5 Stress-Free Steps for Pricing Your Services
“Why does pricing our services provoke such fear and dread?
Even when we’re certain that we provide an exceptional service and charge what we’re worth, we still worry that clients will view our prices as unreasonable.
Of course, we don’t want to underprice our services, either.
Where does this leave us?
Most of the time, it leaves us paralyzed and stuck. So when it comes time to actually give a prospective client a price estimate, we often just take a wild guess.
That’s a huge mistake.
To help you calculate your service prices accurately, I’m going to share a step-by-step method for setting your project rates.
Let’s get started.
Step #1: Perform research and determine your hourly rate
The first step in figuring out your rate is researching the project and asking yourself critical questions (examples below). These questions help you clarify all the details of the project.
You’ll also use the information you gather to determine your hourly rate, and that’s the starting point for the entire process.
Quoting a project rate, rather than an hourly rate, helps protects you and the client.
When you carefully consider your project price, you’ll be able to work comfortably until the project is completed — and you won’t be penalized if you finish faster than anticipated.
And because freelance services are notoriously variable in cost, your client will appreciate knowing their fixed cost going into a new project.
Why, then, do you need to determine your hourly rate if you’re going to quote a project rate?
Your hourly rate is the first variable in your project price. Your client doesn’t need to know this rate — it’s for your own calculations only.
During this step, consider:
- The project scope. Make sure you have a clear understanding of the client’s expectations and your role in helping him meet his goals for the project.
- Whether or not this project will lead to ongoing work. Is the client already talking about additional projects he’ll need help with, or is this a one-time assignment?
- The client’s budget for the project. Carol Tice, a freelance writer and founder of Freelance Writers Den, recommends inquiring about the budget for a new project. Clients won’t always have an answer, but when they do, it gives you a great piece of data to work with. Carol also adds that asking about the prospective client’s budget helps you weed out low-paying clients who don’t value your services!
After you’ve researched the project, your role as the service provider, and the budget, determine an hourly rate. This is the first component you’ll use to calculate your project base rate.
Step #2: Estimate how many hours the project will take
Break down the project into parts, and then estimate how many hours each part will take to complete.
Add up the hours for each part to get the total number of hours for the entire project. This is the second component you’ll use to calculate your project base rate.”