To kick things off, we’ll talk about what success means to you. This is a chapter for dreaming, conceptualizing, and defining what it is YOU really want. Success doesn’t mean the same thing to everyone, and figuring out what it means to you is the first step in pricing correctly. If you don’t know what you want, how can you know what it will take to get there? This is where we answer that question.
At this point, we’re just getting our bearings. Before you can determine exactly what your prices will be, you need to assess how much money you actually need to make to cover your needs and, based on your current prices, how many jobs you would need to book in order to hit that number. Think of this part of the process as an evaluation of your current finances. You’ll take a look at your bank statements, begin wrapping your mind around your expenses, and estimate your actual need based on those numbers. Half the battle of getting where you want to go is knowing where you’re starting out.
Having the right frame of mind about your value is going to matter a lot when it comes to sticking to your pricing guns. You can go through this whole course and find your ideal prices, but if you struggle to stand by them, it’s not going to do you much good. We’ll talk about emotional pricing in this chapter. I’ll define what that means, talk about the pitfalls that lead us to price emotionally, and discuss ways you can avoid the dangerous practice of severely undervaluing yourself and your work.
There are a handful of ways to structure prices. I’ll talk about five of them: Hourly, Cost-plus, Product, Service fee, and Pricing for value. At least one of these methods will be just right for you where you are now, and as your business grows, you may find yourself adding new revenue streams that use different structures, so it’s a good idea to become familiar with all of them.
Here’s where we get down to it—in this chapter, you’re going to price your work. I will talk about the three buckets of pricing: Job cost, General expenses, and Profit. Step by step, you will work out your numbers. Take it slow—it’s a process. First, you’ll spend time understanding your job cost and general expenses down to the dollar. Then, I’ll show you a foolproof way to determine your margin and plug in the numbers to ensure you’re pricing for profit every time.
After you’ve determined your prices, I’ll discuss the ins-and-outs of how to change them from what they are to what they need to be. Among other things, we’ll cover how to manage client expectations, how to track your data to ensure the numbers are making sense, when to cut things that aren’t profitable, and I’ll address common questions people have when raising their prices.
This chapter is for dreaming. You’ve figured out what you need in order to get by. You’ve even figured out what you need in order to thrive. But what would it look like for you to soar beyond what you ever imagined for yourself? What would it look like if you were to let yourself dream even bigger? This is a time to reflect on everything you’ve learned about pricing and let it open your future to new possibilities.