One of the first, and most challenging tasks in establishing a home business is deciding on a pricing structure. This can be especially daunting if you are entering into a new line of work or don’t really have a good grasp on what would be appropriate or “typical” in your field in your area. That’s where a good feasibility study or taking time to do some research can pay off. Still, before you hang up your shingle, you’ll need to know how much you’re going to charge.
I used to do a lot of checking on those “how much you’re worth” articles and websites to see what I should be making based on my skill set and experience. What those resources don’t take into account is the actual area where one lives, the market, etc. So, I decided to go with a combination or balance of what I wanted/needed to make from my home business and what the “going rate” is based on where and for whom I’m working. I started out trying to think in terms of “hours”–how much could I make each hour, but have settled on setting a daily goal for myself. Since I do a variety of projects, jobs, etc. and money comes from a variety of sources, I organize myself by the day and shoot for my target. Some days I go over, and some days I go under my target revenue–but I continue striving toward my daily and monthly goals.
I do have a set “price list” for corporate work that I do. I charge by the page or by the project for most press pieces, newsletters, annual reports, grant proposals, etc. and I make those amounts available to prospective clients. Other work, such as grant research and editing, I do on a “per hour” basis and charge an hourly rate. Of course, when I am working for organizations that have their own pricing structure, then I have to decide if it is worth my time and effort to play by their rules, negotiate for more money, or move on to something more lucrative.
For many of us in business for ourselves, we have to balance the work and pay with how quickly and certainly we’ll get paid. Sometimes, it helps to take the steady or definite pay check over a more lucrative “possibility.” If you are working in direct sales or as a representative, your pricing structure may already be set and you don’t have much say.
One of the great things about being in business for yourself is that you do have some control–you can take some time to figure out how you’d like to market your efforts and how much you ‘d like to (and how much is realistic) get paid for your work. A lot of it will depend on where the income or revenue is coming from and how much time you have to spend invoicing, billing and collecting, but I think we should take advantage of our business-ownership status and work toward establishing our own pricing structure that is fair and financially advantageous. After all, we are IN business!
See Also: The Pro Bono Question, Getting Comfortable Talking About Money, and Should You Be Using Contracts