I firmly believe that most small service businesses dramatically undercharge for their services.

I’m not sure if this stems from a self-worth issue or whether people just price things wrong but whatever it is, it’s easily fixed.

There are a few different ways of pricing:

  • Markup on costs
  • By day / hour
  • Fixed price based on what you feel is good value to you
  • Fixed price based on value to them.

What I want to talk to you about today is how to price your services based on the value to your potential client, then how to justify that cost.

It sounds easy but in order to do it, you need to actually know the value you can provide. The only real way to do this is find out what the current situation is before you submit your proposal. By current situation, I mean 3 things:

  1. Number of leads they’re generating so far
  2. Price of product/service (or average if it varies)
  3. Rough profit per sale

From there, you can make some estimations about the results you’re planning to get for them in the context of their actual situation.

Business is supposed to be logical. Making decisions on facts and figures. If you don’t present those facts and figures then you’re forcing them to make their mind up based on other factors which might not be your strong suit.

In this video which runs about 3 minutes, I give you a written example of exactly how you can charge more, then what to put in your proposal in order to win the job with ease.