Creating the Right Pricing Strategy

How should you determine what rates to charge? Traditionally, the local sheriff or constable’s office set the standard on how much to charge for serving a single instrument (one court document). This comes from the fact that the sheriff (the local shire reeves – original pronunciation for a sheriff from the old English dialect) were the ones that served civil process before private process servers came into being.

I don’t consider them the only factor, as the private process serving industry came about in large part due to the volume of work available. If you couple that with a need for quality and speed that cannot always be provided by the overworked understaffed sheriffs and constables, and you can understand the industry growth.

Whether you are creating a strategy to price a product or price a service the process, and the thought behind it, are similar. The primary difference being that with a product you easily know the cost at which you will purchase said product. Selling a service however, is not quite as cut and dried when figuring out the “cost”. You do, however, have more flexibility when pricing service than when pricing products.

Process – The popular Cost-Plus pricing formula says you should take the cost + overhead + desired profit margin to arrive at a price to the marketplace. To simplify we can include overhead in our cost calculations to determine what to charge.  Cost + Profit Margin = Price of Service

Determine your costs; i.e., how much does it cost you to provide the service? The cost of producing any service is made up of the following three parts, according to advisement of the US Small Business Administration.

• Materials cost – what goods do you use in providing service?
• Labor cost – what direct labor costs do you incur in providing service? Reimbursed expenses associated with labor costs should be considered such as gas, wherein you may want to factor in distance traveled. It has been said that for every dollar per gallon of gas, you should factor in a cost of $5.00 for the service. With today’s rising prices of gas hovering around $3.00 a gallon that equates to $15.00 for a cost of service. Should prices rise toward $4.00 per gallon your cost of service will rise accordingly, i.e., $20.00.
• Overhead cost – these costs are incurred whether or not you are selling, be it a product or service. What are your indirect costs, such as non-server labor (yourself or other administration or management personnel), rent, taxes (income tax, property tax, franchise tax, etc.), insurance, advertising, office supplies, office equipment, depreciation, utilities, mileage, etc.?  Figure in a reasonable amount of your overhead costs for each service provided on either an hourly or percentage based on your business model.

 As an example, if you have an overall price of $60.00 per court document served in your local market, $30.00 would be for the actual serving part of the assignment (i.e., to cover your time to go from your office to the service address. The remaining $30 would break down to $15.00 to cover fuel costs and the other $15.00 to cover overhead.

Determine a fair profit margin. Profit margin is that amount added to the costs of doing business to ensure you are profitable. Take some time in determining your profit margin, as you don’t want to add so little that you find yourself shutting your doors from lack of profit, nor do you want to add so much that you find yourself shutting your doors because you priced yourself out of the market.

Check with me on my next post on Creating a Competitive Advantage. Have you checked out my book, “The Business End of Process, Running a Process Service Company From the Ground Up”? It’s available on Amazon.com.http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0. It won’t’ tell you how to server process, but rather provides the nuts and bolts about how the processes and procedures I use to run a successful process service business.

Marketing your Process Service Business to Legal Association Members

The beginning process server business person referred to in my last blog also requested some guidance on marketing to Bar Associations. “Do I just hand out flyers or business cards introducing myself to the people that are there letting them know I’m offering a service? Is it okay for me to be marketing or promoting my business to these people in the association?”

That's a very good question, and one you always want to ask before promoting to any group you belong to. Do not just assume that it will be okay.

With regard to bar associations, as long as you are allowed to attend meetings, by all means, go and work on building relationships with other attendees. The key words in that last statement are “building relationships”. Networking is critical in most businesses, and the process service business is no different.  Networking requires the building of relationships; as in getting to "know, like and trust" one another. While you may not get any work right away, over time potential clients will get to know you. By building rapport, when they are looking for a server, they will already know you thus making your chances of being selected far greater than someone they would just have to pick out of a list of server companies.

I find networking events invaluable and attend them as often as I can find them. Do not be anxious to drop your business cards right away. If you have ever entered a room and had a stranger thrust their business card into your hand with hardly so much as a hello, you can understand why.  Do, however, take business cards with you. When, and only when, someone asks for a card, give them three; one card for them to keep and, the other two cards for them to share.

Remember, networking is not about the “hard sell”. It is a soft sell process achieved through the building of relationships over time where you discuss business as well as personal topics. Over time, by building rapport and trust, the potential client becomes a friend, or at the very least a good acquaintance, who in turn becomes a client or referral partner.

I hope these points have been helpful. For more helpful information such as this, read through my past blog posts or check out my book, “The Business End of Process, Running a Process Service Company From the Ground Up” available on Amazon.com. http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0.

Direct Mail Marketing for your Process Service Business

I recently received an email from a process server who recently started his own process serving business. He had read my book, “The Business End of Process Service” and had a few questions about marketing his business. I felt it might be helpful to others to share my response.

His first question was about direct mail and whether it mattered where or how his post cards were sent as long as they made it to the law office. He also wanted to know if there was a way to consolidate post card sending and gear it toward a specific target to increase chances of it being seen.

When it comes to direct mailing, the key is to go high volume to a specific target group. In this case your direct mail piece (post cards) would be targeted to law firms. It does not matter if the post cards are addressed to the attorney because the legal secretary will generally be the one to sort through the mail as it comes in. Post cards, or for that matter most any direct mail,  operates strictly by the numbers; the more you send the better your chances that someone who is in need of a process server will find your card in their mail box.

Typically, most established law firms will already be working with a process server. Sometimes, however, the server they are using may not be providing good service and the law firm may already be on the lookout for a replacement. If you are sending out high volume, chances are the very day they are thinking of replacing their server is the day they receive your post card.

By high volume send outs, I am referring to sending anywhere from 100 to 1000 per week. Once you have sent post cards to every attorney on your list, resend them to the entire list again, and again, and again. This is known as a marketing campaign, where you market to the same target over and over. You can use the same card or you may want to vary it a little to see which style of card brings about the best results.

The reason for being redundant and repetitive is that usually, from a marketing standpoint, a customer may not pay much attention to you the first time your postcard arrives. After they have seen it 4-5 times you are then, on a subconscious level, “on their radar”. High volume is more likely to equal having your post card land on someone’s desk at just the right time.

Next post, I’ll share my thoughts on attending association events to market your business. More information on this and other relevant topics to running a process server business are available in my book “The Business End of Process, Running a Process Service Company From the Ground Up” available on Amazon.com. http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0.

Keeping Track of Things

Organization is Key to Success. Initially, I found it challenging to keep track of the status of pending assignments, especially out of town service assignments that I had outsourced to another server.  You know how it goes; you get busy with the assignments visibly in front of you and, as the saying goes, “out of sight, out of mind”. Then you get a call from your client wanting to know the status of their assignment in the other state. Talk about awkward! How do you tell a client you don’t know whether or not their paper had been served? I don’t know about you, but I don’t like having to say I will check and call you back. I prefer to know the status and I prefer to be able to tell them when they call that I know the status and why or why not the paper has/has not been served.

Whoever “they” are… they are right when they say “necessity is the mother of invention”. So out of necessity, I adopted a follow up filing system that works for me. You can try this out for yourself and see how it works for you.

The key to my filing system is what has been termed a “tickler file”. Set it up as follows and usually you can fit it within a single drawer of any small filling cabinet. It’s set up on a calendar cycle with 31 folders (with one folder labeled for each day of a typical month) and an additional 12 folders (one labeled for each month of the year). After the system is set up and in place, you simply open the file folder for that day and see what you need to check on.

As I receive assignments, I create physical document reminders and place them in the various folders; I find it easiest to print an extra copy of the individual field-sheet and filing that document into the appropriate file folder. A blank sheet of paper also works, but then you have to write in the basic field-sheet information which is an extra step, taking that much more time. Place that sheet in the file folder that is 2-5 days out from when you received the assignment, depending upon how quickly you want to follow up on that assignment.

Example: March 5^th you get an assignment for service in another city or state. You locate your server and send the assignment to them. Print an extra copy of that assignment field-sheet or and place that document in the number “8” file folder. Just make sure whatever file folder you place the document in, is a business day.  On March 8, you simply open up the number “8” file folder, pull out the follow up documents and you now have a physical reminder to check on that assignment with the assigned out-of-town server.

As you take on more and more assignments over time, you place the physical paper reminders into the various numbered folders. At some point each day (preferably earlier rather than later) you open up that day’s numbered folder and there is your physical reminder to check on the assignment. Take whatever activity is necessary to find out what is going on with the service of your court documents by the server. Now when you get that phone call, you are prepared with a ready answer.

The twelve monthly folders work much the same way. Let’s say you have an assignment or other project that doesn’t require such quick follow-up.  The monthly folders are there for that purpose. 

You’ve begun working on a court document and now your client has called you to stop attempting to serve the court document until further notice and just hold on to it. This does come up on occasion and it is likely that you will eventually go back to attempting service. For now though, you have to hold on the service and you need to get the document off your desk without losing track of it. File the document as normal and if you will be following up in thirty days, place the extra field-sheet in the monthly folder that is thirty days out. Using the previous example, you would take the March 8 assignment that was put on hold on March 14, and file the field-sheet copy in the April folder. April comes along and the follow-up document is there to trigger the follow-up action.

You haven’t heard back by the follow-up time, so you contact the client and, sure enough, they completely forgot about it themselves and the matter was solved weeks ago, so you need to non-serve the court documents. You worked on this file and it is earned income that you could have invoiced weeks, maybe months ago.

So, you ask, why do I use a physical filing system? Why not set up reminders on my smartphone or computer, etc.? For me, there is something psychological about having a material, physical instrument in front of me that works far better as a reminder. I find electronic reminders are more easily set aside. Plus there’s something secure about a physical system that doesn’t crash like an electronic one might. Yes, it could be destroyed or otherwise damaged by fire, flood, tornado, hurricane or earthquake, and if that happened, you would probably be far more concerned about other things than with the status of pending assignments or projects.

There are alternate ways to keep organized, but this is a way I keep track of things that works well for me and has worked well for many years.

What’s your system of choice? Do you use a physical manual system or do you use something more high tech?

Are you interested in starting your own Process Service business? Check out “The Business End of Process, Running a Process Service Company From the Ground Up” available on Amazon.com. Thank you. http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0.

How to Continue the Balancing Act

You’re feeling pretty good about the balance you’ve achieved, right? You have your process service business growing, taking on new clients. You’re managing your time, productively filling all your available hours and things are running along smoothly. Life is good.  Wrong!

If you wish to keep growing and maintaining that work / life balance you need to consider outsourcing; farming out some of your non-serving tasks. Yes, that’s right you pay someone else to do certain parts of your business for you. While you may be pretty darn good at what you do, no one person is the best at everything.

By outsourcing non-serving tasks, you now are free to accept and complete more assignments more quickly, hence more revenue. So much more revenue that the server (you) can now afford to have all these other people do all of these other tasks without affecting net  profit. As an added bonus you gain increased down time to spend on things like family and other personal pursuits.

So what gets farmed out? Go back to the list you completed from the last blog about how to manage your time. Carefully review that list to determine several things, such as 1) what do I have to do (that no one else could accomplish – be honest), 2) what do I dislike doing that someone else could do (and probably do better, more efficiently, therefore saving some $), and 3) where am I lacking the required skills and knowledge to accomplish the task at hand?

Consider what your time is worth. And, remember, time (no matter how hard you try) is not something you can replenish, unlike money which, hopefully, you are continually earning and replenishing.  Work smart, work strong, not hard.

Here’s what I suggest you consider outsourcing

·         Accounting/bookkeeping, Tax Preparation, Payroll

·         Courier Service

·         Out-of-town Service

·         Skip Trace Work

·         Social Media (Facebook, LinkedIn, Blog Posting, Website Updates)

·         Anything that is simple, yet repetitive and may be quickly reviewed prior to submission, and that which if completed by you at your hourly rate actually costs you money to perform

Do you outsource? What would you add to this list? Share your thoughts. I’d appreciate the feedback.

Are you ready to start your own Process Service business? Check out my book “The Business End of Process, Running a Process Service Company From the Ground Up” available on Amazon.com. http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=%22The+Business+End+of+Process%22&rh=i%3Aaps%2Ck%3A%22The+Business+End+of+Process%22&ajr=0.

 

 

Time Management

In the beginning, there was time; time to set up your business, to focus on getting new clients, and to enjoy family and friends. In fact, you may have established a nice routine between serving the clients you have, obtaining new clients and living life. When you start getting a regular flow of clients, however, you may quickly find that your schedule becomes anything but routine and time is at a premium.  Unlike money, once it’s spent time can’t be replenished. After a while, you may find yourself running out of hours in the day to get done everything that needs to get done.  In fact, if you’re not organized, process serving can become rather chaotic as it is not a business that easily lends itself toward structure.

Setting of appointments is rare. It seems as if they trickle in, come in all at once or arrive at the least convenient moment.  Then BAM!  All of a sudden you have to scramble.

Process service operates on what I call a “fireman’s standby” concept. You know, you are eating lunch, waiting for the next assignment, when right in the middle of taking the next bite of your cheeseburger you get a call to drop everything, go pick up some court documents.  Right now, this instant, forget the burger, and get them delivered before the business day is done, or else. Firemen live that sort of life.  They’re in the fire station, cooking spaghetti, playing Ping-Pong, and then there goes the alarm. It’s down the pole and off to the fire.  Process serving can become like a constant battle to put out fires, and there you are not quite organized to go from one fire to the other.

It doesn’t have to be that way. Over time, I learned from others in the field, read a lot of business organization books and practiced trial and error, until I figured out a way to satisfy most, if not all, of the numerous client demands that come up in a single day. And, I still managed to have my family time, my vacation time, and my sanity.

It took me several hours stretched out over many months to develop a working routine. I literally sat down and analyzed everything I do on a daily basis, thought of the best times to do these things, how to do them, how long it took to do them, and then blocked out chunks of time in order to do them. This works whether you are a “lone ranger” or if you have a team of process servers working for you.

          Following is the schedule I use. It works for me, and will probably work for you.  You can always modify it to suit your particular situation.  But whatever you do, get organized. Set up an actual schedule. Even if it just generally sets up your day, it may be just the right amount of structure you need.  Tight time planning is critical for a successful business.  The tighter your time planning is the better.  If you can schedule things down to the minute, then do so. It will make things run so much better.  If you don’t, and then you have one too many clients running you from point A to point B, it won’t be long before you run yourself into the ground. 

Typical Daily Routine – 10 hour day for “full-timers” with a large book of clients

            Serve assignments in the a.m.

            Mail
            Email
            Logouts
                      (closing out completed assignments)
            Logins from the mail
                      (setting up new assignments)
            Serving POE assignments
                      (serving at businesses and places of employment)
            Going through the follow up folders/daily folders
            Return phone calls
            Do correspondence/affidavits/skips
            Serve POE assignments
            Daily court run
                      (afternoon pick up of new assignments at the courthouse)
            Log in courthouse pick ups
            Log out completed assignments
            Serve new assignments that have a residential service address

          What is your best time management tool? Comments always welcome.
 
Next post: What I recommend when you have a daily schedule that you closely follow and yet you still find yourself running out of hours in the day. Want more information about structuring your process serving business? Check out my book “The Business End of Process Serving, Running a Process Service Company from the Ground Up”, available on Amazon.com and Kindle.

Starting Up or Beyond, Technology Is Our Friend

Are you taking advantage of technology in your business? The right equipment is so important. Without it, there is very little you can do. The optimum way to go is having all the modern “toys”, such as smart phones, laptops, tablets, wireless printers (technology hardware) and applicable software, such as management programs. When starting up, however, that’s not always possible. Obtain what you can, as you are able. A seasoned process service business will normally have the full array of technological tools.

As a process server, you will most likely be on the road throughout most of your day. Wireless technology is the best way to go. You will usually discover that using top of the line technology is well worth the investment to your growing business.

Imagine yourself with a completely mobile office; your vehicle of choice, a notebook computer or tablet, a wireless printer, paper and your cell phone. Your client contacts you by phone or email with a service request. They have even attached the necessary paperwork to your email, or they email it after the call. You print out the court documents, start your engine and as simple as that you are off and serving.

With the availability of cloud computing, while you are out of your office, you can even access your company database and other documents by using cloud storage sites. Many of these sites provide a limited amount of storage at no cost which may be upgraded as needed to add more storage or features for a monthly fee.

Now repeat the mantra after me, technology is our friend… technology is our friend… technology is our friend.