Pricing is a hot topic that comes up A LOT when I sit down with business owners who are selling services. Clients ask “how should I price my services?”
Whether you’re a new business or a business that has a booming client roster, pricing is a constant evolution and super important to review regularly.
Why should you review your pricing regularly? Well, it’s one variable that affects your total revenue.
Your total revenue is important because it’s the number to look at when considering things like how much money you pay yourself, how much money goes to expenses, how much for taxes, how much can you take as profit or invest back into the business.
So here’s what you need to know about pricing your services:
- Consider everything that goes into providing a service. It’s more than just the time spent meeting with a client. There may be prep or admin time. You may outsource work to a subcontractor. You pay money for tools and resources to be able to provide certain things for your clients.
- If you price hourly, your time is valuable. Time that you spend with clients is time that you are not spending with your family, or doing the things you truly desire. That’s a big deal to be taking away time from what’s most important and spending it with a client. That’s expensive. Period.
- Consider value based pricing. I love value based pricing because it takes away the pressure of an hourly rate and prices your service based on the value that is being received by the customer. Your customer is not only getting your time, but they are gaining access to your knowledge and experiences. Think about how much time and energy it would take the client to get what you can give them in an hour.
- You being you = value. There is no other human on this planet that is the same as you. You have such a unique perspective, energy, experience, etc. Your best customers appreciate THAT and are willing to pay for it. Clients who care too much about price often end up being the biggest pains too.
- Maximize the value of a customer. Once you have completed work with a client, how can you help them next? What service can they purchase now to continue to work with you? Try offering a monthly retainer service. You provide ongoing value in exchange for a monthly fee. It’s a great way to create consistent work and revenue.
- Raise your prices and grow your team. As you look to scale, you will hit a point where you are making as much money as you can, based on the time you are spending in your business. You can raise your prices, and receive more money for the same amount of time. You can also hire a team to help you deliver services to your clients.
Don’t be afraid to set the prices that you desire, and ask for that money with confidence. This is easier said than done at first, but the more you practice, the easier and better you get.
After all, it’s worth it to have a business and a life that you love, and make sure you’re making the money you desire and have the time you desire to be the best version of yourself AND live an authentic and fulfilling life.