One of the most common questions I get asked is around money: How much should I charge?
In this video, I explain my 3 part system for finding the right price. (Not into video? Scroll down for the notes!)
The simple answer to the question of “how much should I charge?” is “whatever you want.”
It’s your business and you get to choose.
There is no official “right price.”
Someone will always be charging more than you. Just consider your service for:
- the ultra rich
- large corporations
And someone will always be charging less:
- new practitioners wanting to gain experience and working for free
- people in other countries with lower costs of living (like me – charging in Canadian dollars!)
Keeping that in mind, here’s the formula I suggest to my clients.
3 criteria for setting the right price
Your right price needs to meet these 3 criteria:
1. Right for your business
The numbers need to work. It helps to determine a “target hourly rate” for your business that takes into account your financial goals and the number of hours you have available to work.
To calculate this number, you will need to consider:
- the number of hours you want to work each week
- the number of weeks off you want to take each year
- what you want to pay yourself for a salary
- how much your business expenses are
Then, when you price your individual services, you need to take into consideration:
- how long they will take to deliver
- other time costs (like administration or prep work)
- materials and expenses (printing, licensing, room rentals, etc.)
(Need some help with figuring this out? I made this for you: Plan for Success.)
2. Right for YOU
You have to feel comfortable with whatever amount you’re charging.
If you charge too little, you’ll feel resentful – like your clients are taking advantage of you. You need to feel like you’re being paid fairly.
If you charge too much, you’ll feel uncomfortable asking – like you’re taking advantage of them.
The right price for you will be somewhere between these 2 figures. Your price will likely move upwards as you gain experience and confidence. An amount that today might feel like “asking too much” might very well be a “resentment level” price for you in a few years.
Want a quick shortcut? What’s the highest amount you can say with a straight face?
3. Right for your Clients
You can come up with a number that works for your business and feels great to YOU. But if it doesn’t work for your clients, it isn’t going to fly.
From your clients’ perspective, they are basically deciding which they value more: the stack of money you are asking for – or the service you are offering to provide.
In addition to believing that your service is worth what you are asking – they also need to be willing and ABLE to spend the money.
The amount people are willing and able to pay depends on the market you are serving.
It’s your job to explain the value of your service
Whether or not they see the VALUE in your service often comes down to your ability to adequately communicate that value. You need to be able to explain what you do in a way that they fully understand what they’re getting.
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