How should I price my services?

For small service-based businesses

If you’ve ever stared at your prices and thought, “Am I charging too much, or not enough?” you’re definitely not alone. Almost every small business owner wrestles with pricing.

It’s one of those topics that is equal parts maths and emotion. You want to earn fairly, but you also want the freedom and flexibility you started your business for. You want to feel confident when you say your price out loud, not panicked that someone will say, “That’s too expensive.”

Pricing isn’t just about numbers. It is about understanding the value of your expertise, knowing your costs, and feeling confident that you are building a business that can actually sustain you for the long term, without having to work every hour of the day. It is also something that evolves as your experience, clarity, and confidence grow, so it is completely normal to revisit and refine your prices over time.

Stop charging your "worth" and start pricing your solution

You’ve probably heard the phrase “charge your worth”. It sounds empowering, but it is usually terrible advice.

Your prices should never be based on how you feel about yourself. As a service provider, your fee reflects one thing: the market value of the solution you provide. Your client is paying for your expertise, the problem you solve, the time you save them, and the impact on their business, not for who you are as a person.

When you detach your price from your personal worth, you free yourself to make clearer decisions and charge appropriately for the value you deliver.

Common pricing mistakes

Before we get into what you should do, here are the traps most service providers fall into.

Copying someone else’s pricing without understanding their business model. Underpricing to get clients, which often becomes a race to the bottom. Forgetting to factor in all the non client-facing hours that keep their business running. Pricing emotionally with thoughts like, “I wouldn’t pay that, so they won’t.”

When you do any of these things, you set prices that do not support you. You work harder, take on more clients, and still do not see the financial return you need.

To start, work out your baseline number

Before you can confidently price anything, you need to know what your time is actually worth to your business.

Start with a few key questions.

How many days do you want to work each year? Be realistic. You need to include holidays, rest days, and time when you simply will not be in delivery mode.

How many hours do you want to work each week? Not every hour can be billable. You will spend time on marketing, planning, admin, client management, service development, and growing the business.

Then decide how much you want to earn in a year. Start with what you need to cover both personal and business costs. Then add the amount you want to pay yourself on top.

Once you know that number, divide it by the number of billable hours you can realistically deliver in a year. That gives you your base hourly rate. You may not charge per hour, but this number sits behind everything and it is the figure you should not go below. It removes guesswork and helps you make decisions based on facts, not fear.

Once you understand your baseline, the next step is to consider how your pricing reflects the value you deliver.

The price is in the value, not the hour

Your baseline gives you the minimum your business needs to earn, but it is not the number you present to clients. What you ultimately charge needs to reflect the value you create, the problem you solve, and the needs of the specific clients you want to work with.

This is where your target market becomes essential. Different clients value different things. Some want speed, some want certainty, some want expertise, and some want support or clarity. Your pricing should reflect the level of impact you create for your audience, not just the time something takes you.

If you only charge by the hour, you limit your ability to earn because there are only so many hours in the week. As you become more experienced and more efficient, you run the risk of earning less for the same or better results. It also makes it harder for clients to understand what they are investing in. Most clients want to know what they will receive, how it will help them, and what outcome they can expect. Hours alone rarely communicate that.

This is why it can help to create services based on deliverables and outcomes rather than time. It gives clients clarity and it allows you to price according to the value and impact of the work. Whether it is a one off project, a clearly defined package, or an ongoing retainer, anchoring your pricing to the result, not the minutes, creates a more sustainable model that supports long term growth.

When you combine your baseline, a clear target market, and a focus on the value you deliver, you create prices that are fair, strategic, and aligned with the outcomes your clients need.

Final thoughts: your pricing is your business model

Your pricing sits at the heart of your business model. It influences your capacity, your earnings, your energy, and the clients you attract. Do not let the fear of hearing “that is too expensive” keep your prices low. If you are not making enough money, you will not be able to sustain the business long enough to serve the clients who need you.

Take one small action today. Choose one service you offer and sense check whether it still reflects the value you deliver. If it does not, it is time to adjust it. Your pricing will evolve, and the more clarity you build around it, the more confident you will feel.

This blog only scratches the surface. Creating a pricing strategy that is clear, consistent, and profitable is challenging when you are emotionally connected to your business. If this has highlighted that your pricing model is unclear or holding you back, getting strategic support can give you the distance and clarity to fix it properly. That perspective is often the fastest way to build a confident and sustainable business.

Next steps...

If you want support to make clearer decisions, build confidence in your pricing, and create more focus in your business, you’re welcome to join The Strategy Space. It is my guided community for small business owners who want protected time each month to think strategically and take purposeful action.

And if you prefer to start with something lighter, you can sign up to The One Thing, my weekly email that helps you cut through the noise and focus on what really moves your business forward.