Are you charging too much, or too little, for your time? How much should you charge? How do you set prices in a service-focused business, such as writing, consulting and more? This presentation shares five important tips for setting your prices.
Tips to help you price for more profit!
Presented by Jeanne Grunert
How much should you charge?
Do you know how much you need to make per hour,
per day and per week?
Do you know how your prices stack up against your
Do you use pricing for strategic advantages?
Are you charging too much?
Are you charging too little?
Know What You Need to Make
To determine how much you need to make per hour (your
pricing baseline figure), follow these steps:
Determine how much in total, before expenses, you need
to make each year to stay in business (gross amount).
Divide that figure by 50. There are 52 weeks in a year, but
let’s assume you take 2 week vacation.
Now divide that figure by 5 days in a week to determine
how much you need to make each day….
And divide THAT number by 8 hours in a day. That’s the
bottom line of what YOU expect or need to make per hour.
How does that stack up against your competition?
What is the industry
Visit trade associations
and industry groups
Look for news articles
How much are your
Search their websites
Look for pricing info
Start a spreadsheet to track your competitors’ rates and industry rates.
Average the prices together, weighing factors for experience, education and
The more education and experience, and the better the results achieved, the
more you can charge.
Pricing for Strategic Advantage
Don’t create sales events for a service-based
business…can make your business seem
cheap, ill-conceived, like a rummage sale
Instead, bundle groups of services, bundle
hours, and offer discounts for prepayment
or locking in services ahead of time.
Consider introductory offers at a lower
Try not to get into pricing wars with
competitors…you’ll end up losing.
People judge service consultants based on
price, with the perception that expense =
results. Rock bottom prices are often a
disadvantage to service-based businesses.
Are You Charging Too Much?
If clients are saying, “I
can’t afford you….”
What they are really
“I don’t see the value”
“You are not a good fit
for my budget”
“Will I get the results for
Charging Too Much?
Rarely do people charge too much.
It’s probably more about the client’s budget OR
You are not making a strong enough case for the
benefits your services bring to your clients.
Always sell from the benefits you bring to your
service…how do you help others? What results do you
achieve? Can you quantify those results with statistics,
testimonials, case studies?
Charging too much…perhaps underplaying your value!
Charging Too Little
How do you know you’re charging too
You’re working day and night but still can’t
pay the bills.
People remark on how “cheap” your
services are (ouch).
You resent your clients because you
constantly feel like you’re not making
enough for the time and effort involved.
Your prices are significantly (20% or more)
lower than others in the industry with
similar skills and experience.
Ideas for Raising Your Prices
How to raise prices without pissing off your clients:
Decide whether or not you’re raising prices for all
clients or just some;
Tell them in advance in a gentle way;
Offer prepayment discount to soften the blow;
Raise prices GRADUALLY. Don’t sock them with a
huge increase at once.
Be prepared for the possibility of losing clients.
Keep prices the same for long-time clients, raise them
for new ones.
Make a Case for Value
If you ask for a penny, you’ll get a penny…
Know the industry, know your competitors’ prices,
and make the case for VALUE – the benefits to bring!
For More Help
My new book, “Pricing
Your Services: 21 Tips for
More Profit” shares these
and other ideas for
setting your prices and
charging what your time
is worth. Available on
and your favorite ebook
retailer. $3.99Visit: 21tips.us
Award-winning writer, blogger, and marketing consultant
Seven Oaks Consulting
Business writing and ghostwriting