Lessons Learnt: 12 Months In Business
How To Price Your Services
15 January 2021
For me, the pricing of services was one of the hardest parts of running a business. To begin with, I didn’t have a specific method of service pricing other than asking myself, “would I be happy and motivated to deliver work for this fee?”
I knew that I would lose motivation to work with a client if their fee was too low, and it goes without saying that when you are unmotivated, your work suffers. (And your clients aren’t too pleased, either.)
I didn’t want to have any unhappy customers (it’s bad for business!) so in time I learned to turn down clients who could not meet a fee that motivated me. Other than that, my service pricing didn’t have much in the way of strategy.
Within the first 12 months of starting my business, I began to see flaws in my approach, and I began getting a bit more strategic around the pricing of services. Read on or watch my video to learn from my mistakes and figure out how to price your services with a bit more forethought than I originally did!
Pricing your services: Beware bad advice!
The entrepreneur space is filled with people ready and willing to give you advice on how to set prices for services. However, I’ve learned the hard way that not all advice is good advice when it comes to pricing your services.
Here’s some of the better nuggets of advice I’ve been given:
- Double your prices every time you take on a new client
- Charge for bulk sessions
- Offer different packages
- Calculate based on the project and charge based on value
- Offer to start with a paid strategy
Now, I’m not saying that all of this is bad advice, but it won’t necessarily work for you and your brand either. It’s too simple to apply blanket rules to your business and hope for the best.
Pricing my services: What I tried
I remember when it came to training my clients, I charged around £100 per hour, and as I took on new clients I slowly increased the fee every few months (from £100 to £150, £175, £250 and so on).
For services, I would work out what was involved, how much time I would need to spend, how much a freelancer would cost, and make sure there’s room for profit in there. However, this approach was a bit too simple.
Let’s check out what changes I would make if I was to do it all over again.
Pricing my services: What I’d do differently
To be fair to myself, I wouldn’t really change my approach to training clients. Choosing an hourly rate that keeps me motivated works for everyone.
However, on the service side, I would have put more effort into building structure around what I could do for clients, while factoring in costs. The reason I avoided doing this early on was that I didn’t want to appear to be offering generic packages that clients didn’t necessarily need.
If, like me, you want to avoid generic packages, you will still benefit from having a price calculator or standard packages that you can tweak for each client. This makes pricing your services much easier, and faster too.
By having a price calculator that works out your prices for you, you’ll have a reliable structure in place to help you price your services consistently. Even if you waver from what the calculator says, it’ll provide a baseline for pricing your services.
How I’m pricing my services today
At present, we have budget packages in place that are based on a calculator, these work fine for our smaller clients. We also offer custom packages for larger, more complex projects. We’ve found a good balance for pricing our services that allows enough for the individuality of our clients but keeps the process simple and fast!
It does help that I’ve now been in the business for four years, and in that time I’ve had the opportunity to speak with hundreds of customers and find out what our competitors are charging (always a useful benchmark). Over time, you’ll also receive (positive and not-so-positive) feedback, learn from pricing mistakes, and see what customer scenarios come up as you go.
When you have that kind of data and experience, pricing your services becomes a lot easier – so don’t be too hard on yourself while you’re learning!
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