The Principles of Pricing
Building BloQs was designed as a not-for-private-profit organisation. This post explains why, how we price our services, and suggests how we can help you manage costs more effectively.
BloQs’ mission, the reason it exists, is not to generate large profits, but to provide affordable workspace to you as makers so you can make a living and build self-sustaining businesses. Pursuit of profit from land is the principle reason that London has become an increasingly difficult environment for makers and manufactures, and we regard the BloQs model of shared access to be part of the solution to this issue. We decided on a non-profit model so we would be free of the need to make profits for shareholders. Without the pressure to pay dividends, prices can be kept lower, and any profits the organisation generates are automatically re-invested for the benefit of Members.
The BloQs shared-access model works by absorbing a number of risks that would usually be experienced by you if you had your own space. In establishing any workshop, you would need to factor in risk capital, long term commitments on a lease, machine outlay, maintenance, breakdowns, and replacement costs, costs for workspace infrastructure development, and a series of standing costs, those dreaded bills, light, water, heating, waste collection, and rates. Anyone successfully running their own workshop should still expect their workspace to cost in the region of 10 to 15% of turnover.
At BloQs the rate you incur costs may be similar, but only during the time you’re booked in, so your risks and costs remain lower overall. As well as this, you benefit from all the other established infrastructure and services, the knowledge community, networking with other members, and the long-term security of your workspace.
BloQs absorbs these risks by being available to a large community of Members. The theory goes that there should always be enough Members who need BloQs at any one time, that the organisation can cover its operating costs. It's important to understand that the model deliberately operates on a cost-plus basis, i.e. only setting its prices in close relation to its costs. This is so that as much headroom as possible is left available for you to add your own profit margin to your quotes.
We’ve laboured hard over getting the pricing calculation right. If the costs to you, our members, aren’t highly competitive, you’ll simply find the more affordable options, and our mission is null and void. If we pitch too low, we will not be able to sustain the important services we provide to so many of you. In making our decisions we are informed by constant appraisal of our running costs, and by extensive market research as what your possible workspace alternatives are. It can cost as much to lease empty space with no machines access at all as it does to use BloQs with its many resources that you have at your disposal.
And as with any organisation, it is sometime necessary to adjust prices. We are keenly aware that you, our Members, will need to pass these costs on to your clients and customers, so rises are something we do as selectively and as sensitively as we can.
Pricing Class - Learn How to Structure Quoting
*Covid Update* This has been entirely disrupted. Please forgive us and bear with whilst we re-organise this.
Your workshop use shouldn't actually be a cost to you; your client should always foot the bill. We want to help you achieve this. To do so we are launching a new Pricing Masterclass with Arnaud Nichols.
As well as being a BloQs Cofounder, Arnaud has had 20 years experience working as a freelance designer and knows his onions. In his class, Arnaud will lay out a structured approach on how to tackle this age old issue, covering common pricing hurdles, and how to factor all your costs when quoting. There's plenty of scope for experienced members to contribute to this also, and we'd love to hear from you on that.
Sound good? Please click here to register your interest.