As an entrepreneur, one of the most challenging aspects of running your own business is how to establish fees. It is a delicate balance between earning what you want and having your clients feel satisfied in what they are paying while also still feeling a little bit like a kid in the cookie jar, getting away with something that’s not really bad. Today, I will share with you the fundamentals on how to establish fees and tweak them over time.
Being Clear on What Money You Desire
Before laying out prices and offers, you must be super clear with yourself on the money you desire. Creating intentionality for your pricing is a crucial component to growing your business. When pricing your services, you must stop guessing and start evaluating.
I encourage you to take the time to evaluate your current average living expenses. Remember, your salary should be able to cover all your costs, your savings goals, an emergency fund, and fun money too. There is no specific answer to this, as it varies depending on the person and where they live.
Once you have that dollar amount in mind, you will need to play with various pricing models to ensure that you can get to that goal.
Per Hour / Session
The most common pricing model we see in everyday America is the hourly wage. You can charge your clients a particular amount per hour of work. Another similar concept is per session. If you meet with your clients as a coach or advisor, you can charge "X" amount per session.
- 40 hours a week at $40.00 an hour ($6400ish a month)
- 20 sessions a week at $100.00 each ($8000ish a month)
The problem with this pricing model is that there are only so many hours a day or so many sessions available, meaning that you will eventually max out your income. This is because you simply don't have enough time, AND you certainly don't want to cut into the valuable time set aside for your family, friends, and personal time.
An alternative is a per package project method. Packages often provide the client with specific services from you (such as coaching or business aid) as well as a variety of guides, info sheets, items, and other materials. The perk for you is that you only have to make those other materials once, but you get to use them again and again.
When creating packages, you want to provide different tiers of offers, with each tier higher providing more and more perks to the client. We recommend having the following offers:
- Free opt-in offer (to hook new clients)
- Small, entry level offer
- Medium level offer
- High level offer
- Signature offer
For more information on how to structure your tiers, reach out to me for my “Setting Your Prices” guide!
Tweaking it as You Learn
Even the best evaluations and critical thinking don't always mean results. A quick way to know if your pricing is off is by how people are responding to it. If you hear nothing but crickets, you are likely asking too much. However, if everyone and their brother want your services, you will likely be priced too low. As you learn and see results, you can tweak your prices until you find the happy medium.
Increasing Rates Over Time
One last note I want to touch on is remembering to increase your rates over time. Often, freelancers or entrepreneurs feel weird asking for a raise or increasing their prices, but it is a part of the business. With the rise of inflation and the continued development of your skills, you will need to raise your rates on an annual basis to ensure that you are getting adequately paid.
Go Confidently in Setting Your Prices
Do you want to bounce ideas on what prices to use, which packages to offer, and how you can increase your rates without losing clients? Book a call with me today to discuss your options while accessing my handy Setting Your Prices guide.