Entrepreneurs experience stark differences in costs among clients. The old 80/20 rule – that 20% of customers take up 80% of your time – may be an exaggeration, but it should not be ignored. It is integral to several factors that should be taken into consideration when developing your pricing strategy. Properly weighing and tracking each of these elements is essential to getting paid for every minute of work you do.
First, be sure to account for all costs directly associated with specific projects, to recapture them in client billing. Your fees should be high enough to recoup all costs for every single client. Don’t forget supplies, postage, and credit card fees, as well as travel costs, including local travel using your own vehicle.
A second, less obvious element is the time spent with a prospect identifying the scope of work and providing a cost estimate. Although this time is freely given until the engagement is agreed upon, you do want your fee to ultimately cover this time. Also, frequently overlooked is time spent researching and thinking about the optimal approach to a job. Projects of greater complexity call for greater fees.
Last, but certainly not least, is the overall mental anguish with which some clients burden you. These clients are the people who alter their demands after the project commences. They fill your inbox with new information and continual status update requests. By tracking client time history, you will uncover true cost.
By appropriately considering each of these aspects, you can bill accordingly and assure optimal earnings from each client.