On the 2nd Wednesday of each month I answer the most interesting question I receive from readers.
Question:
Do you need to wait until SOPs are finalized to update pricing?
No- while you want your pricing to reflect the way your processes work today and account for upcoming changes, you do not need to wait until the related SOPs are finalized.
A few reasons why:
Finalizing SOPs is often an exercise of documenting what is already occurring day to day in your organization. Why wait to update your pricing for what is already reality?
Where SOPs are indeed being updated for process changes yet to occur, the core pieces relevant to pricing are typically known in the first or second draft of the updated SOPs. The rest of the SOP finalization process- QA review, signatures, etc.- adds weeks (sometimes months) to the process but doesn't change the core process. You do not need to wait for this.
Your pricing is not part of your SOP! Your pricing is a reflection of the value your service provides, not a purely mechanical or mathematical formulation of your processes. SOPs are helpful but not essential to setting your pricing.
Finally- your pricing tool should be a living document. If you set your pricing for a new service on SOP version 1.0, and by final version 4.18 something important has changed, just update your pricing again at version 4.18.
Have a great rest of the week.
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As always, contact me or book a meeting to discuss how these principles can be applied to improve the performance of your business.
