How much to charge for a service: reaching a price you can defend

There is one question almost every independent professional asks, usually quietly: am I charging too little? Most of the time, the answer is yes. And the reason is rarely the market. It is not having done the numbers, or being afraid that a higher price will scare clients away.

Undercharging has a perverse effect: it attracts exactly the people who choose on price, question every line of the proposal and swap you for the next person who charges less. The method below works for photographers, therapists, consultants, trainers and any business that sells time and know-how.

Step 1: work out your minimum

Add up your monthly fixed costs (space, tools, accounting, insurance, equipment), taxes and contributions, and what you need to take home. Divide by the hours you can actually bill, not the hours you work. Self-employed people spend a good part of their time on work nobody pays for: proposals, emails, travel, marketing, invoicing. The result is your minimum hourly price. Below it, you are paying to work.

The costs almost everyone forgets

The minimum comes out too low when you leave out things that don't show up every month:

• Holidays, public holidays and sick days, when you don't bill.
• Equipment you need to replace and training to stay current.
• Travel and preparation time.
• Proposals and meetings that go nowhere.
• Quiet months, which the busy months have to pay for.

A worked example

Picture a self-employed photographer. She wants to take home 1,800 euros a month and has 600 euros in fixed costs. She sets aside roughly a third of what she bills for taxes and contributions, a figure that depends on each person's tax situation and is worth checking with whoever does the accounts. To keep 2,400 euros, she needs to bill close to 3,600. She works 40 hours a week, but can only bill half, because the rest goes on editing, proposals, travel and marketing. Allowing for holidays, that is about 80 billable hours a month. Her minimum is around 45 euros per billable hour. If she charges 30, she is subsidising her clients.

Step 2: look at the value to the client

Clients don't buy hours. They buy an outcome: a house sold, a website that brings enquiries, less back pain, a child passing an exam. Ask yourself what that outcome is worth to them and what it would cost them not to have it. Your price should sit between your minimum and that value.

Step 3: compare with the market without being tied to it

Look at what professionals with similar experience charge in your area and sector. It is a reference, not something to copy. If you charge below average, you need a reason; if you charge above it, your offer has to make clear why.

By the hour, by package or by project

Each format sends the client a different message:

• By the hour: simple, but it punishes people who work fast and puts the client in charge of the clock.
• By package: good for repeat services, such as sessions, classes or appointments, and it helps the client commit.
• By project: a fixed price for a defined outcome. It requires knowing the scope well, but it is what clients understand best.

How to present your price

Show what is included before the figure, offer two or three options when it makes sense and avoid automatic discounts. A discount given for no reason teaches the client to wait for the next one.

What to do when someone asks for a discount

Don't lower the price. Change the scope. If the client's budget is smaller, ask what can be left out: fewer sessions, fewer photos, a longer timeline. That way the price keeps its value and the client chooses what they want to pay for. Doing the same work for less, just because someone asked nicely, teaches them the first price was only an opening bid.

Price sends a message too

A price well below average doesn't say affordable. It says little experience or little demand, even when that isn't true. For services clients can't judge before buying, such as therapy, training or consulting, price is one of the few signals they have. Use it in your favour.

When to raise your price

There are three clear signs it is time:

• Your calendar has been full for several months.
• Almost nobody questions your price.
• Your experience and results have changed, and your price has not.

Raise it for new clients first. For existing ones, give notice in advance and explain what has changed.