How Much Should You Charge Your Clients?
Figuring out how much to charge clients and customers can be a big problem for a lot of people, especially for service-based businesses. Trying to justify your price based on your knowledge, time allocated to the project, number and experience of staffs used in its execution, and several other metrics may pose a difficulty in convincing the client to pay the part.
For a product-based business, the cost evaluation of your products would be a whole lot easier since you’d have a direct cost of production or purchase, shipping cost, packaging cost, and more, giving you a clearer direction in your pricing strategy.
In running a service-based business, you need to find a balance between getting paid what you can comfortably accept and not putting you price above what your clients can comfortably afford. When you do this, you’d always find the right market price, and your project numbers would grow a lot faster.
That said, here are 4 things to help you know how much you should charge your clients:
1). What’s The Project?
The first step is to adequately understand the scope of the project. Is it a mobile application? Web application? Product supply? Construction work? Or any other?
By understanding the type of project and its entire scope, adding a cost value will come a whole lot easier.
2). Who’s The Client?
The type of client greatly influences the value of the project. Is it a startup? Medium-sized business? Large corporation? Or government organization?
Depending on who the client is, their ability to pay for the project would greatly differ. Where startups may be able to afford between $500 to $1,000 for a certain project, large corporations and government organizations may be able to afford $50,000 to $100,000 for the same project.
3). How Much Will The Project Cost You?
Next, you should take into account the total direct cost of delivering the service. Will you charge per hour or per month? Will you charge per extra staff that works on the project? Will you need to purchase materials to be used during the project?
Whatever cost that’d go into the execution of the project should define how much the ultimate cost of the project will be.
4). What’s The Industry Rate?
Lastly, do your research to know the average local and international industry rate for the project. If it’s a local client, costing the project around the local price is the way to go. But if it’s an international client, find out their local prices and find a balance between the price and the standard international price to cost your service.
What are your thoughts on how to charge your clients? Let me know by leaving a comment below.