If you are thinking about launching a service based business or you already have one and you have questions about pricing, you are not alone. When I first started my freelance writing business years ago, I had no idea what to charge for my services.
What follows are some of my top tips for identifying the right prices to charge in the outset or even as you grow your service based business.
Arming yourself with this material can increase your chances of success and make you speak more confidently when you are discussing prices with the potential client.
Investigate Your Competition
This might seem counter-intuitive, but investigating the competition and what they are charging will give you a general idea of the prices that the market will bear. You will find prices across the board including ones that seem well out of your reach and those that may seem underpaid.
Ideally you will investigate your competitors in this field and find a happy medium.
Consider Your Experience
If you have unique expertise or a track record of success in a particular field or unique education and training, you need to price yourself accordingly. An academic editor, who is in his or her final year of college, for example, likely wouldn’t charge the same hourly rate as a PhD.
Therefore, calculate your rate accordingly. Once again, it pays to check out your competition and see what other people with a similar background are charging.
Use the Time Method
I don’t recommend that service providers of any type begin to sell their hours indefinitely. It makes sense to charge an hours-based approach at the outset of your service based business, but you may ultimately wish to shift over to product packages instead.
However, when you are new to the field, using the hours-based approach allows you to keep track of all of the tiny work in a particular project and to get paid for it accordingly.
When you are new, you might not know how long it will take you to do a particular task, such as conducting somebody’s social media scheduling or writing a blog post.
Using the hours approach, will allow you to track your time and figure out what’s more feasible and this will serve you later as you raise your rates and shift away from the hour’s method.
Consider the Value
Far too many people providing freelance services especially fail to communicate their value to potential clients.
While yes, the client is at the end of the day receiving some type of a service, that service and your ability to manage it as a true professional has the potential to pay off in spades for the business owner. Think of it this way: I write legal blogs for attorneys.
They are SEO optimized, therefore, the price that I charge per blog is not just an hourly rate based on how long it takes me to do it, but it also factors in my experience as mentioned above and the fact that that one blog or a series of blogs could be instrumental in bringing hundreds of thousands or even millions of dollars to my client.
Because it requires a special background to understand this type of writing and to carry out the research to ensure legal accuracy, my prices tend to be higher than other freelance writers in different niches.
This is just one example to help you realize all of the factors that go into pricing your services accordingly. One old adage says that if you choose a price and throw it out there and get immediate acceptance from many people with no push back at all, you have priced yourself too low.
A similar adage goes that if you are fully booked, it’s time for you to raise your prices and if you have no clients at all, it’s time for you to lower your prices. As with most things, there is a happy medium here that can be achieved in which you’re earning a valuable wage for your work and your client feels comfortable paying it. Keep all of these factors in mind as you consider how you can price services in your business.