Articles

Getting the Numbers Right

A Simple Formula for Profitable Pricing
by Ilise Benun

Are you losing money on the projects you're working on today? Did you price them high enough?

To answer the question, you must know what it costs to produce each project. However, many designers don't know how long it really takes– in fact, they don't want to know. But if you're not profitable, you need to know and soon!

Here's a simple way to calculate your pricing if you want to be profitable: multiply the number of hours a project takes by 3, then multiply that by your hourly rate.

So, if the last simple web site you designed took 10 hours, price the next as if it will take 30 hours. It sounds like a lot but that extra 20 hours will keep you safe; it will cover your overhead (expenses and benefits) as well as any glitches or delays in the process.

And don't forget the price of your perfectionism: the extra time you spend on a project to get it right isn't factored in when you do your proposal because you want the project, right?

Pricing profitably isn't complicated. It simply requires some self discipline and the right tools to track your time so you can gather the information you need to price profitably. Once you know how much you need to charge to make a profit, you can go find the clients who can afford that.

That's why we are pleased to make this powerful offer: Sign up for a free half hour session with Marketing Mentor, Ilise Benun (phone or Skype) and you'll get her brain on YOUR business PLUS 1 free month of the most effective tools to grow your business: time tracking from FunctionFox and email marketing from Emma. Ideal for freelancers, especially if word of mouth isn't working anymore. Details »

This article has been written by Ilise Benun of Marketing Mentor. For more articles and resources, see www.functionfox.com/articles/.