Using AI to create SOPs for your business

I recently received a promotional email offering a free SOP (Standard Operating Procedure) that promised to show how to offer your services like a “pro”.

Rather than enter yet another promotional conversation, I copied and pasted the entire email into a couple of AIs to see if they could create an SOP based simply on the promise the email was claiming.

And they succeeded admirably. The first one used ChatGPT’s 4o model, the second came from Ollama (the free open source AI).

As you can see, they’re both perfectly fine, offer reasonable advice, and would be acceptable as a freebie lead gen magnet (especially if jazzed up with some good graphics).

So anytime you want to create a lead gen magnet, spin up your AI machine and feed it. You might just be surprised at what it comes up with.

ChatGPT’s Version

SOP: How to Price Your Services

Objective

To establish a clear, confident, and profitable pricing strategy for service-based businesses.

Scope

This SOP applies to all service proposals and pricing discussions within the business.

Responsibilities

• Business Owner/Manager: Ensure the SOP is followed and updated as necessary.
• Sales and Pricing Team: Implement the SOP in all pricing and proposal processes.

Procedure

1. Incorporating Healthy Margins

• Step 1: Identify all cost components for each service (labor, materials, overhead).
• Step 2: Determine the desired profit margin. A standard range is 20-50% depending on the industry.
• Step 3: Calculate the price for each line item by adding the profit margin to the cost.
• Step 4: Review the total proposal to ensure all services are priced with healthy margins.

2. Negotiating with Clients

• Step 1: Prepare a tiered pricing structure with different service levels (basic, standard, premium).
• Step 2: When a client cannot afford the initial quote, offer the basic or standard package.
• Step 3: Highlight the value and benefits of each tier to justify the pricing.
• Step 4: Be willing to make minor adjustments but avoid underpricing your services.

3. Presenting Prices Confidently

• Step 1: Present the proposal in a professional and clear format.
• Step 2: Use positive language and focus on the value provided.
• Step 3: Offer a brief explanation of the pricing structure and the benefits included.
• Step 4: Practice the presentation to maintain confidence and clarity.

Tips for Success

• Know Your Worth: Understand the value your services bring and price accordingly.
• Market Research: Regularly review competitor pricing and market trends to stay competitive.
• Client Communication: Maintain open and honest communication with clients about pricing and value.

Review and Update

This SOP should be reviewed quarterly and updated as needed to reflect changes in costs, market conditions, and business strategy.

Conclusion

By following this SOP, you will be able to confidently price your services, negotiate effectively, and maximize your profits.

Ollama’s Version

How to Price Your Services: A Step-by-Step Guide

Objective: To help service-based businesses confidently price their services, incorporating healthy margins, negotiating with clients, and presenting prices effectively.

Pre-Pricing Checklist:

1. Define Your Worth: Identify your unique value proposition, skills, and expertise.
2. Conduct Market Research: Gather data on industry standards, competitors’ pricing, and target audience’s willingness to pay.
3. Set Financial Goals: Determine your desired revenue, profit margin, and cash flow requirements.

Step 1: Calculate Healthy Margins (10-30 minutes)

1. Calculate your overhead costs, including business expenses, taxes, and insurance.
2. Determine your minimum viable profit (MVP) to ensure financial sustainability.
3. Apply the 60% rule: allocate 60% of revenue towards customer acquisition, 20% towards operational expenses, and 20% towards profit.

Step 2: Negotiate with Clients (15-30 minutes)

1. Anticipate client objections and concerns.
2. Develop a clear, concise pricing structure that addresses common objections.
3. Use the SPIN selling technique:
   * S: Situation
* P: Problem
* I: Implication
* N: Need-Payoff
4. Be flexible and open to negotiation, but maintain your minimum price.

Step 3: Present Prices Effectively (10-15 minutes)

1. Use clear, concise language when presenting prices.
2. Highlight the benefits and value of your services.
3. Emphasize how your pricing aligns with the client’s needs and budget.
4. Be prepared to address concerns or objections.

Step 4: Review and Refine (5-10 minutes)

1. Review your pricing structure and ensure it accurately reflects your costs, expertise, and target market.
2. Refine your presentation and negotiation techniques based on feedback and results.
3. Continuously monitor and adjust your pricing strategy as needed.

Post-Pricing:

1. Track Progress: Monitor revenue, profit margins, and cash flow to ensure the effectiveness of your pricing strategy.
2. Adjust as Needed: Make adjustments to your pricing structure, services offered, or marketing approach based on performance data.

This SOP provides a structured framework for confidently pricing services, incorporating