"What Should I Price This At?"—Your Guide to Setting Prices with Confidence

One question I get almost weekly is, “What should I price this at?” If you’re just getting started, determining the right price can feel incredibly daunting. You’re often left trying to figure out market rates, which can be elusive.

So, do you base your pricing on your old salary? Or is there a magic formula? The answer isn’t so straightforward, and it’s easy to fall into the trap of imposter syndrome: “They’ll never go for that price” or “That company has been around for five years longer, I can’t charge the same as them.”

Here’s a more grounded approach:

1. Start with Your Expenses. Begin by calculating your business expenses. Include everything necessary to run your business and pay yourself a salary.

2. Include Owner’s Compensation/Salary. Your pricing should account for your own compensation. After all, you’re building a business to support yourself as well.

3. Set Your Bottom Line as Your Baseline. If you base your pricing on your bottom line, you’re starting from a place of reality. This method removes the guesswork and aligns your pricing with your financial needs.

Once you have your expenses and salary figured out, pricing becomes less nebulous and more grounded in reality. You’ll be better equipped to set prices that are fair to both you and your clients, without relying on guesswork or outdated benchmarks.

Remember, the game begins when you start from a solid financial foundation. This approach allows you to set prices confidently and focus on growing your business with a clear understanding of your financial needs.