Learn how to price your services so that you are confident enough to pitch your services to your ideal client.
Before we get started, let me give you my own biased opinion. Do not charge hourly.
The reason being that when you charge hourly, you need to know exactly how many hours it takes you to complete a project. Knowing the exact timeline helps set expectations for both yourself and your client.
The problem arises when the project goes outside of the estimated timeline. You may have underestimated how long it would take, or your client may have a lot of questions or revision requests that drag the project on.
Now you are working overtime without getting paid, and you’re starting to resent the project. No one likes working for free.
Or you decide you deserve to get paid overtime, but now your client is upset because they were not expecting to be paying more for your services when the deliverables remained the same as initially agreed upon.
By charging a flat fee per project, you avoid the uncomfortable conversations that can arise from charging hourly.
Now the question arises of how to narrow down what to charge for a specific project.
Pricing Step #1
First come up with your hourly rate. Although I do not recommend charging hourly, you do need a baseline to calculate your flat fees from.
One of the easiest ways to come up with an hourly rate is to charge what you are already being paid at your full-time job (or what you used to be paid if you’re not currently employed). This will be your going rate. With time you can increase your hourly rate as you become more comfortable or experienced.
Once you have your hourly rate set, start thinking about how long it would typically take to complete a particular project. Make sure you take into account any research, emails, client calls, invoicing, etc. in addition to the actual task you’re being hired to perform. Do a trial run and track how long it takes.
Imagine it takes you 8 hours to perform this imaginary project. Now add a couple more hours to account for unforeseen obstacles or revision requests. Let’s say you’re now at 11 hours.
Assuming your hourly fee is $35., multiply that by your hours for a total of $385.
Pricing Step #2
Now look at your number and ask yourself, does this represent the value that I am providing?
In order to answer this question you will need to understand your ideal client and what it is that you solve for them. If you determine that the value you provide is much more than the price you have arrived at, then change it.
Let’s say the value you provide based on your current expertise is $500.
Pricing Step #3
Next thing to consider is your comfort level with your new pricing. Picture yourself having a conversation with a potential client or a friend. You have just explained what it is you do and it is time to talk about money.
Does this make you feel uncomfortable? Did you cringe at the thought of naming your price? Were you worried that people would laugh at you?
If you are not able to name your price confidently then it’s time to re-asses and adjust it accordingly.
Let’s say your comfort price is $420.
You are now ready to start promoting and pitching your services.
If for whatever reason you have reached this step and you’re still not sure you have the right answer, take a day off and start the exercise again tomorrow.
Things to consider:
Make sure whatever it is you are charging covers any fixed costs you may incur throughout the year in order to do your business. This can include but is not limited to fees paid to maintain your website, as well as subscription fees for special software or other platforms.
Do a little bit or market research on what other individuals within your field are charging after you have completed this pricing exercise. The reason to do some research after is because you don’t want it to influence what you are charging all that much. But you do want to make sure that you’re not entirely out of the ballpark, at least not when you’re first starting out.
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