Article
How to Price a Service When You've Never Sold Anything
Pricing is where most first offers die. People who are excellent at their work freeze at the question "So what does it cost?", say a number that's too low, and resent every hour after. This is a simple method for your first price, built for people who have never sold anything.
Step 1: Work out your floor
Your floor is the lowest price that's still worth doing. To find it:
- Count the real hours. Not just the work. Add messages, travel, preparation and fixing things afterwards. For most beginners, the real number is 30–50% more than they think.
- Pick an hourly rate you'd be glad to earn. Not what you earn now. What would make this worth your evening?
- Add any costs. Materials, fuel, software.
Floor = real hours × your rate + costs. Never go below it.
Example: a used-car inspection takes 1 hour on site, 30 minutes of travel and 20 minutes to write up. That's about 2 hours. At $45 an hour plus $10 fuel, the floor is about $100.
Step 2: Price the result, not the hours
Buyers don't want your hours. They want the problem gone. So say what they get, and put a single price on it:
- Not "$45 an hour", but "$120 for a full used-car check before you buy".
- Not "$30 an hour for admin", but "$200 to get your inbox under control".
A price for a result feels safer to the buyer, because they know the total. It's also usually higher, because it's compared to the cost of the problem, not to your wage.
Step 3: Offer three options
Give people a choice instead of a yes or no:
- Essential: the core result, nothing extra.
- Signature: everything you'd normally do. This is the one you recommend.
- Premium: everything, plus priority or follow-up.
Most people pick the middle. The premium makes the middle look reasonable, and the essential gives cautious buyers a way in.
Step 4: Test it with real people
Your first price is a guess. The market corrects it. Tell five potential buyers the price out loud and watch what happens:
- Everyone says yes immediately: you're too cheap. Raise it for the next one.
- Nobody says yes: either the price is wrong or the problem isn't painful enough. Ask what it costs them today.
- Some hesitate, some say yes: that's about right.
A useful question when someone hesitates: "What does this problem cost you today?" Very often the answer is more than your price.
Mistakes to avoid
- Discounting before anyone asks. Say the price, then stop talking.
- Saying "around" or "roughly". It tells people the price is negotiable.
- Charging friends forever at friends' rates. One favour is fine. A business needs paying customers.
- Forgetting your time is limited. If you can only do four a month, price for four.
A simple script
"For [result], it's [price]. Most people go with the Signature option, which covers [what's included]. Which would be more useful for you?"
That's it. Clear price, a recommendation, and a question that keeps the conversation going.
Questions people ask
How do I price my services for the first time?
Work out your floor from real hours, your rate and costs, then price the result rather than the hours, offer three options, and test with five real buyers.
Should I charge hourly or per project?
Per result, wherever you can. Buyers prefer knowing the total, and it usually lets you charge more than an hourly rate.
How do I know if my price is too low?
If everyone says yes immediately, it is too low. A healthy price makes some people hesitate.