Price Wars
Regardless of what your company does, you must provide some service in order to sustain an existence. And where there’s a service, there’s a price. So how do you know what to charge your customers?
In my field (freelance writing), there are always bidding wars. Most customers discern equally talented writers by comparing the price of their services, often picking the cheapest hourly rate. This trend can be applied to most fields, whether it is business consulting, coding, graphic design, massage therapy, etc. So how much do you charge when you’re just starting out—you have to make enough to survive, right?!
My method (which has worked thus far) was to compete with more experienced writers (with lot more “street cred”) by charging 65-70% of their hourly rate. Then, once I had a few successful projects under my belt, I started raising each one of my service rates by $5 - $10. Also, so that potential customers weren’t scared off by “concrete” rates, I posted rate ranges to my website. So, your next question probably is, “how did you figure out a baseline rate?”
For freelance writers, a great resource for baseline rates is the Writer’s Market “How Much Do I Charge” website. Similarly, based on what service you provide, you can easily find sample rates by analyzing your competition on Google. Also, do a reality check for yourself. If you have a brand new company, offer promotions and special discounts to new customers. Although your talent may speak for itself, many business owners just don’t have the reputation yet to charge above market rates.
Charge your clients fairly, but don’t de-value yourself. Your services are worth a certain amount now, and hopefully, will be worth 5x that certain amount later. Also, keep in mind that if customers feel that they’re being overcharged, chances are, they won’t come back.
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