How much should I charge for my services?
This is probably one of the most difficult areas when you are first starting out. How much should I charge for my services? In fact, this question can be asked in many different ways, how do you decide what to charge for a service? What should I charge for a client? How do you charge for an hour? Well, before you start charging for your services, you need to know how much your time is worth.
There are a lot of factors that go into determining how much to charge for a service. What service are you offering, the cost of the service, the amount of time it takes to complete, and what you would have been paid elsewhere are just some examples.
How to work out your rate
The first step in determining your rate is figuring out how much time goes into completing the service. This will help you determine what hourly rate you should charge clients.
You should first consider your cost of service and the time you spend on creating your work. You can then set a price for your services and charge a different price for each type of service.
A good way to calculate the cost of your service is to divide the total time spent on a project by the number of hours that you work per week. This will give you an average hourly rate. Keep in mind that this is just an estimate, so it’s best to do some research before setting prices.
Every service provider has to consider the cost of their services, and how much they should charge for them. But there are many factors that come into play when you’re considering your prices: what’s your value proposition, what are your competitors charging, what is the market rate for this type of service, how much do you need to live on, etc.
It’s important to be as transparent as possible with your pricing structure so that clients can make an educated decision about whether or not they want to work with you.
Don’t set your rate too low as some customers will feel they are going to receive a poor service. Some customers are actually attracted to paying a higher rate as they see feel they will receive a better quality of service.
Types of costings
Remember to look at how you are deciding to work out your costs. There are many different styles of costings relating to the way you interact with each individual client.
- Project
- Hourly
- Daily
- Weekly
- Monthly
- Retainer
- Per minute
There are many factors that go into determining the cost of your service.
Things to consider are:
- What is your time worth?
- What is the value of your service?
- How long will it take to complete the job?
- Introductory offer.
You should also consider the overhead costs you have such as equipment costs, taxes, and any other business expenses. It is important to decide what you need and what you don’t before setting a price.
Top Tip – always show the true cost, or hourly rate, on any quotation, before showing any discount you are going to apply. This will allow you to revert to the true cost once the work has been completed and before accepting any future work.
Billing methods
You have completed the work and now you need to inform your customer how to pay. Invoicing is an important part of running a business. It ensures that customers pay for the service they have received and that you get paid for your work.
The cost of a service varies depending on the type of service, and the time it takes to complete it. When you start calculating your invoices, make sure to consider these factors.
Invoicing is the process of sending an invoice to a customer for goods or services so that they can pay you.
Things to consider are:
- Payment terms – on completion, 30 days
- Invoice run – daily, weekly, monthly
- Discounts – discount for early settlement
If you are unsure, or too busy, to do your own invoicing you could always consider outsourcing your accounts to a bookkeeping/accounting company. An invoicing service will help you to create professional invoices and track your time, expenses, and payments in just a few clicks.
Payment methods
Payments are the money that you receive from customers in return for your goods or services. It’s important to know what you should charge for your service and how to set up invoices and payments with customers.
Things to consider are:
- Cash payments
- BACS payments
- On-line accounting software
- Cryptocurrency
- Mobile payments
- PayPal
- Online terminals
Disputes
Hopefully, your clients will be happy with the service they have received but you should still consider what steps you would take to deal with non-payment of invoices.
Things to consider are:
- Refer to your Terms & Conditions
- Refund policy
- Discounts
- Write-offs
- Legal route
Conclusion
How should I charge for my services? As you can see there are many things to consider before settling on your final rate. Do your research, check out the competition, and remember to value yourself and your business to match your market. Also don’t forget to review your pricing structure annually.
Good luck.