Business Management

How to Price Your Small Business Services

Pricing your small business services can be a challenging task. You don’t want to underprice and leave money on the table, but you also don’t want to overprice and scare away potential clients.

I’ve spent so many hours agonizing over my rates, re-writing proposals, second guessing my final decision after sending off the proposal, so on and so on. Even as a bookkeeper, I still struggle with pricing and knowing my own value.

Here’s the thing though, the more and more you do it, the better you get. Now that may feel like an easy thing to be said, half the battle is getting enough prospects that you actually get to practice, but the truth is that it will get easier over time. You’ll become more confident in your business and offerings, you’ll become more confident in yourself, and you’ll even become more confident in your prospects by way of knowing after a call whether or not you’ve closed the deal before you even send them a proposal.

Until that time comes, here are are some tips on how to price your small business services effectively:

  1. Understand your costs:
    Before you can start pricing your services, you need to know your costs. You need to have a clear understanding of all the expenses associated with delivering your services, including labor, materials, overhead, and any other costs. Once you have a clear understanding of your costs, you can use this information to set your prices. Enter bookkeeping systems!
  2. Research your competition:
    Do some research on your competition to find out what they are charging for similar services. This will give you an idea of the market rate for your services and help you set your prices accordingly. However, don’t make the mistake of assuming that your prices should be the same as your competitors. You may have a unique value proposition that allows you to charge more or less than your competitors.
  3. Know your value proposition:
    What makes your services unique? What value do you offer that your competitors don’t? Understanding your value proposition can help you set your prices at a level that reflects the value you provide to your clients. If you offer something that is truly unique, you may be able to charge a premium price.
  4. Consider your target market:
    Who are your target clients? What is their budget? Understanding your target market is critical when it comes to pricing your services. If your target market is price-sensitive, you may need to set your prices lower than you would if your target market was willing to pay more for high-quality services. This has been a big factor for myself. The majority of my clients are what I call micro-size small businesses or side hustles and often times these clients can’t afford my regular monthly bookkeeping rate. However this is balanced out because clients of this size typically don’t need a lot of the big bookkeeping project work like in depth reporting or invoicing needs so I’m able to offer a lower price. I also implement the point below to supplement my own income by offering various add-ons.
  5. Offer pricing options:
    Consider offering different pricing options to your clients. For example, you could offer a lower-priced option with fewer features or a higher-priced option with more features. This allows clients to choose the option that best meets their needs and budget.
  6. Don’t be afraid to adjust your prices:
    Pricing is not set in stone. As your business evolves and your costs change, you may need to adjust your prices. Don’t be afraid to do this if you need to. Just make sure to communicate any price changes to your clients in a clear and transparent manner.

In conclusion, pricing your small business services can be a complex task, but by understanding your costs, researching your competition, knowing your value proposition, considering your target market, offering pricing options, and adjusting your prices when necessary, you can set prices that are both fair to you and your clients. Remember, pricing is not just about making money; it’s about creating value for your clients and building a sustainable business.

If you’re looking for some help in determining if your pricing is sustainable or creating your pricing all together, I can help! From getting your bookkeeping caught up to building out financial systems,

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *