4 “Must Know” Tips for Pricing Your Services

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One of the worst moments in a business owner’s life
is that silent moment between when you quote your rate to a potential
client and his response. True, that hardly a second goes by, but it can
feel like an eternity.

“Will he hire me?”

“Did I go too high?”

And when he says “YOU’RE HIRED!”, a new set of doubts creeps over you:

“Should I have gone higher?”

“Did I lowball the price just to get a client?”

know the feeling. You’ve got the job, the project, the new client and
it almost always turns out to be more work than you thought when you
signed up for the task. Be sure that you know your worth and
communicate it to the client up front.

1. Know your worth.

you charge your clients hourly, how do you know what to charge them?
Did you pick a number out of the air? What was your rationale?

For those who choose to bill hourly, I recommend the following approach to determining what you charge:

(a) Determine what you want your salary to be.  How much will you take out of the company?

(b)  Add to that any subcontractor expense that you may have.  This is your “labor total”.

List out and then add all your expenses: advertising, promotion, rent,
self-employment tax, supplies, etc. This is your “non-labor expense

(d)  Add your labor total to your non-labor expense total.

(e)  Add in any profit goal you may have for your business.

(f)  Bullets (d) plus (e) equal your Total Required Revenue.

Divide your “Total Required Revenue” by the number of BILLABLE hours
for the year. Remember that you will not be billing 40 hours/week. The
result will be the amount you need to charge per hour to make your
salary goal.

If you bill hourly, take the time to complete the above exercise and, if necessary, increase your rates accordingly.

2. No haggling.

can be hard when you have few clients or need more money, but whatever
you do, do not haggle with your clients/prospective clients over your

You can haggle at a flea market. You can haggle for the
price of a house. You can negotiate (a.k.a. “haggle”) for a corporate
job salary. As a self-employed individual, you must not haggle over
your pricing. To do so immediately lowers your perceived worth with
that person and will set you up for a relationship of nitpicking over
every nickel and dime.

3. Provide a “solution” and not a “service.”

your clients understand the benefits they will receive from hiring you.
You are not providing them a service; you are providing them a solution.

difference being that people value solutions more than they do
services. Whenever discussing price with a potential client, focus on
the benefits, the “solutions” that she will receive as a result of
hiring you.

Will she have more free time?  Will her business see an increase in profits or clients?  Know the benefits and speak to them!

4. Be prepared to say “Goodbye”.

everyone is going to accept your terms. Deal with it. They weren’t
meant to be your clients anyway and would have just taken up the time
that you could use for a better qualified client. Save your time and
energy for those who recognize your worth – you’ll both be happier and
more productive.

Pricing your services is one of the most
emotional things you’ll do as a business owner. Be sure to take the
time to review the project at hand before just blurting out a price –
doing so will save you a lot of time and frustration down the road.

Leading small business expert Sandra Martini is the
"Automatic Business Coach." Sandra delivers simple proven, yet
innovative, ways entrepreneurs can implement processes and systems to create a
waiting list of clients while giving them more money, time, and freedom in
their businesses. For free articles, free resources and to sign up for her free
audio mini-seminar "5 Quick & Easy Ways to Put Your Marketing on
Autopilot" visit www.SandraMartini.com.