I am a big, big advocate of entrepreneurship being kiiiiinda the best thing ever. You have the freedom to control your own schedule, strategize your income, and design your own life. Like, hello. ‘TIS A DREAM. But, I’m no stranger to that icky feeling you might get when it’s time to learn how to actually price your products and services.
Here’s the thing: there’s no entrepreneurship without thinking (and talking) about money. There’s just not. And, a big part of that is learning how to price your products and services in a way that makes sense for you, makes sense for your customers, and makes sense for the life YOU want to live.
When it comes to learning how to price your products and services, there are 8 keys that I like to use. They work in tandem, so you can’t just pick one factor and base your pricing off of that. You need to take multiple moving parts into consideration, and these are the biggies. I’ve strategized my pricing like this the entire time I’ve been a biz owner, from my early days as a newbie wedding photographer to now, where I’m pricing everything from courses to sponsored content.
With these steps, you’ll feel more comfortable with the idea that it really is all a numbers game. Charging money shouldn’t be emotional or deeply personal — it should be all about charging for the expertise you offer, the killer products you sell, and the life that you deserve to live. That’s all. Full stop. Now, let’s dive in.
01. What’s the cost of living in your area?
The first thing to consider when learning how to price your products and services? Think about the cost of living in your area AND your life. Is your rent absolutely insane, or are you lucky to live in a less expensive housing market? Are you providing a luxury product or service? Are you in an urban or a residential area? These are all logical factors that affect your bottom line, and the bottom line of the people buying your product and service.
02. How to price based on that experience level of yours?
Next up, get real with yourself. What do you bring to the table? Why should your customer buy your product or service? What is it about you that makes you worth the price tag? Remember, regardless of the product or service you’re selling, you are what people are really clicking “purchase” on.
Whether you have years of experience in your field or your product is mega peer-researched, these are all factors to think about when it comes into pricing your product or service. The more experience you have, the more money you can feel comfortable charging. Are you the expert in your area? Charge for it, girl.
03. What’s the cost to make your product?
Then, it’s time to think about the numbers — and the numbers only. If you’re making a product, get nitty gritty with the bottom line. How much money does it cost to produce your product, from the beginning of the process all the way up until it’s packaged and shipped? Every single cost needs to be baked into the price, along with a profit margin.
There are tons of formulas that you can find online that’ll help you settle on a good price, too. You’ve got this.
04. What about the amount of time + resources for your service?
If you’re selling a service or a course, it might seem a little trickier to price it. But, it’s not. It’s just thinking about your worth and the time and resources you’ve put into the course.
Start small: what’s the cost of the subscriptions and products you used to create your course? What does your monthly overhead look like when it comes to the business expenses you incur while building your product or performing your service? How many hours are you spending on average? Each piece of the puzzle needs to be accounted for.
05. Any idea about pricing for those competitors of yours?
Just like with the market research done by corporations, you’ll need to do some digging as well. It’s important to have a general idea of what your competitors charge when looking for your own prices. Most importantly, don’t make the mistake of charging marginally less than your competitors just because you think it’ll give you more business. Charge what YOU are worth.
However, having a finger on other pricing models can give you a general idea as to what people are paying for similar services. If you’re charging $3,000 for something that someone else is selling for $300 to the same market, you may not get very far. On the other hand, if you’re charging $300 for something that other people are selling for $3,000, you have some thinking to do.
06. What is your intuition telling you?
This might not have as much to do with numbers as the other steps, but a big deal when it comes to pricing your products and services? It’s all about your gut, and what your “enough” is. If YOU know what you need and want to make to be content, then that’s power.
Truth is, you know you better than anyone else. If you feel like you’re not charging enough for your products and services, you’re probably not. On the other hand, if you feel like you’re charging too much, you probably are.
07. What’s your ideal income?
The next thing that you need to look at is the contrast between what you’re looking to charge and what you’re looking to actually take in as income. Does your pricing reflect the life and income you want to have? That’s not selfish, my girl — it’s just business.
The best part of entrepreneurship is building your own salary, so put yourself in the situation to have a salary you’re comfortable with. For some people, that might mean an hourly rate that makes sense for them. For others, it might mean charging a per-project flat fee. It doesn’t matter what you charge, just make sure that it works for YOU.
08. Are you willing to be flexible?
Most importantly, remember that pricing is NOT a static thing. Just like the world economy jumps around, so can you. I like to create a pricing guide at the beginning of each year, and then I re-evaluate at the end. This helps me to stay up with the times and price myself at rates that I (and my clients) deserve.
While you definitely shouldn’t be changing your pricing on a whim, being variable with your pricing on a schedule is a normal AND effective way to run your biz.
When it comes to entrepreneurship, you are the boss. Charge like it! With these steps, you’ll be able to think about your pricing model with some strategy and intention. That, my friend, is the way to be a crazy successful businesswoman.