One of the biggest struggles I see small, service-based business owners worry about is how much should they charge.
Many sources I’ve read about, with regards to setting prices, have elaborate formulations that you can use to calculate how much your expenses are, how many hours you want/or are able to work, how much profit do you want to make, etc. Or cost + overhead + a marginal profit= how much you should charge.
If you’re lucky, it will amount to number that you could probably live off of. On the other hand, you might be surprised that the number is too high and you’re afraid of charging that much for your services.
My guess is that many of you are charging too little for the services you provide.
If you are worried about charging too much for your services, are you looking at what you do as a commodity?
If all you’re worried about is what people will think of your prices, then they’ll view you as a commodity – where everything is based on price.
I’d like to challenge you to look at this differently.
Look at your service as how it improves the life/business of your client. Does what you do save them time, save them money or improve their lives/business?
What price do you think they would put on that? Start looking at what you offer as far as results for the client and base your pricing on that.
Price your services based on the results and value that you provide and you’ll move yourself out of the commodity market and into the value-based pricing model that will net you more money, higher value clients and a business that you’ll love!
Your “To Do” item for the week Look at the past clients you’ve helped. Are you able to quantify an increase in profits, saved time or other benefits that you can put a value on? Re structure your fees accordingly.
If you feel uncomfortable with charging current clients these new fees, start with any new clients you take on and then slowly move your clients into these new packages/pricing as they have new work for you.
Share in the comments below: Do you feel that you’re stuck with your prices because you think your clients won’t work with you at higher rates? Have you had success raising your fees? Share your thoughts. 🙂