To calculate the price I take net cost, customer value and average market price in consideration.
- To come up with net cost you should think like a business owner. Net cost is not based on an hourly rate — it is formed depending on wages, rent, taxes, equipment modernization and business development funds. Keep in mind that the project can take more time than planned, the customer can "freeze" the project or negotiations with a new client can take too long. At the same time, you need a financial safety cushion to keep your workflow stable. Do not forget that your expenses will constantly increase.
- The customer value is represented by benefits customers receive or losses they are able to avoid. The intangible values like a brand of a product/service can be omitted. Customers are ready to "overpay" for a guarantee that you are doing a good job on time. Delivering that confidence to a client is one of the cornerstones of your profit.
- The average market price is a controversial term. Different companies provide the same services in a different way: they execute different amounts of work, provide different level of expertise, different terms of execution, etc. Your task is to justify the price in a competent way. The price too high or too low is going to raise certain questions and doubts.
Do not forget that people tend to communicate and conduct business with their own kind. A successful customer is likely to decide to work with a successful company/freelancer. A good car, expensive clothes and accessories indirectly indicate that the contractor earns well and has enough customers who are willing to pay well. This acts as a sign of professionalism, efficiency and quality of services.