How To Price Your Services
The starting steps to help you perfect your pricing strategy
So, what is your work worth?
Are you able to confidently answer this question? Do you feel well-prepared for putting your work out there, with the knowledge of how much to ask for it? If you’re not fully comfortable with this aspect of self-employment, don’t you worry. This is a difficulty that everyone, in every field of work has to tackle in the beginning. That is why we’re here to help you.
In this brief article, we will illuminate the ways in which you can better understand and determine your work’s worth, and prepare a pricing plan which fits both you and your client’s needs. The challenge of asking for a good price, without undermining your efforts or overestimating your abilities, is just that – another challenge. But, as a freelancer or a business owner, the very essence of your work is to challenge the status quo, so you are most certainly ready for our advice.
How much does it cost you?
Before we look into your sales strategy and closely analyse the market you’re about to join, we need to understand the cost of your work. Please bear in mind that these ‘costs’ are not only financial, but also relate to your time. So, let’s investigate just how much time and money you actually need to spend for your work to bear fruit.
First, recognise and evaluate the monetary outlay of your work. Do you have to pay for any materials or subscribe to services in order to do your job? If your project, regardless of its price, requires the purchase of resources for, let’s say, £20, then you will have to take this cost into account when working out your profit margin. What is a profit margin, you might ask? This is the total revenue minus expenses that you’ll likely acquire when successfully delivering your work. Thinking of your expectations, you should adjust your price accordingly. How much do you want to get paid for your work? If your goal is to earn £15 and your cost of resources is within the £20 bracket, then your price has to be above the £70 mark for your earning goal to be met.
Secondly, consider your time. How long does it take you to deliver this project? How many hours will you spend working before your job is done and dusted? Be respectful of your time and remember to take this into account. After all, time is all we have in this world. Understanding this, you’ll be able to set your price in a way that gratifies your efforts and best appreciates your time.
So, before you choose a price, understand your costs – both monetary and time related!
How much does it sell for?
Okay, so you now know how much you need to spend (time and money) to deliver your quality service. Now is the time to think about the average pricing for such products or services within the market you’re operating. After all, you won’t be able to earn anything if you don’t find clients willing to pay for your work. That is why considering the market’s pricing is crucial.
When thinking of your sales strategy, you need to factor in these two aspects – your customer’s pocket and your competition. It is necessary you understand your core audience well, as they are going to be the ones to purchase whatever it is that you’re offering. Consider their financial position, the ways in which they choose their desired price, and their willingness to purchase high-quality goods instead of cheaper, low-quality ones. Become one with your audience by recognising their needs, demands, or struggles, which might get in the way of them purchasing your service if left unaccounted for.
Secondly, it is essential you price your work competitively. This means, assuring that you analyse the pricing strategies of your competition and adjust your approach to match them up, or even better them. Take time to understand the market by noticing trends, finding out the most popular products, and observing the way in which your competitors make their sales. Although this might not be the easiest task to perform, it will prove to be worth your time once your service is available on the market.
So, before you choose a price, understand your customers’ needs, and recognise your competition!
What is your plan?
Finally, with both sides of the coin in mind, you have to craft a sales strategy. Make sure to apply your knowledge of the customers and the competition when creating your plan. Remember to address your customers’ most vital needs, whilst recognising the relative weaknesses and strengths of the competitors operating in the same market.
Design a strategy that will allow you to enter the market with a strong, competitive offer and a flexible approach to pricing, meaning you should be ready to make changes as you go along. It is commonly known that value generally increases with time, especially with the added value of your increasing experience. That is why it might be a good idea to price your work slightly lower to start with, and once you’ve made a few successful sales, readjust this pricing to reflect your gained credibility and skill.
So, craft out the initial sales strategy and keep perfecting it to stay on top of your game!
Just get out there!
With the few points made above and a plan you’ve thought through, you are ready to land that first assignment. The only thing that is left to do is just that – get out there and land it. Be patient with the process, trust your intuition, and do not hesitate to change the approach as you go along. Afterall, it’s often said that ‘insanity is doing the same thing over and over again and expecting different results’.
So, get your prices in order, stay flexible and vigilant, and conquer the market!
What is next…
Now that you’ve got to work with your pricing strategy, maybe it’s time to really nail down your overall budget? Take control of your freelancing finances as Kira Majchrowska takes you through the fundamentals of carving out a successful career on a limited budget in her piece, Freelancing on a budget. Ready to get selling right away? Register for an account at Revolancer and start your freelancing journey for free!
Freelance marketplace: Revolancer