How to Determine What To Charge
When figuring out how much to charge, most entrepreneurs position themselves too low and underestimate their value. Don’t do that! You have worked too hard to make less than what you are worth. You can create a price that shows your value, gets you what you want to make and allows you to feel confident in sharing your pricing. We have thought of the steps you need to complete to get that money in the bank and expenses appropriately handled for your business!
1. Start with how much you want to make.
The number one question is, how much do you want to make to live the life you WANT? Don’t limit yourself here. It is okay to dream big and think bigger. When coming up with this number, don’t think about want you need to survive, but how much you WANT.
2. Take into account all of your expenses + write them down.
It takes money to make money, honey. Things like client management software (such as our favorite, Dubsado) or rent for your coworking space - these count as expenses. Look over your bank statements to figure out the costs you have for your business. Write them down! If you are having trouble figuring out if an expense can be classified as a business expense, check out this helpful resource from the IRS.
3. Do some research on people in your space (you don't have to price the same way, but you need to know what's out there).
Do some market research. Check out websites of people in your industry and take a look at their pricing. Determine the low and high end of that spectrum. When referencing these websites, take a look at their portfolio or service offerings. See how your skills and experience level compares. If you see a lower quality offering compared to your stuff paired with a hefty price tag, it may be something to consider with your pricing.
4. Understand the ROI for your client.
What are you offering your client? Things like peace of mind and personal time are priceless. You need to have specifics to back up your pricing. Working through this helps with your confidence level when you drop that price point during a discovery call. What you’re offering is valuable, don’t forget that.
5. Work backward.
Bring all of these steps together and work backward. Incorporate your added value with the amount you want to make. Don’t forget those expenses and add a little bit of cushion for unexpected expenses. Don’t overcomplicate it - the numbers will speak for themselves.
Time to grab some pen and paper. Don’t forget a calculator! You may want to run the numbers a few times to make sure your math is spot on. If you have a trusted friend or mentor, have them check it out as well. Talking with someone gives you a chance to practice how you are going to present your pricing, too.
This is your business; you are a major factor (if not THE only factor) in determining how much you make. Don’t sell yourself short!
At Mavenly + Co., we focus on helping women work for themselves. From free resources and podcasts to private coaching and events, our team is here to help you take your career + business to the next level. Whether you are a freelancer, side hustler, or full-time business owner, we want to help you succeed in your work. Want to learn more? Click here!