What to charge

Read time: 5 minutes

Sooner or later, everyone building extra income reaches the same moment: someone is interested, and now you have to say a price out loud. Most people say a number that is too low, feel relieved, and only later understand what that relief cost them. This issue is about saying a better number, calmly.

This week I am sharing thinking taken from my paid step-by-step guide for the freelance path. A path is the way you have chosen to earn. There are four: e-commerce, digital products, freelance work, and content. It is written for people selling their skills, but pricing fear is the same on every path, so I will translate it for the others too.

Why cheap feels safe but is not

Charging too little feels safe because it lowers the chance of hearing "no". But look at what it actually does.

A low price attracts the most difficult buyers, because people who choose only on price also push hardest on everything else. It tells the buyer your work is worth little, and they believe you. And it ends the work slowly. If ten hours of work earns you almost nothing, you will stop giving it ten hours. Cheap does not protect you. It spares you one awkward moment, and then costs you every week after it.

There is also a strange truth buyers rarely say out loud: a very low price makes them nervous. It reads as "something is wrong here". A fair price, said calmly, reads as "this person has done this before".

Price the result, not your time

The mistake underneath low pricing is thinking about yourself: my costs, my hours, my nerves. The buyer is not paying for your hours. They are paying for a result: a problem gone, time saved, money made, stress removed.

So start from their side. What is this result worth to them? A fixed process that saves a business several hours every week is worth real money, no matter how quickly you can do it. Being fast is your advantage. It should never be your discount.

A simple way to set your first price

First, find your floor. Add your costs and the honest hours the work takes. Below this line you are paying to work. Never price below it.

Then, price the result. Ask what the outcome is worth to the buyer, and set your price between your floor and that value. Closer to the value than to the floor.

Then, fix the scope. Say exactly what is included, by when, and what is not included. A clear scope with a firm price beats a low price with unclear limits, for both sides.

A worked example

Imagine you build websites for small businesses, and one asks for a site with a booking calendar and card payments.

Your floor: the work takes you fifteen honest hours, and you want at least £30 for each, so the floor is £450. Below that, you are donating.

The result: the owner currently takes bookings by phone, loses some every week to missed calls, and chases deposits by hand. A site that takes bookings and payments without anyone answering the phone is worth far more than a few hundred pounds, and it keeps working every month after that.

The price: somewhere between £450 and that value, nearer the value. You say £1,200, with a fixed scope: five website landing pages, a booking calendar, card payments, live in three weeks, two rounds of changes included. Not the cheapest option they could find. A clear, safe, fair one. That is what good buyers actually want.

And say the number without apologising. "The price is £1,200" is a complete sentence. The silence after it is not an emergency.

One more rule. If someone asks for a lower price, reduce the scope, not the price. "For that budget, I can build the site and the booking calendar, and add card payments later." The price per unit of work never drops, and the buyer still gets a real choice.

The same idea on the other paths

E-commerce: price from what the product is worth to the buyer, not cost plus a small amount. What is left after costs is what funds every next step.

Digital products: a very cheap product signals a weak product. People do not want the cheapest guide to something important.

Content: when brands come, the trust of your readers is the value. Price it on what your recommendation is worth to the brand, not on your hours.

Your homework

Take one thing you sell, or plan to sell. Work out your floor, write down what the result is honestly worth to the buyer, and set a price between the two, nearer the value. Then say it out loud once, alone, so the first time the number leaves your mouth is not in front of a customer. If your number scares you a little, it is probably right. If it embarrasses you, it is too low.

Coming next Monday

I get the same questions again and again, by email, in DMs, and in person. Next week I will answer the five most common ones, plainly, in one place.

See you then.

Izhar