When you charge a fixed rate, a pricing strategy is part art, part science, and part wine. Trust me; you need the third one to take the edge off.
In short, there’s not a one-size-fits-all formula for setting your project rate.
Creating a pricing strategy takes time, thick skin, and loads of flexibility. What you charge this quarter may not be what you charge next quarter. Your rates may not be the same as your competitor’s (or business bestie’s) rates. And you may have one customer who thinks you’re reasonable and another who doesn’t.
And that’s OKAY!
Every time you create a new proposal or start a project, use it as a learning experience to help grow your pricing strategy. How did the client react to your pricing? Did they receive the value they expected? How about you? Do you feel you were appropriately compensated?
First, let’s lay a foundation for your pricing strategy. We created a few blog posts to help you:
You can also check out these articles for setting goals and establishing a consistent income:
We recommend reading those first or at least very soon after you read this post. Then, continue below to learn how to assess how your pricing strategy to see if it matches up to your income goals. Please note, the advice here is mostly for project-based pricing.
This list should include everything from responding to emails and meeting a client to rounds of revisions and footer copy. Each piece is valuable. And this list will give you a better idea of what your client is receiving versus what you’re accounting for in your project rate.
Review the list you made above. Beside each item, write down how much time you need to complete it.
Then, for at least 30 days, use a free time tracker, such as Toggl. From the moment you sit in front of the computer or leave the house, track your work time. Compare your list to the actual time worked.
You may be surprised to find you’re making $25 an hour when you aimed to make $50/hour.
When you have your base pay in mind and know how long each project will take, you can confidently reset your project rates to better fit your needs.
Will this be enough to cover your business and living expenses? If not, you may need to consider raising your prices more. But, keep in mind, there’s only so much you can inflate your prices before clients stop paying.
Hopefully, these easy steps will help you evaluate your pricing strategy to see if you’re charging too little or too less. And if your rates can support your budget.
It may take time to hit the sweet spot. In the meantime, don’t be hard on yourself, track your time, and re-evaluate after every completed project.