Juliana, how do I price myself?
Let’s not talk about breakeven points, overhead costs and operating model (you can call me for that). Pricing services is hard, but, we need to get over the emotions that come with it and start putting it out there and decide on the pricing model that makes financial sense to us.
I hate to say it to the ladies, but we are the worst. It’s the whole socialization of humbling values that have been instilled in you since you were a wee one. Guys, you don’t fall too far behind. You are an entrepreneur now, get over it. Own it. Don’t apologize for being “expensive.”
There’s all this emotional clutter that comes with monetizing your services. It’s like you are putting a price on yourself and for service providers, you are. It’s your discipline, your years of study and or practice. The amount of experience and crap you have to put up with to go out into the world and say, “This is how much MY TIME costs.”
A colleague of mine, Lisa Velazques who is a Love doctor, (I love saying that because it’s true) says that individuals either have a good relationship with money or they don’t. It encapsulates every dollar conversation I have. You have to start having a good relationship with your money, with yourself, and start owning your price point.
Juliana, But seriously how do you price your services?
The same you would a product – test the market.
It is the best way to start and in your field there will be a wide range. Your job is to figure out what components make that range, and then, where you fit in it.
For example: lawyers can get paid between 100 – 1200 an hour, and sometimes more.
Gasp. I know, mine charges me by the tenth of an hour. He is absolutely amazing: so, I pay.
Types of Pricing Strategies:
- Value-based pricing: Value based pricing is pricing strategy primarily based on the consumer’s perceived value. Unlike cost plus pricing, value based pricing does not take into account production costs, overhead expenses, indirect costs, etc. Rather It’s about how much customers value the services you’re offering. The fashion industry is one example of value based pricing where the products are driven by consumer demands, which helps determine pricing that customers are willing to pay.
- Cost plus pricing: This is about adding the desired profit margin after tanking into consideration the costs of goods and/or services. This involves adding all the costs (direct labor costs, other direct costs, business expenses, operating expenses, material costs, overhead expenses, etc) required to produce a product or service and then adding a fair profit margin to arrive at your final product or service prices.
- Competitive pricing: This is about looking at what your competitors are doing and the market demand for similar services or products and then trying to price accordingly.
ScaleTime’s Pricing Tactics:
- Figure out the market you want to cater to ranging from accessible to affluent.
- See what your competitors are charging in that market. There will most likely not be too keen to give out pricing to you, but you can always have a friend or associate ask for pricing on competitive services.
- Insert yourself in the market and start putting your price point in the hands of potential clients. If there is no pushback, you are probably pricing too low. If there are no buyers, chances are your price is too high for your offering or market.
- If you are not comfortable saying your prices, your leads will know, they will smell blood and they will pounce.
Pick a comfortable price point and stick to it. How to price your services? The way it makes perfect financial sense – No apologies!
You are the one that gets to go out into the world and say, “This is how much MY TIME costs.”