1. Know your floor: build a simple cost & capacity model
- List all costs: direct labor, subcontractors, software, travel, payment fees, marketing, admin, owner salary, taxes.
- Estimate billable capacity: hours or “slots” you can actually sell after vacations, sales time, admin (often only 50–70% of total hours).
- Set a target profit margin (e.g., 20–30%).
- Calculate the minimum viable rate/price:
Hourly floor = (Total annual costs + Desired profit) ÷ Billable hours
Project floor = Estimated hours × Hourly floor + pass-through costs
This gives the floor, not the final price.
2. Price to value, not just to cost
- Map problems solved → outcomes delivered → $$ value (savings, revenue, risk reduction).
- Use value to set the ceiling of what clients would willingly pay.
- Your actual price sits between the floor and ceiling.
3. Offer clear, tiered options (“Good / Better / Best”)
Typical structures:
| Tier |
What it includes |
Price fence (what’s not included) |
| Essentials |
Core deliverables, slower turnaround |
Limited revisions, email support only |
| Standard |
Core + a few high-value add-ons |
Defined number of strategy calls |
| Premium |
Priority access, faster SLA, extras |
White-glove, dedicated team |
Why it works: anchors perception, increases average order value, and lets price-sensitive buyers self-select without you discounting.
4. Mix and match plan archetypes
- Retainer / subscription: predictable monthly fee for a defined scope or access (great for cash flow).