Pricing for wimps: 11 questions you must ask yourself before setting your prices
What’s the secret to setting and getting the right price? Put on your big person pants and be the boss of your price, says Julia Bickerstaff.
You started your own business for a reason: to make money working exactly the way you want. But for many soloists while creating the wheels to work comes easily, knowing how and what to charge our clients can be surprisingly challenging.
Julia Bickerstaff is the founder of The Business Bakery, a business designed to help people improve the profitability of their businesses.
Here are her top 11 questions you need to answer for soloist pricing success:
1. How do I create my pricing strategy?
A good pricing strategy is one of the most effective paths to a profitable business. Here’s how you build one from scratch.
"Sometimes the dilemma is not what to charge, but rather having the guts to charge it. "
2. How do I calculate my hourly rate?
As a soloist, how do you determine what your hourly rate should be? Use this simple three-step formula to help you work out the minimum hourly rate you should be charging.
3. How do I ask for the price I actually want?
With pricing, sometimes the dilemma is not what to charge, but rather having the guts to charge it. So take a deep breath and consider these main points.
4. Should I charge the same as my competitors?
Keeping an eye on competitor pricing is essential as it gives you a useful benchmark, but that is all. Charging the same as competitors could cause you to under- or over-charge because your offering isn’t the same. Here is how you can price with reference to your competitors.
5. What four-letter words should I avoid at all costs?
It’s not always easy to take the healthy-price stance; sometimes we try to find a kind of middle ground where we give off ‘low price’ vibes while still charging a healthy price. Here’s how to be proud of your pricing and emphasise your expertise and quality – not just your price.
6. Should I offer a quantity discount?
With a quantity discount you’d be accepting less money and working more hours, but you’d have the security of knowing the work exists. It’s not an easy decision. Here’s what you need to take into consideration.
7. Do I have to charge everyone the same?
Hurdles work by putting an obstacle in the way such that only the price-sensitive customers get to pay the low price. It’s a clever tactic worth thinking about, though not easy to implement. Here are some popular hurdles, which might give you a little food for thought for your own business.
8. What is my customer’s biggest fear?
They’re sure you can do a good job and that you’ll do it on time. So, why do your customers hesitate buying from you? The reason is: they’re scared and here’s why.
9. How can I price for ‘speed’ and is it OK?
Most clients want their work done ‘yesterday’. Or so it seems. And this can be very stressful when you’re a one-man band. Other clients don’t offer to wait – why would they? But really, they don’t actually need their stuff right now, this week or even this month. Here’s how to price the difference.
10. How can I raise my prices?
Need to increase your prices without treading on your regular customers’ toes? Fear not: Clients will rarely leave due to a price rise. Most stay because they love your service. Follow these 7 steps to ensure a smooth transition.
11. How can I regain control of my fees?
When a big business tells you what rate they will pay, they are looking for anyone – they see you as replaceable. In their eyes if you don’t accept the work someone else equally good will. The bottom line is, if you want to be a price setter you have to be different. Here’s how to move yourself from a ‘commodity for hire’ to a one-of-a-kind expert.
Armed with the answers to these questions, you’ll be well positioned to command a premium rate for your products and services.
If you have pricing questions, just let us know.
PS: For more help reviewing and setting your hourly rate, check out Flying Solo’s hourly rate calculator.