project_log: 020

Yo.

When I started freelancing, I charged $3K per website (on average).

I'm now charging $10K.

I've been able to 3x my business because of the most important lever we have as service providers: pricing.

I wasted months figuring this out through painful trial and error so you don't have to.

Let's go back a year.

I'd been freelancing for 6 months and had a few projects under my belt. I knew it was time to increase prices. I searched the internet for advice on how to do this. Unfortunately, the majority of it fell short.

The problem with common pricing advice is that it tells you what to do, not why to do it.

Advice like "Just raise your prices" has good intentions but is unhelpful. It fails to recognise the emotional baggage that comes with raising your prices. The fear that if I raise prices, I might get a "No" from a client I need.

Instead, I needed to understand what contributes to price and the variables that control it.

The Contributors of Price

There are going to be business-specific variables that apply to your business. For me, that's the size of the website I'm building, the functionality it requires, the level of motion design and development needed, etc.

I'm not going to cover these because they are industry-specific. Instead, I'll talk through factors that apply to every service-based business:

Business Impact

You might have heard someone say: "Price based on the value you create." What they mean is, price based on the impact your services have on your client's business. If I build a website that's crucial for the operation of the business (let's say an ecommerce store), I'm going to charge significantly more. Why? Two things:

1. The website is extremely valuable to the business. If it performs, the client will make significantly more than what I charge them.

2. The risk is massive. If their site goes down or has security issues, it's not just an inconvenience. It's lost revenue, damaged reputation, and potential legal headaches. My expertise directly reduces these risks. They're not just paying for a website. They're paying for peace of mind and protection against problems that could cost them far more than my fee.

Timeline

This one is simple. If the client needs it done yesterday, they get charged more. The reason: Moving to the top position in the priority order has a cost. That said, the client doesn't get a discount if they are happy to start later.

Opportunity Cost

Longer duration projects take away our ability to pursue new opportunities. This means they have a higher opportunity cost than a shorter duration project. Higher opportunity cost = Higher price. I disagree with the advice that a retainer should be priced lower because it's consistent work. It closes doors, which has a cost.

Factors I Focus on to Increase Price

Speed

I define speed as the time it takes to go from idea to execution. If we are fast, we can charge significantly more. The problem is, most people think of speed only as how fast they can do the work, skipping items like:

• Client onboarding

• Scoping and estimation

• Project handover and training

Clients are happy to pay more when you speed up every part of the project, not just the deliverables.

Speed is the reason I'm building Ballpark. It's an embeddable widget that speeds up the scoping and estimation phase by providing instant estimates on your services.

Proof

You will be able to charge more for something you've done before. A client will perceive that if you got these results for a similar business, you'll be able to get results for them.

Demand

Think of demand like an auction for your services. The more people bidding, the higher the price is going to go. The more people wanting to work with you, the higher price you can charge.

This is great, but how do I get over the mental hurdle when comes time to raise my prices?

Instead of doing one major 200% jump, raise your price 10-20% with every new client you bring in. Next time you get asked for an estimate, increase it by 10%. I bet the client won't even flinch.

I've found that the percentage you increase by is directly related to the amount of demand you have. I am less scared to raise prices by a higher amount IF I have lots of demand. I'm not worried about the client saying "Too Expensive" because I have 5 other people wanting to work with me.

Recap

Before I could raise prices, I needed to learn what impacted price: business impact, timeline, and opportunity cost.

Once I understood this, I needed to focus on areas of my business that made increasing prices easier. Those were: speed (in more areas than just deliverables), proof, and demand.

And finally, to overcome the fear of raising prices, I use the incremental method. Instead of a big price jump, I do many small increments.

Give it a go. It might just double your business this quarter.

Ballpark Update for Those Interested:

(For context, Ballpark is an embeddable tool that sends ballpark estimations on your services automatically)

I've spent the last week preparing to launch a Ballpark widget on my own website. I set up a quick landing page to capture waitlist emails while I prep for the beta version. Ignoring the copy and product screenshot, how did I do for 2.5 hours? (Roast away).

Launching on my own site means I have to create my own flow of questions. I found it super useful using AI to create questions in a logical order for my prospective clients. This sparked an idea for a prompt library to help with user onboarding. Use this prompt, answer these questions, receive a personalised question flow, etc.

Obviously, this will have to wait until we are live, but I thought it would be a cool value-add.

That's all for this week. Stay tuned at over-stimulated.com. There might be an estimation widget on there soon...

- Will