Pricing Your Services

To price your services, it is essential to calculate your overhead costs and hourly rate to ensure that your business's income meets your expectations. The following steps can be taken:

1. Calculate Your Overheads: Determine how much money you need to cover your fixed costs for the year. This amount should include rent, utility bills, advertising, computer and Internet costs, stationery and postage, administration and transport costs.

2. Determine Consumables: For services that require consumables, you must decide whether to include these costs in your overheads, add the expenses to the specific services only, or charge your clients separately. You can consult an accountant or financial adviser to assist you in making the decision.

3. Calculate Your Earnings: Determine how much money you need to earn in a year. This amount can be based on your personal expenses or the going industry rate for someone of your level of experience and ability.

4. Determine Billable Hours: Estimate the number of hours you are likely to be able to bill in a year, taking into account time spent on administration, advertising, and finding new clients, as well as time for holidays and sickness.

5. Calculate Your Hourly Rate: To determine your hourly rate, add your overheads and earnings and divide by the number of billable hours. If necessary, find ways to trim your overheads or plan to work more hours or lower your income expectations.

6. Determine Your Service Rate: Use your hourly rate to calculate your service rate based on the time you anticipate the job will take. Determine the rate per hour or part thereof, in 15-minute increments, and be transparent with your clients about your fees.

7. Consider Discounts and Multiple Rates: Depending on your industry, you might offer discounts for large volumes of work or regular work. You might also charge different rates for different services or different markets. Determine what works best for you and your clients.

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