Knowing what to charge your clients can be a difficult task. Pricing a product is much easier than pricing a service, as how do you go about putting a value on your time and efforts?
When pricing a product you need to take into account all of the associated costs such as manufacturing and distribution costs and simply adding a percentage mark-up, which could be anywhere between 50-100%.
When pricing your service it’s important to know your worth and communicate your value. You have to find a price that is both worthy of your efforts and yet is something your customers are going to be willing to pay you.
You need to ensure you value your offering but remain realistic. Price yourself too low and people won’t value what you have to offer. But be careful not to mark your prices up too high so that your niche are unable to afford you, or can find better value or quality for that price elsewhere. Customers need to feel they are getting value for money but should feel satisfied paying for your expertise.
You can increase your prices as your business grows and you gain more experience and expertise.
Things to consider when pricing your service
Think about how long it will take you to work on this project.
What resources will you need to use and the associated costs.
Look at the overheads you’ll need to cover, for example, travel costs, rent and utilities, telephone charges, postage or delivery charges etc.
You need to think of all of the variables involved and put a price beside each of them.
It’s also worth researching what your competitors are charging but only as a guideline. You shouldn’t try to compete on price. Try to offer more value then your competitors which will allow you to justify your pricing.
You then need to decide what you would like your annual salary to be, and roughly work out pro-rata what this equates to depending on the amount of time you will spend on each client.
The standard is then to add between 10-20% profit on top of this figure.