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How to Calculate the Best Price for your Services

The best price for your services depends on the state of the market and your audacity.

If you are switching to freelancing services or simply decided to earn extra money, you will be asked about the cost of your services. You can fall into a stupor, but you want to sell at a high price and not lose a client. Therefore, you have to look for compromises.

How to find the best price?

It happens that one person asks for a service of 500 dollars, and another - 5 thousand. Both look at each other in bewilderment, because each thinks of a colleague: "Is it really possible to work for this money?"

The secret is that there is no fair price. The correct amount is the one that the customer is willing to pay. The price for which the performer is willing to work.

So, for your part, you must calculate how much you need, and then adjust this value so that you find the required number of clients for a comfortable life. Here’s what you need to do for this.

1. Find out the average prices in the market

This figure is needed just to understand how much your colleagues charge in general. Unfortunately, for everyone personally, this price does not mean anything, because there are too many variables behind it.

Let’s take copywriting as an example. There are venerable authors who charge several hundred dollars per text. But there are not so many of them against the background of people who call themselves copywriters simply because they wrote essays well at school. The latter are ready to charge 50 dollars for 1000 signs, and, naturally, they bring down the statistics. This will be the case in any industry. There are inexperienced people, there are simply inept people, there are pros with imposter syndrome who do not believe that they can be paid more. There are stars who take not only their talent, but also their self-confidence.

You need the average cost in order to be ready to justify your value to the customer and explain why you need to pay more. Because clients, too, often focus on average amounts. Although there are exceptions: some believe that the more expensive the better, but this is not always the case. To form your idea of average prices, study vacancies and thematic groups.

2. Calculate the cost of an hour of your work

First, you need to understand how much money you need per month. Ideally, this figure is made up of three parameters:
• how much you need for a comfortable life.
• how much do you spend on incidental expenses in the course of work: rent, electricity.
• how much do you need for airbag, investment, training, etc.

It is best to consider this in an annual perspective to account for intermittent costs and possible vacations. The resulting amount must be divided by the number of hours that you are going to devote to work.

The best price for your services is utopian. You may decide that you need millions, which means that an hour is worth at least $500. This will not work, especially at the very beginning of the journey. Therefore, it is worthwhile to adequately approach the calculations and accept the resulting figure as a goal to which you will strive.

It is important here that only you need the price of an hour of work, the customer does not need to tell it. The time spent on labor is not at all an indicator of its result. It also gives space to bargain: “Are you going to do this for two days? This work takes no more than an hour!’’ It is necessary to tie payment not to time, but to value, so it is better to take money for a specific result.

The cost of an hour of work will also help you choose projects more successfully. Let’s say you are offered one ten-hour project for 5000 and one three-hour project for 3000. Five thousand is more than three. But in the second case, you will have time for two more 3,000 projects or 7 hours of rest. If you are overwhelmed with tasks, sometimes it’s cheaper to take a break so that you do not run out of schedule due to overwork.

3. Rate the uniqueness of your offer

It’s time to collide the average prices and the cost of your hour. Let’s look at the situation from the side of the customer: why pay more if there is a crowd willing to work for a lower pay? So you need to convey what your value is. And here literally everything matters: the quality of work, and the speed, and the enthusiasm with which you respond to urgent tasks, and the ease of communication, and the willingness to sometimes do something beyond the terms of reference, and your personal brand.

In general, no one will figure out for you what your strengths are and how you will present them to potential customers. The cooler you are (and you can prove it with a portfolio and reviews), the more you can demand - it seems that everything is obvious here.

Knowing these three points, you can already calculate the best price for services, in which your expectations coincide with the wishes of the customer for which he is willing to pay you.

How to experiment with pricing

The best price you’ve calculated is good in theory. In practice, everything will depend on how adequately you have compared your skills and desires. And also on how much the situation limits you. If the refrigerator is empty and e-mail is not bursting with customer requests, you can reduce expectations and temper appetites.

If finances allow, it is better to occasionally fulfill expensive orders than constantly make cheap ones: the financial result will be the same, and there will be more free time. I’d rather scare the client with a big sum.

Does the customer agree to pay adequate money for a sensible result? If yes - welcome to work. If not, go to the stock exchange: there and for 10 dollars they will write any article, the question is just what to do with it.

It is also worth remembering that you do not set the price of your services once and for all. You can raise it if you become more competent or just want more money. The most convenient way to do this is from a position when you have many customers.
This approach allows you to gradually switch to more expensive orders and not lose anything in money.

Things to Remember

1. There is no fair price. There is an amount that the customer is willing to pay for the benefit of your work.
2. To calculate the cost of your services, you need to reach a compromise between your expectations, competencies and market realities.
3. As soon as there are a lot of orders, increase your rates.
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