Pricing can be tough when you’re a small business or solopreneur. As business owners, we’re intimately connected to our clients and our pricing. 

We see both sides – the cost, time, end effort that goes into the creation of our offers, and the feedback from clients; we have control over our pricing and the execution of service delivery. 

Because of this interesting dynamic, I find small business owners make more emotional decisions, modifying (or not modifying) their pricing based on what they feel their clients can afford.

Unfortunately, this often results in people underpricing their offers. 

My goal is to empower business owners to share their brilliance in the right places and the right spaces to reach their clients. And pricing is a huge part of that which is why this conversation is so near and dear to my heart. 

It isn’t enough to simply pick a number that sounds good out of thin air for your program or service. It isn’t enough to just check a few items off your “marketing to-do list.” 

Your pricing needs to reflect your values. And when you take the time to gain clarity on your values and goals for each of the offers you have, you’ll feel much more empowered to share about your business, promote your services, and find your clients. 

Where should business owners start when it comes to pricing?

There are a lot of different factors to consider when it comes to pricing! 

The single biggest challenge I see with my clients is undervaluing services, and that is usually a result of not putting in the time to figure out exactly how much it’s costing them in terms of time, effort, and money. 

So, that’s where I always suggest starting. 

While this might take a little bit of effort upfront, breaking down everything that you do to deliver a service, and the costs of all of the tools you utilize to bring that offer to life is going to be your most important step. 

Let’s break this down. 

What’s your hourly rate? 

While I know that most people are trying to move away from hourly rates, especially in service-based businesses, you also can’t get to solid flat rate pricing until you know how much time it's taking you to deliver something. 

That goes for products and services! And so, having a really good understanding of how long it takes you to do the work that you do for your clients or customers is critical. 

What also goes into this is the time you put into gathering the knowledge and experience you have today. 

How long have you spent crafting your skills? Did you take courses and education to get you to where you are?

All of this is valuable, and should be built into your pricing because it’s time, money, and energy you are saving your clients or customers from putting in themselves. 

How much time will you spend creating and delivering the offer? 

Now, consider the actual time spent creating and delivering your offer. 

Sometimes, you might have one-time costs for your time. For example, creating the outline of your program or setting up an email sequence. These are things you likely won’t have to edit regularly, though you will need to review them from time-to-time just to make sure everything is correct and flowing smoothly. 

Other times, you have recurring time costs like calls built into a program, time spent creating a physical product, or execution of specific tasks for clients. 

Both of these need to be factored into your pricing. One contributes to the overall value of your service. The other is a cost associated with delivering the service.

Beyond that, service delivery can look very different from one person to another. One customer might purchase something from you and never reach out again, whereas another might continuously email you with questions, or want support with a return or exchange. One client might not have any edits for the service you deliver, while another might go back and forth with revisions multiple times. 

In addition to ensuring this time is built into your pricing, you also want to confirm that you have relevant and aligned boundaries and contracts in place. 

Be clear when describing the scope of work and / or the deliverables you will be providing, and where extra charges will be applicable so your clients have clear expectations. 

We're not always great about setting those boundaries, especially in the beginning, so don’t beat yourself up if you’re struggling. Over time, as you establish your company goals, values, and structures, this process will get easier.

What tools and software are you paying for, to deliver your offer?

There is a tendency to not know how to think about the tools we use in our business as costs that are incurred. 

But, if you are utilizing tools and software to help you deliver your product or service to your clients, these costs should also be broken down and included in your pricing. 

For example, I use a tool called Notion to create a workspace that allows me to share documentation in one place for clients I’m working with over a long period of time. It’s basically the hub they can go to and find everything we’re working on together. 

Another tool I use for short-term project-based work is ClickUp, which allows me to invite clients to monitor and engage with projects as we go. They can see at a glance where we’re at whenever they want to get an update, or they can pass documents back and forth with feedback. 

Both these tools ensure that neither I nor my clients lose critical information and documents in our email inbox. . 

What about vacation, health insurance, benefits, and sick pay? 

Pricing for solopreneurs and small business owners can be made even more complicated by the fact that we don’t have a benefits plan, sick pay or paid vacation. 

If you were working for another business providing you these benefits, they have already taken care of determining these costs and factoring them into their financials and the salary they give you. 

However, when you’re on your own you need to consider these costs so that you are able to enjoy life and vacation time without financial stress. 

How much do you want to make yourself?

A lot of solopreneurs forget that paying themselves is one of the expenses that needs to be pulled out of their revenue. 

You want to ensure you are charging enough money beyond your expenses so you have room to have a life! 

In the early days you’re often paying out more than you’re bringing in (part of which is related to pricing, because you often undervalue your time – for example $50 an hour in employment is not the same as $50 an hour as an entrepreneur, as you need to take into account your expenses, benefits, etc., as discussed above), which means your profits won’t be as high. 

But, as you set up the proper structures and systems, hone in on your pricing, and develop more experience in your field, your income potential is unlimited as an entrepreneur. 

However, this potential is only maximized if you are properly setting goals, owning your values, charging your worth, and setting boundaries. 

To determine how much to pay yourself, you need to consider how much you want to make. From here you can work backwards to develop a pricing strategy that works for you. 

How important is profit for solopreneurs?

Expanding on the topic of knowing how much you want to make, comes a lot of intricacies, stories, and societal pressures around money. 

How much do you really need? How much money makes you greedy? 

In the most basic sense, profit for any business is what’s left when you take your revenue and subtract your expenses. If there is money left over, it’s a profit and if there’s a negative value there's a loss. 

So, how important is profit? It depends. In some ways if you never want to have employees, or expand your business any bigger, you can simply choose to stay where you’re at, balancing out how much you spend and how much you make, ensuring there’s enough to have the income you need to maintain your lifestyle. 

In that case, maybe you don’t need to earn more, maybe a huge profit isn’t needed. 

Or, maybe you set aside a little bit of a nest egg in your business for specific projects, emergencies, or the potential reality of you or a family member getting sick so you can take some time away. Other than that, additional profit may not be  necessary or important to you. 

On the other hand, if growth is important to you, then you might set aside extra to put money back in the business to afford hiring employees or expanding your reach. As long as you’re aware of these initial expenses, and the responsibility that comes with growth, then your bigger profit goals can be achieved as you raise your prices, acquire more clients, and / or sell more products. 

When we look at the average small business owner, though, we generally don’t need to be as concerned with profit, especially compared with a large company who has workers who rely on the company making money to have a decent living, or public companies who are required to put out their financial statements showing that they are growing and profiting month over month because of laws and shareholder obligations. 

With larger companies these pressures and financial stresses can cause issues because in times of inflation or uncertainty, companies feel pressured to raise their prices and show a greater profit, unfortunately negatively impacting their consumers. 

As small businesses, we can operate very differently. We can make the decision to say that what we’re bringing in is enough, and that we don’t want to aspire to anything bigger than what we’re currently doing. 

We can also make the decision not to raise our prices, even in times of inflation or uncertainty, because we value accessibility, affordability, and serving our customers. 

Again, if you do want to prioritize profit, that’s also fine! There is nothing wrong with focusing on profit more if it means building a life you desire. 

Whatever direction you go, it’s important that you be mindful of your values and ensure that what you’re doing is sustainable. 

Do you see any potential conflict between owning your worth and aligning your pricing to your values?

Generally, no! However, I do think there can be some friction depending on how you go about pricing. 

For example, if accessible pricing is important to you, extending the amount of time in your payment plan may be supportive. 

Or, maybe you simply want to make payments easy to process mentally. There are a lot of psychological theories around pricing and numbers. For some, pricing a product at $197 is more digestible than $200. 

Or, maybe you decide to have one offer that is radically underpriced so that it’s available to anyone (see below as I discuss my Magnificent Marketer’s Club, where I have done just that). 

Any of these options would allow you to uphold your value of accessible pricing.

However, it’s just as important to own your worth. And being able to do that while still upholding your values can be really challenging. 

If you’re charging less just to be the cheapest, you might be devaluing the work you’re doing. Even if you’re excellent at what you do, it may unintentionally also send a message that you’re not as good, because much of society believes that you get what you pay for. 

And, even if charging this low rate is enough for you to live on, it also can impact the person who is charging greater prices because they may struggle to find people who can believe they’re worth paying for. 

To further complicate things, this pricing might simply be reflective of a difference in the audience you’re trying to attract, in which case there are no real complications. 

If, instead of lowering prices we want to do things like extend payment plans, it doesn’t necessarily cheapen the product or service but it does put greater risk on you as the business owner, and not everyone is willing to accept that. 

What happens if someone can’t pay one month? What happens if someone changes their credit card and fails to notify you? This is another place where aligning to your values can potentially come with risks. 

Finally, when you are clear on your boundaries and values and who you want to work with, you may decide to refuse to take on a client who doesn’t align with your values. That has risks as well because you might need those clients or that income at that particular time, and it might feel like you’re hurting yourself by living up to your values and not working with them. 

All of these are real potential complications. However, I do think that customers see the integrity we have (or the lack of it) when they’re choosing who to work with, and it becomes something they value or avoid. 

The people who have similar values will trust us, the support we give, and the decisions we make, and will appreciate our integrity in ways we don’t necessarily always realize. 

I’m a firm believer that your ideal clients will find you, and those who aren’t aligned will weed themselves out if you stick to your values and are authentic in your content, offers, and selling. 

What are some of the values small business owners should think about when setting pricing?

Accessibility

If you're setting up programs that are a set amount of time, having a payment plan in place or variety in the way people are allowed to pay can be extremely beneficial. 

For example, would you like your deposit to be X amount or Y amount? Would you like to pay the program off in 3 months or 6 months? This flexibility in pricing structures can be really helpful in ensuring your program is available to anyone who would like to invest in it. 

On the other hand, if you’re trying to go after an audience who can pay the full amount upfront so that you know they’re serious about and committed to the program and are more likely to see it through, then maybe you draw a hard line down about payment upfront to vet who you’re working with. 

Collaboration 

If you value collaboration and have team members, consider asking them their thoughts on pricing and pricing plans as you develop your strategy. 

Or, make it a point to collaborate with your clients, opening up a dialogue on what they are willing and able to pay for different programs. 

Business Growth 

If business growth and expansion in the area of revenue are important to you, you need to build that into your pricing structure and profit goals. 

If not, you might choose to simply ensure that your business costs are being covered, and that you’re making enough profit to support of your current lifestyle. 

Diversity and Inclusion

Both incredibly important, ensuring your offers are able to serve anyone and everyone might also impact your pricing. 

For example, do you want to give-back with your offer? If so, can you build a donation amount or percentage into your pricing? Or, for every 10 people who sign up do you want to gift a program to a member of the BIPOC community? Going back to accessibility, can you offer tiered pricing or implement a “pay what you can” initiative for minority groups? 

To ensure your program is accessible to all, do you need to hire additional support? Do you need additional software to transcribe your community calls for those who are unable to hear? Or do you need to add audio files to your program for those who are visually impaired? 

All of these factors can shift your pricing. 

Remember,

If you don't agree with one of these approaches, don't take it! If you do, then build it into your business. 

You’re in charge of your business and it’s your values that you need to prioritize and plan your pricing around. What works for one person or business might not work for another and that’s okay. With time and fine-tuning you’ll find an approach that feels most aligned for you. 

A note on blatant capitalism and selling 

I’ve written before on the importance of selling and making your offers known to your audience, but it’s worth a reminder: if your current content plan doesn't include regular reminders that they can buy from you, it's time to add those in! Because your people can’t find your offers if you’re not regularly sharing about them. 

Once you have your pricing in alignment with your business and values, selling will become a lot easier. 

Now, for a moment of blatant capitalism (as I like to call it) for myself, I want to introduce you to the Magnificent Marketer’s Club – a community I know will transform your business and your mindset around marketing. 

I designed this online community and learning hub to give business owners the support they need so they can harness the power of marketing to grow their business, while networking and collaborating with other business owners. 

And, you have access to me as your “Chief Marketing Officer,” through regular “Ask Me Anything” calls, co-working calls, and the opportunity to ask questions or write comments on our community platform (it’s not on Facebook, don’t worry). 

Plus, because I value accessibility, supporting small business owners, and generosity, I‘ve priced this program at an incredibly low rate of just $40 a month or $400 a year. 

While this is a very different kind of pricing model, even compared to my other programs and offerings, it’s reflective of the values I hold dear to my heart, and it’s my way to give back to those business owners who are looking for support. 

And, because the pricing is aligned with what I value and what I want to offer my clients, I am attracting a really fun, lovely, and supportive group of business owners! It has also become one of my favorite things to work on, because it’s exactly the kind of community that I wanted to build with the club. 

I hope to see you hop on our next call! You can sign-up here. 

Final thoughts and encouragement

Regardless of whether you join us or not, I hope the time I spent selling my Magnificent Marketer’s Club to you inspires you to reflect on your own pricing, marketing, and selling strategies. 

Consider:

• What are your business values and goals? What is important for you to represent? What do you hope to share with the world?

• Are your prices reflective of those business values and goals? Why or why not? What needs to shift?

• When was the last time you asked your audience to buy? Are you sharing about your offers enough so people know they exist and your clients can find you? 

Have fun with this process! And know that you don’t have to get it correct right away. 

Your business can (and will) go through several iterations while you find your place in the marketplace and world.