How to Calculate a Price

The Value Pricing Podcast

Billing a client based on how long a job takes is easy – it’s the way we’ve traditionally priced in the profession…

…that doesn’t make it right.

Hourly billing is a terrible way to price for several reasons:

- Your clients hate the surprise bills

- It’s not an effective way of pricing (so you make less money)

- You and the client have conflicting interests (it’s actually kind of immoral)

- Because you are earning less, you can’t give the client a truly valuable service

We must stop hourly billing and instead give the client a price up front.

But what should the price be? How do we know it’s the right price? How do we make sure we don’t end up making a loss on the project?

When you give a fixed price upfront, you are taking the risk away from the client (which they love) and taking on that risk yourself.

So, you need to make sure you’ve calculated a price that covers your costs, deals with scope creep and unforeseen events, and most importantly: guarantees you a profit.

Here’s what you will learn in today’s episode:

✅ Several wrong ways to price (and the ONE RIGHT WAY)
✅ Cost plus pricing vs value pricing
✅ A 3 step process for creating the optimum price
✅ How to work with the client to increase the price
✅ What to do if your price is too high

Accounting and bookkeeping is valuable work and deserves a high price. When you price low you inevitably end up rushing work and cutting corners. When you charge the RIGHT price, you can deliver a more valuable service and spend more quality time with each client – and your clients will happily pay for that service.