Guidelines for Pricing Your Disco Service

The subject of how much to charge for your services is one that always results in different points of view. How can one DJ charge £450 whilst another only earns £150 for a similar event?

There are a number of factors that can affect price, not least supply and demand.

Supply

Get to know your 'competitors'. I have placed this within inverted commas because although they are in competition with you for business, they can also be your allies by passing work your way (and vice versa). There are some DJs who prefer to go-it-alone and find out what their rivals are charging by making fake enquiries - this is a practice that is not recommended - far better to get to know them and then simply ask!

So now that you know how much other discos in your area are charging, why not just undercut them and take their work? Before doing so, however, take into account that we're in a service industry and most people relate cost to quality. Of course there are those clients who always want the cheapest of everything and if you want to provide for this sector (nothing wrong with that), keep your prices at rock bottom. If not then you need to charge more - and offer a service that reflects this extra cost - because one thing that doesn't work well is trying to be all things to all people.

Demand

The next item to look at is close by you right now - your diary. How many enquiries are you receiving? How many of these translate into confirmed bookings? If it's close to 100% then you could consider raising your prices and if it's as low as 10 - 15% you may be attempting to charge too much. I say 'may' because those who target the very top end of the market, which is relatively small, don't require a high conversion rate.

Next, how many times are you out each month? How many gigs would you like to do? - You may want more, or less depending on your circumstances. Of course there are many factors that will affect the number of enquiries you receive, such as how you promote your business, referrals and advertising which will be covered in future Newsletters

Another way your diary can come in useful is to ascertain how many enquiries you have to turn down for a date after it is booked. Most businesses have peaks and troughs during the year and you cannot expect to be as busy in January as say August or December. However, if demand is sufficient to increase your prices, you could then consider offering a discount for off-peak periods.

How Much To Charge

The start of a New Year is always a good time to take a long look at your business and plan for the next 12, 24 & 36 months (hence the timing of this article) and certainly pricing should be included in this. Only you can decide how much to charge for any individual event based on your own level of expertise, supply, demand and your clients' requirements but I've included one method below which may help ...

The Price Formula

Add up the number of bookings you did this year (A) and also all your expenses (B). Include CDs, repairs, vehicle costs, insurance (inc PLI !), ProDub, advertising, roadie and equipment purchased. If you spend roughly the same amount on new equipment each year include the total figure, otherwise use a percentage of this figure (33-50%) and include the same percentage in next years' calculations. Divide the total of all your expenses (B) by the number of gigs you did (A) and you have your starting point (C).

Next you need to decide how much you would like to earn per hour (remember this bit is taxable). Take into account not just the disco hours but client meetings, preparing for the event, travel, set-up times, waiting around etc. Add this to your expenses (C) and you'll have a good indication of what you should be charging to make your disco financially worthwhile.

Examples

Total gigs 2009 (A) = 100
Total expenses for 2009 (B) = £5000

Total expenses per gig (C) = £50

Say you require £15 per hour (about £10.50 after tax and NI deductions - assuming you've used up your tax allowance)

5 hour disco, 2 hours prep, 1 hour travel, 1 hour set-up/breakdown, 1 hour waiting time = 10 hours

10 hours x £15 = £150 + £50 expenses gives a total of £200. With your earnings coming to about £105 net (£10.50 per hour).

A more realistic figure may be £25 per hour (£17.50 after deductions). A total of £250 with your earnings totalling £175 net.

If you want £40 per hour (£28 after deductions) the total is £400 from which would earn you £280 net.

Of course you could charge a different hourly rate for travel etc and another for DJing but, whatever system you choose, as long as you're earning the amount you want and you've taken into account supply and demand for your area, you should end up with enough work at a price to suit both you and your customers.

Conclusion

I'm sure there are some readers who are of the opinion that they could never earn more than they do at present and some who are charging the same now as they did ten years ago because they believe that their business would suffer if they dared to raise prices. If you're content with the way things are - fine - if not review your pricing structures now. By this time next year you may be pleasantly surprised with the outcome.

We hope you've had a successful and prosperous Christmas Season. Good Luck and we wish you all the best for 2010

Happy New Year!

Paul & Sandy

This is an article I originally wrote for Pro Mobile magazine in Jan 2005. It's been updated with additional material for this Newsletter. If you don't yet subscribe to this specialist publication for Mobile DJs you can read all about it, and request your free copy, at www.promobile.org.uk/