Rates Question

Sorry this is KINDA another "how much should I..." question, but everyone here is so smart about this stuff. Most painters in my area charge 75-100 an hour for private parties. I decided I would get more gigs if I undercut them and charge $60 per hour with a max of 12 kids, and for more kids they have to book another hour. Travel rates and a 2 hour minimum apply to gigs more than 45 minutes away. Hubby and neighbor both say I am cutting myself short. Thoughts?

Hmmmm, so then someone is going to decide to undercut you and charge $45.00/hr and then someone is going to decide to undercut them, and on and on. If the going rate is $75-100/hr you should stay pretty much around that price range-unless you are not that experienced yet. As you improve, you can up your rate. Undercutting for the sake of just getting more business is a good way to make enemies, and who really wants to do that. And who wants to price themselves out of making any kind of profit. This is not a cheap art. Supplies, travel, insurance, education all add up and should be reflected in the painter's price-worth, IMHO.

You won't get more gigs. People will wonder why you are less and assume it is because the others are better. I started getting more gigs when I raised more prices.

Price as I see it reflects many factors, the first thing you want to know, is are you able to break even, when i calculated my break even, i also included my time worth.
it is important to check the competition around you, and research their pricing.
you dont want to price yourself lower, or should i say too low for all the reasons daydreamer gave you, but also, think about what kind of image you want to create, do you want to be that "cheap face painter"? also think about the future, what will your costumers think about price change? i am not saying that you cant change your prices, but you want to think about it when setting your initial price.
in my area, prices are similar, when i started my business a little less than a year ago, for the first three months i charged $65 as an introductory rate, this was good for me as I could build a gallery, and get some experience. after that $70 and recently raised it again to $75.

pricing is a big subject, i tried to bring a couple factors here to help, but really there's a lot to it..

Undercutting other area face painters is never a good idea. If you feel that you are new and need to charge less at first in order to build a customer base, get practice in, or develop some designs, that's something different altogether, but I would advise against deliberately charging less than your competition.

The others are correct about being the "cheap" painter as well... people who price shop or look simply for the cheapest painter are not the kind of clients you want to attract. You want clients who will appreciate skill, talent and a professional party entertainer. People will respect you a lot more, try to haggle a lot less, and be more pleased with you work (believe it or not) when you charge more.

You could do a "July Special" with a bit of a lower rate. Just make sure they know what your normal rate is so they won't be suprised if they call to book you next year.

You guys are all SO right! Thank you for setting me straight. A lot of great points here that I didn't even consider! Thank you thank you.

AngieAnders wrote: If you feel that you are new and need to charge less at first in order to build a customer base, get practice in, or develop some designs, that's something different altogether

I think this is more what I was thinking when I decided that.

Great idea with the July Special too! I think I will do "Summer Special" with reduced rates. That will give me time to get lots of great practice and build some clientele!