How to Price your Services when you Work for Yourself

pricing your services
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Knowing how to price your services when you work for yourself is always a challenge.

I’m a strong believer in that pricing can make or break your business.

In addition to this, I also feel most people need to RAISE their prices!

Many solopreneurs are massively undercharging for their services because they aren’t adding up correctly.

You don’t need to be a maths whizz to work out how much you should be charging.

Here are some easy tips on how to price your services:

Grab a pen and paper (or open an excel file) 

 1. Put a price on YOUR head

Yes, you deserve to be paid.

Just because it’s YOU doing the work and it’s YOUR business doesn’t mean you don’t have an hourly or project fee.

If you don’t know how to do this then go out and look for someone you’d hire to do your job for you.

 

2. Get ridiculously detailed about your expenses

If you have to travel to your client you need to include travel expenses, even if you are driving your own car (petrol costs money!)

Similarly, phone calls need to be factored in, even if you plan to use free services like Skype.

Why? Because, there MAY be a chance that you have to make an urgent call from your mobile and that won’t be free.

Add in coffees, snacks, extra paper, printing expenses (but be realistic – budgeting for lunch at a swanky celeb filled restaurant will probably tip the balance).

Don’t forget to add your time in too.

 

 3. Think “worst case scenario”

Doesn’t sound too good does it?

What I mean is, IF that speaker you are relying on is offering you a great “mate-rate” deal or doing it for free, you NEED to account for their rate as if you were paying FULL price.

One day they may not be able to make it or you may want to hire someone else. Make sure your service is priced correctly from the start.

NEVER EVER account for something as being FREE. 

 

4. Be realistic with your time and resources

How many hours can you REALLY work in a day?

How long will that project really take you?

I know that I sometimes struggle to work this out but it’s critical!

I once quoted for something thinking it was “just gonna take a couple of hours” – 8 hours later I was still no where near done and, well, I wasn’t happy.

 

5. Add it all up and then compare to get your final price for your services

Ok, that should have been all pretty simple.

Now for the fun part.

Add it all up and then see where you come out?

Too high? Maybe you need to rethink the price on your head.

Too low? This is the best position to be in – bump it up to where you want it to be.

Not sure where you fall?

Go check out your competition.

 

Obviously pricing is just one part of getting your marketing right.

Still not sure how to price your services? Give me a shout and I’ll be happy to help!

In the meantime, jump on the newsletter list in the awesome pink box below and I’ll send you exclusive FREE tips on how to market your business that you won’t get from just reading my posts! What’s stopping you?

SO, What tips do you have for pricing your services?

 

18 Responses to How to Price your Services when you Work for Yourself

  1. Hey Ameena,
    love it! I took some advice from a more experienced friend to keep my prices lower at the beginning to accumulate some clients and – testimonials!

    It worked great and I always try to overdeliver to make sure people are happy with the service.

    Now that I work way more than before, I have to start picking and choosing what is worth the time, since some things will take hours to finish but are such services that you can’t really charge a lot. Also, when I realized how much taxes and stuff I will have to pay, I realized the prices will have to go up.

    It wasn’t that hard considering I started on the low end, so I am slowly raising them and I haven’t seen people not hiring me for it.

    You just motivated me to raise them even more, lol, some people won’t be happy… hahahaha

    • The fact that you have more work and are being picky about who you work with means it’s time to raise your prices!!!

      You may put some people off but I can guarantee you’ll attract a different audience and you’ll benefit from it!

      Keep me posted!

  2. Great stuff, Ameena! I could really use these tips, especially that I am a sucker for giving in to people who haggle and ask for discounts. 🙁

    Better get to my writing pad and rethink my cost.

    Enjoy your holidays with John and BiP! 🙂

    • Thanks Kim, yes, haggling and discounts is a pain – I struggle with that too. Stand your ground – if your pricing is right it often means that the bargain hunters don’t come your way so you don’t have to deal with the “give me best price” syndrome!

      Good luck and enjoy the holidays too!!!!

  3. Good post! Setting your price is imperative to getting your business model right and can make a difference between a business that works and a business that doesn’t.

    I should know! I used to offer my services free of charge, earning a commission at the end IF the customer went with what I had sourced them. The advice you gave me was priceless, since setting a price I have not only informed people that I value my time (and that I’m good at my job, so good that I charge!) but also I have made my clients accountable as well.

    Sound advice Ameena, I hope others will benefit as I have!

    • Hey Sharon, thanks!!! Yes, pricing can make or break your business.

      FREE services? Urgh – it’s hard to discount FREE isn’t is? Also, FREE = no value … 🙂 Glad you applied my advice and are seeing results already. And YES – you are great at your job, what you do is WORK and therefore you MUST be paid!

      Keep rocking Sharon!

  4. Hello Ameena,

    these are essentials that many do miss, I’d say.
    But working for free (hate it – who gives me something for free when I need to fill my fridge ? I mean, how should I make a living out of volunteering ?) seems to be fine for a lot of people, since on the internet so many things are there for free.

    I wouldn’t put a price-tag on my head though, but yes: not only the work has a value, but also the preparation for it (studies, experiences…) ! Good to think it over from time to time, thanks for that post.

    • Thanks! YES, I’ve once had someone offer to pay me in cake and coffee … I politely declined and told them that the day my electricity bill can be paid in that currency I’d be happy to start a business relationship!!!

      By putting a price on your head, I was just meaning you need to actually attach a price to your time. I see a lot of people trying to be “competitive” price-wise by omitting the cost of their time, or the time of their team.

      Thanks for stopping by! Look forward to seeing you here again and glad you enjoyed the post!

  5. Hi Ameena,

    Very interesting, and a lot of great details.

    I have given this topic a lot of thought, and I have two perspectives. One from me being the head of marketing at a University, and one from me being a soloentreprenur (is that the right name?). Anyway.

    When I work with companies as the head of marketing, I want to get as much details as possible about the prices. I don’t care that much about how much they charge per hour (well, I do compare with other companies), but I also want to understand how they work, and how fast they work, and what other expenses are included. For instance, if I call them for five minutes to ask an important question, will that cost me money? If I will pay for, I want to know, because then I can decide if I need to call or not, based on this information. The same goes for meetings. Some of the companies I work with doesn’t charge for meetings. That’s their choice, but I really want that information.

    When it comes to my soloentrepreneur project, I want to keep the prices low, and I’ll probably even do some free projects in order to get more clients. I’m not sure if this is the right thing, but I believe that I need to attract clients, and that I’ll do that by showing them results and offering them cheap/free content. I’m comparing my services to a free trial software. They can test me for a project or for 5 hours, and if they like what they see, I’ll start charging for it. If not, we both go our seperate ways 🙂

    What do you think, does this sound like the right thing to do for someone like me starting a brand new business?

    • Hey Jens,

      Glad you found the post interesting … you ask a very juicy question … one I might just be turning into another post!

      So, WHY do you not think you can work as a solopreneur and apply the same rules and criteria as your Head of Marketing position at the University?

      I personally do not believe in giving away your trade for FREE. Where do you go from “free”? 50% off my FREE services? Free is a dangerous position – how can you attach value to something that costs nothing? I’d say that the clients you do amazing work for and charge nothing for will probably pay you with their eternal gratitude but go to someone else and PAY them instead because they will perceive them to be better because they charge.

      Does that make sense? Think about what you are already giving away for free … your content on your blog, your newsletters, your eBooks … the list goes on … as marketers we usually have to pitch to a client and you give away even more information – that should be MORE than enough to seal the deal.

      Free hurts you, it hurts your business, and it hurts the market.

      So that’s it from me Jens … if you want to talk more about this send me an email and I’d be happy to go into it in more detail with you 😉

      • What you’re saying makes a lot of sense, and it’s probably why I’m not earning any money from what I do online 🙂

        I’d love to discuss this in more details, especially since I’m about to start my business during 2012 and need to start the right way… and not the Jens-Way 🙂

  6. Fully with you on this Ameena. An important thing to remember is there is a serious psychology behind pricing and perception that many people often forget. Being too cheap can turn off as many people as it turns on. Everything you described here was spot on especially for folks getting into the world of trying to make a living online, through a service, and then getting their butts kicked simply because of a poor time investment estimation.

    Keep spreading the good word lady! 🙂

    Marcus

    • Thanks Marcus,

      Yes, pricing and perception is key. Personally I don’t ever want to compete on price. Ever.

      I know that if something is priced too low it creates suspicion and doubt as to how good it really is – if it’s too high people bounce immediately … pricing is something I am particularly passionate about especially when it comes to highly personal services.

      Yeah, time estimation is something I struggle with but practice makes perfect!

      🙂

  7. Hi Ameena,

    the price of a product should be based on the value it adds to the customers. However, there are still many online entrepreneurs who fix their prices according to what they need/want to make.
    Wrong strategy in those cases.

    Cristina

  8. You have delivered up some really juicy words of wisdom and food for thought, Ameena!

    My gut level instincts and logic tell me to shy away from looking at what “competitors” charge.

    First off, I don’t see myself as having any competition. Don’t mean to sound smug or arrogant about it but do I really need to concern myself with someone who has one year of experience in my niche compared to my 30 years?! I don’t think so.

    I say if you’re going to do a comparison, make doggone sure it’s “apples to apples”.

    You’ve done an outstanding job of pointing out lots of important pricing factors people often overlook. We all need to buckle down, stay confident, avoid the tire kickers and freebie seekers and …

    Charge what we’re worth!

    Keep the good stuff coming our way! 🙂

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