Packaging & Pricing Your Services
Being a service based freelancer isn’t easy but it is oh so rewarding. Being your own boss is something many people dream of but you’re either doing it or you’re on the way to full time entrepreneurship.
One of the most common issues freelancers seem to face is how to package and price their services. Constantly we question ourselves and convince ourselves that no-one will pay the price we are asking. But you know what, they will!
The fact is, people will pay it. It’s likely that their target audience will be completely different but my point is that there is someone out there for everyone. That’s where defining your ideal client comes in.
When you set your prices you need to believe in them. You are worth every penny of what you charge but if you don’t believe that, then chances are your clients won’t either.
WHAT SERVICES ARE YOU OFFERING?
Hopefully this is the easy bit. Whether you are a new business or you have been in business for many years, you should know what services you can or are offering your clients. What you need to do now is break each service down and write out everything that is included. From the initial enquiry, to drawing up the contract, to setting up systems, to doing the work, to delivering the work. Write down every single step of what’s included in each of your services.
HOW LONG WILL IT TAKE TO COMPLETE THE SERVICE?
Once you’ve made a list of everything that is included in your service, make a note alongside each broken down element of how long each item will take. So many people forget to include parts of the service such as the initial enquiry and raising invoices so be sure to include these. Once you have an idea of how long each item will take you, it’s now time to work out how many clients you can realistically work with per month. For example, say you have a service that takes 2 weeks to complete, you know that you can book two of these services each month. Be sure to allow time for internal business work such as marketing and accounting when working out how many you can realistically work on.
NOW IT’S TIME TO WORK OUT THE PRICING
You’ve listed out your services and worked out how long each one will take, now it’s time to work out what you want to charge.
One way do this is by working out what you want to be earning per year and then working backwards from there. So say you want to earn $75,000 per year. That breaks down into $6,250 per month however doesn’t allow for any time off for holidays etc… You know that you want to take 4 weeks holiday a year so you now need to divide your $75,000 by 11 instead of 12 which totals $6,818 per month. This means that in order to work on two projects per month, you need to be charging around $3,409 per project.
Another way to work out your pricing is to give yourself an hourly rate. Let’s look at another example. You want to be earning $35 per hour and you want to work 6 hours a day, 4 days a week. This equals a day rate of $210 per day and a weekly rate of $840. Times your $840 by two and that gives you $1,680.
See how different the two prices for the same service come out. This is why you should never compare your price to that of a competitor, everyone’s personal income needs, hours of work and experience levels are completely different.
- What is your ideal yearly income?
- How much vacation time would you like yearly?
- How much would you need to make per month?
- How much would you need to make per week?
- List your services.
- Write the amount of time each service takes to complete.
- Write the price for each service next to the line item.
Set a monthly booking goal.
For example, if you want to make $5,000/month and you are selling a course that costs $297, your monthly booking goal is $5,000/$297 = 16 New Student enrollments per month needed to reach your goal.