales won't be nearly as tough.

James said...

I wonder how long it is before David, Brandon, and Mark get on Hubpages.

Curb Painting said...

Great story.........I started when I was 17, but it put me though school.