Article: Six steps to pricing your services well

Six steps to pricing your services well

Are your prices too high? Too low? Do you know? You want pricing to be competitive so clients will use your service, but you don't want to leave money on the table. Here's how:

Have a good timekeeping system. A good time tracking system will inform future estimates.

Ask the client about their budget. More sophisticated clients gladly reveal this information, knowing that they can only get the most for their money if you know how much there is.

Ask those who will be doing the work how long they think it will take. Then multiply the total by 1.2 or 1.5, depending on the makeup of your staff If the total time might add up to 400 hours at $100 per hour, or $40,000, we'll multiply by 1.2 and assume $48,000.

Estimate the total days that one person would require to get the entire project done. We'll estimate that it would take one person, working 40-hour weeks, about 16 weeks to do this project. At the same hourly rate, that's $64,000.

Pick a number between the two. In this case, $57,000 will be pretty close. Round up to $60,000 and you probably have a pretty accurate number. Look at similar projects (hours spent, not just hours billed) and see how your estimate compares.

Debrief everybody when the project is complete. If hours expended exceed hours estimate, determine why so that you can learn from your mistakes.

This article has been provided by ReCourses. For more information, please visit their web site at www.recourses.com.

If you have an article that you would like to share, please contact us Toll-Free at 1.866.369.8463 or email info@functionfox.com.

"Our PR and Design Agency looked diligently for a time and project tracking software application, only to find it right here in our own backyard. TimeFox paid for itself within weeks. Now we are accountable to our valued clients, we know how long we've worked on projects, and invoicing is a snap! I thank that little Fox every morning when he greets me upon log-in."
Maggie Kerr-Southin
Artemis Creative Communications

"TimeFox allows us to track our time more accurately by removing any/all objections my employees had to entering their time. More accurate time entries leads to better data for future project estimates because we have more accurate historical data. Better estimating leads to higher profitability and happier clients. All this leads to better profits and a happier CEO — me."
Shannon Carter
Cartis Group

"I needed a better time tracking system than the manual way we were doing things. I knew we weren't charging for all the "little" things and "quick" tasks like emails etc. We absolutely love your product. Learning to use it was so easy and it makes billing a snap. Thank you for developing such a functional tool. It's definitely making us more money."
Allison DeFord
DeFord Designs