Pricing yourself is one of the hardest parts of owning a business. Charging too much or too little causes stress.
What if you're charging too much? You could be missing out on inquiries and clients. It can put you in a part of your industry you may not be just ready for yet.
But if you're priced too low, you'll be busy but with clients that undervalue your skill and work. They usually steamroll you because they don't see you as the expert you are.
So how do you actually price yourself in a way that doesn't hurt your business?
I promise, pricing can be simple!
There are multiple factors when pricing my offers that I've discovered and used over the last few years. They've been helping me so much to not only feel like I'm priced correctly in my market but when I tell a potential client what their investment will be, I'm more than confident to let them know. So let's dive into the ways you can feel like a pricing badass.
Note: We all are on a journey called business ownership. Your pricing is gonna change a lot over this time. There is no shame in starting at a lower price point and working up from there.
Before we begin: Do not look at other people's pricing. Don't do it!
I'm so guilty of this in the first 3 years of business...it's just how long it took me to figure this one out. Looking at what others charge in your industry or niche does nothing to get you closer to finding your price. There's only 2 ways it can go: you think, "I'm more experienced than her, how is she able to charge that much?" Or you've got the other side of the coin. "I have more experience than her and she's priced this low, so I can charge this much more."
This is different than checking industry standards. But direct comparison to an individual just leads to uncertainty when you're working through your own pricing. If you look outside your business too much, you'll never feel like you are charging the right amount. Depend on you. Focus on your needs. So let's breakdown how to do that.
1. How much experience do you have?
This is sometimes a tough question to ask ourselves and give a truthful answer. We wouldn't be in business if we didn't think highly of ourselves. I mean you pursue your passion and decide to make a living from it. That's an amazing feat! But are you newer in your industry? Have you sought out additional education? Are there ideal clients in your portfolio?
It's hard to admit that we may not be ready to charge premium pricing, but understanding why helps you to seek out the elements you may be missing. You can take some courses, create concept portfolio projects, and connect with others in your industry you look up to, building your network with inspiring people. This is a great way to figure out your hourly rate, too.
2. How much value do you give to your clients?
When we think of value, we think of what is included in our packages. "I give a client x, y, and z and that is how I'll price this package." Most people in the same industry offer the exact same things. How many photographers offer albums as add-ons? How many brand designers include collateral design? There is so much overlap on the deliverables, that is not where you'll stand out. You should definitely begin with what you offer. But then you need to think about how you offer those items.
When pricing my own packages, I began with my deliverables. Then I looked at my process and the way I worked with my clients. I use a client dashboard that streamlines our entire process. Also, I provide strategy which most website creators don't offer. Finally, I make myself available so that I can answer clients as quickly as possible. And after I finish a project, I stay in touch and offer clients time to help with their maintenance if it's a bigger change than what is covered in their personal tutorial video. I know the experience I provide is worth more to my clients. The people that want to book me are busy and need a simple journey through their project, and I'm able to provide that.
For this step, think of ways you can either add on unique offerings in your packages that further help your clients or how you can make the whole timeline working with you simplified and enjoyable. The experience you create is key.
3. Does your business live up to your prices?
Investing money back into our business sometimes feels like it doesn't make sense. You're trying to make money, am I right? But here's the thing. You want to raise your prices and charge more. When you think of brands that you're willing to dish out the big bucks for, do they have a DIY brand? Is their website a template? Do they have unfocused messaging and badly lit photographs in their marketing?
Your brand matters so much. Not just the brand visuals. Your website, message, images, strategy, mission...it all matters. When you invest in your own business, you will see a return on your investment. Whether it's a full visual refresh, coaching, or courses, you're adding value to your business and to the clients that work with you. Subpar branding can sap all the confidence you have in your business. No one wants to book someone that feels embarrassed sharing their pricing. Elevate your business in order to elevate your prices.
4. How much do you actually need to make? Is it time to raise your prices?
This is the big one that brought me the most clarity. Ask yourself: how much money do you need to earn to live the life you want right now? I bet your number is smaller than you think. But this helps so much when factoring your current pricing. The first goal is to make enough to support yourself where you're at. (Note: if you have a partner with a second income, you'll have more wiggle room with this method.)
- First, you'll want to figure out what you need to make each month in money paid from clients, products, affiliations, etc. Don't forget to take into account your business overhead, savings (for retirement, emergency fund, etc.) and taxes.
- Second, take a look at your current packages. You'll want to divide your ideal monthly income by the price of your lowest package (it is best to bank on people booking the lowest one always so when they book higher paying packages, you're making a profit from those bookings). This will tell you how many new clients you'll need to book a month to get to your ideal income, after subtracting the money you know is coming in (like from current client's payment plans).
- Third, look at your calendar and (based on how you schedule new clients, this will vary for everyone) ask yourself: How many clients will need to overlap for me to make enough money every month? Does the answer make you break into a sweat or feel relief?
If you're feeling overwhelmed and don't want to work 24/7...
It's time to raise your prices. The best way to do this is gradually but quickly, reaching where you need to be by 6 months out. Incremental raises (for instance, a bit each month) will get you there without a giant jump.
If your current pricing is enough to live on...
That's wonderful news! But let's still get those prices up to help you make a profit and start building wealth within your business. Refer to the first 3 elements and work on improving your skills, value, or brand (visuals, strategy, website, photography, copy...you get the idea) so in 6 months, you can raise your prices to align with your new approach.
This formula is simple and has a lot more possibilities, but with this piece of the puzzle along with the other factors, you will get to a price that you feel confident about and know that you're charging an appropriate amount to have a fulfilling business.