“Pick your price and stick to it — it’s that easy.” It’s an appealing idea, especially if you’re just getting started and have a million other things to worry about. But pricing is complicated and based on all kinds of things — your local market, years in business, certifications, and range of services, just to name a few. Here are a few general principles to get you started.
There’s a benefit to starting low. When you’re just getting started, experience (even more than money) is what you’re angling for. Consider lowering your prices while going after your first few jobs and getting some solid reviews in the process. Set a realistic limit; commit to raising your prices after 10 hires or winning 5 Thumbtack reviews.
Research your market. It helps to understand the level of competition in your market and what other business owners are charging. If you offer the same service as many other professionals in your area, know that entering the market will be tough — and you might have to lower your prices until you’ve secured a foothold. One way to increase your chances of succeeding: specialize. The more targeted your services are, the better chance you have of cornering your market. Check out your Thumbtack Insights report to zero in on your most competitive service areas.
Availability will affect your costs. Adjust your costs when your business is most in-demand and see how things fare if you hold onto those prices when things return to normal. The more you experiment with your pricing, the better you’ll be able to adjust your base rate to match what you’re worth. You can even apply this principle on a weekly basis. If your services are most in demand on Saturday and Sunday, those times are premium — charge a higher rate.
More experience means higher costs. Don’t be afraid to raise your rates. Many professionals are — and it costs them a lot of money in the long run. As you get more experience and grow your customer base, it’s only natural for your services to be worth more. You’re busier, more specialized and you have a lot of happy customers to back you up.
How do you set your prices? Tell us in the comments below.