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How do you price your service?

As a newcomer I want to appeal to potential customers by offering competitive rates, however, I do not want to undervalue myself. Is there a formula or strategy for pricing one's service?

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4 answers

There several things you should think of when developing the cost for service:

  1. Time - how much time will it take you to complete the project?
  2. Supplies/Equipment - How much will the supplies and equipment needed to complete the project cost. This one can be a little tricky if you are using something like a computer and software but you have to give it a value (overhead cost).
  3. What is the value of your time? when you work for someone else you value may be $15 per hour. So, working for yourself what is the value of your time?

These are the basics you can add what you need to. So with this formula if the job is going to take 3 hours and the cost for supplies and equipment is $50 and your time is values at $100 hr that formula would look like this 3 hrs. x $100 +$50 = $350 before tax.

I would also encourage you to check our your competitors prices. What are they charging for the same service.

Report Vanessa's answer

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I agree with the above answer. You should carefully look at your cost of producing the product or building the end product. Evaluate or find out what your competitors are charging.

Report Corne's answer

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I agree with my colleagues but here's another perspective. Price should be what clients are willing to pay. That willingness could be shaped by several factors such as expertise, demand, supply, etc. If your services are unique, no one else in the market can provide them, and there is a high demand then your Price should be high since people are willing to pay more for those services. Build a decent margin on your products or services. If the factors are not in favor, then your Price might be low. Do the basic math and research as Vanessa mentioned above, but also look at your own positioning in the market to see what people will be willing to pay for your services.

Report Jayneel's answer

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Pricing a service depends on Cost of the service and several other factors, 1. The present price of similar existing services 2. The service you are providing is common or niche 3. The customer's willingness to pay Please check on the above details to price your service initially. Later, slowly based on the response and the feedback, you can reprice your service. I hope it helps.

Report namita's answer

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