It’s been almost 10 months since I’ve dropped out of school to work for myself full-time. I really still can’t believe how much I’ve grown and learned since then! Everyday I’m finding new ways to better my personal brand and myself as a career woman.

When I first began designing for pay at 18, it was a fun and new experience. I was still living with my parents and I didn’t have any bills. Designing for $50 here and there was great. Fast-forward 6 years (time flies!), and I have rent, a gym membership, (my daddy still pays my phone bill :] ), car insurance and NOW a car note.

I’m very fortunate that I’m able to work for myself and be able to afford to go out and put a down payment on a newer, reliable car based on my income.

There’s no way I would’ve been able to do that plus afford any of my bills if I was still pricing my services like I was 6 years ago. I’ve changed my pricing about 5 times (on average 1x a year). Why? Every year I have more responsibilities (including business expenses), plus the value of my services has increased.

Properly pricing products is key for small-business owners, but coming up with the right pricing structure can be tricky. Charging too much can turn customers away, while pricing too low can create a demand that your business can’t possibly meet.

I increased my pricing when I found that the money was already spent before the work was even complete. For example, about 3-4 years ago I charged $400 for a website that took me nearly a MONTH to complete. Girl, what?! A month’s worth of work for $400? Yeah, no.

So, how do I price my services? I use an hourly and value based method. View my income report here.

Here are two examples of pricing.

Hourly.

Ask yourself how much money you wanted to make. Let’s say you want to earn $4,000/month. That’s about $40k a year after taxes. If you have been at a career job for 5 years, I think that’s well over a fair compensation. There’s no reason you shouldn’t be making that money for yourself! Okay, $4,000/month. That’s about $1,000/week, $200/day, $25/hour for an 8-hour workday. Charge clients AT LEAST $25/hour.

Value based.

Because I’m a WAY better designer than I used to be, I work quicker and more efficiently. So while I could put together a website in about 48 hours (which is approximately two weeks since I like to sleep, eat and drink margaritas on the weekends), it doesn’t mean it will come out to be $1200 (assuming I charge the hourly rate from our previous example). For example, if I develop an e-commerce site that will bring in a potential client a minimum of $300/month, I am delivering a monetary value of $3,600 annually. At that point I could charge them more than $1,800 rather than $1200 (48 hours x $25/hour rate) for their website.

The way I’m able to make this work is by working with clients who value what I offer. This means they are willing to pay what I charge. I do this by narrowing down my target audience. I don’t go after EVERYONE to visit my website, follow my twitter or like my Facebook page. I seek out people who are passionate business owners who are backed by funding. I weed out the people who aren’t meant for me and my brand.

For each client, I have a structured process. We talk through their needs, see if their idea is within the right budget and then schedule out their project. Here’s an example of a basic proposal for a recent client.

sampleproposal

Once we agree on the proposal and sign contracts, I know when I’m getting paid. So let’s say I get a client like this 3x a month (sometimes easier said then done) – I am reaching my goal AND I know when to expect money to come in. See my updated pricing and proposal process here.

Applying this thought process contributed to me making the biggest purchase of my life (so far).

carpurchase

Previous to that my biggest purchase was my iMac (which I’m still technically debating which purchase was bigger because the iMac cost me more money than the down payment to my car)! Lol.

imacpurchase

Let’s chat! What’s your monetary goal? Are you struggling to come up with pricing? I’d love to hear from you!

Interested in a coaching call with me to help you get clear on your niche as a service provider?

See my packages here!