Pricing Strategy for Service-Based Entrepreneurs

Welcome to another raw and uncut episode of Conversations with Corrine! As part of my commitment to step outside my comfort zone, I challenged myself to record and share one video every day. Today’s short conversation is specifically for service-based entrepreneurs who may be struggling to determine what to charge. I recently attended an unconference and joined a session on pricing strategies. Unlike a traditional conference with a predetermined agenda and scheduled presentations, an unconference is a participant-driven experience in which attendees help shape the conversations and share their questions, knowledge, and experiences. That session inspired me to talk about an important pricing strategy: calculating your personal hourly rate—even if you never charge your clients by the hour. START WITH WHAT YOU NEED TO MAKE Begin by determining how much money you want and need to generate during 12 months. That number should support both your business and the life you want to live. Consider everything your business income needs to cover—from filling your gas tank and paying the electricity bill to taking the vacation you want. Your annual revenue goal should account for the real cost of operating your business, supporting yourself, and creating the lifestyle you are working toward. Next, decide how much time you are willing to devote to earning that amount. How many weeks do you want to work during the year? How many hours do you want to work each week? Dividing your annual revenue goal by the number of hours you plan to work gives you a personal hourly rate. This is not necessarily a rate you advertise or share with clients. It is an internal benchmark that helps you understand what your time must produce and whether the services you offer are priced sustainably. YOUR PERSONAL HOURLY RATE IS A TOOL—NOT YOUR VALUE I do not advocate pricing professional services solely by the hour. If you know how long a project may take and understand your internal hourly benchmark, you can calculate the minimum amount the engagement must generate to cover your time and everything required to deliver the service properly. But that calculation is only the starting point. Your client is not simply paying for your hours. They are paying for your experience, expertise, judgment, problem-solving ability, efficiency, and the result you help them achieve. There is no hourly rate for impact. There is no hourly rate for an outcome. Your final price should reflect the value you bring and the transformation, solution, or result you provide. A REAL-WORLD PRICING EXAMPLE In this episode, I also share the story of someone who asked for my help pricing the planning and management of a conference for a client. Instead of simply telling this person what to charge, I helped them consider the scope of the work, the time involved, the expertise required, the outcome they would create, and the overall value they would provide. They moved beyond the fear of naming a particular fee, confidently presented a price that reflected their value, and were successful. In this episode, I discuss: • How to establish a realistic 12-month revenue goal • Why your desired lifestyle should be part of your financial planning • Calculating how many hours you want to work each year • Using your personal hourly rate as an internal pricing benchmark • Ensuring your fee accounts for the time and resources required • Why service-based entrepreneurs should not sell their value by the hour • Pricing according to expertise, impact, outcomes, and value • Moving beyond the fear of charging what your services are worth Knowing your numbers gives you a solid pricing foundation. Understanding your value gives you the confidence to build upon it. Please LIKE this video, SUBSCRIBE to the channel, and SHARE it with a service-based entrepreneur who may be underpricing their expertise or just find this useful. Then join the conversation in the comments: Does your current pricing support the income you want and the life you are building? ABOUT YOUR HOST Corrine Statia Thomas, CMP Certified Meeting Professional | Business Growth Strategist | Coach https://corrinestatiathomas.com Welcome to Conversations with Corrine—where we have honest conversations about business, personal growth, communicating your value, and becoming more confident in who you are and what you bring to the table. #PricingStrategy #ValueBasedPricing #ServiceBasedBusiness #ServiceBasedEntrepreneur #KnowYourNumbers #KnowYourValue #BusinessGrowth #SmallBusinessTips #Entrepreneurship #BusinessCoach #Unconference #ConversationsWithCorrine