Pricing has got to be one of the HARDEST things to do for your service based business. Let’s breakdown some options for pricing your services.
Not sure how to even come up with a rate for your services? Check out my post on the 7 Steps to Pricing before digging into the options I will be presenting below.
You know what your prices need to be, now what?!
Here are 3 ways to price your services for success! Of course any and all pricing options need to take into account your expenses and desired profit margin.
Hourly Pricing Option
Charging by the hour is one of the oldest tricks in the book. This is an easy way to know what you are making hourly compared to a similar employee role and earnings.
I do suggest service business owners that are starting out to price their services by they hour to gain data and analytics on project timelines and project related expenses.
Sometimes when clients/customers see an hourly figure, they are more likely to make comments on your rate.
Remember to always be confident in your rate!
Service Rate Pricing Option
Pricing based on services is just as it sounds–all services have a cost associated with them.
Example: A social media manager offers (1) Pinterest Services, (2) Facebook Services (3) Instagram Services
This can be a great way to price, but if you are regularly quoting several services to each client, the next pricing may be the best option for you.
Packaging or Bundling Pricing Option
This has been a game changer for my service business! When clients see a long list of broken out services/cost, they tend to experience sticker shock.
Think about it–When you go to by a car there is one price on the window. If the dealership broke down all the parts by price, you would be less interested in buying a new car. Instead, you can justify ALL that you are getting for that ONE price.
Use that same idea for your business. What services can you bundle to create packages?
Example: Maybe you install HVAC systems. You could offer a package to your customers who get new systems installed. The package could include the install of their new system and 12 months of service and repairs. You are able to upsell your your repairs and service by bundling into a package!
Whatever route you decided to take for your pricing, run the numbers and ensure all costs are covered and profit margins are built in!
For service rate/bundling I recommend working backwards! Figure out the hourly rate you need, estimate the time spent on service/package and add additional markup to the price as you see fit or as your industry allows.
You can always use websites like Glassdoor to find industry averages for similar employee position.
REMEMBER: As a small business (not employee) you have additional taxes to pay compared to an employee. Don’t forget to consider those when pricing!
Let me know in the comments how you price your services!