~by Haley Lynn Gray~
Two separate problems get tangled together here, and they need different answers.
The first is working out what to charge. The second is saying the number out loud without flinching.
Most advice covers one and skips the other, which is why people either have a defensible price they can’t say, or great delivery on a number that’s too low.
Part one: setting the price
Start with your real cost, and be honest about your own time. Not just materials and subcontractors — your hours, at a rate you’d actually accept. Most owners discover their “profitable” work is profitable only because they’re working free.
That number isn’t your price. It’s the floor below which the work is costing you money.
Then look at what the outcome is worth to the client. If your bookkeeping saves someone eight hours a month and prevents a penalty, its value isn’t your hourly rate — it’s what those hours and that risk are worth to them. Pricing against value rather than effort is the single biggest shift available to most service businesses.
Use the market range as information, not instruction. Knowing what others charge tells you what buyers are used to. It doesn’t tell you what you should charge, because you don’t know their costs, their margins, or whether they’re quietly going under.
And check whether you’re underpricing. Three reliable tells:
- You almost never lose on price. If nobody ever says you’re too expensive, you’re too cheap. A healthy loss rate on price is normal — winning everything means you’ve left money on every job.
- You’re busy and tired and the bank balance doesn’t reflect it. That’s an underpricing signature.
- You dread certain jobs. Usually the ones where the price stopped matching the work some time ago and you haven’t revisited it.
This is where I’ll say the unpopular thing: in my experience, women in business underprice more consistently than men do, and the reason isn’t confidence in the abstract. It’s an accumulated expectation of having to justify the number, which makes a lower one easier to defend. Charging less is quieter. It’s also how you end up running an exhausting business that doesn’t pay you.
Part two: talking about it
Establish value before price. When someone calls my home care agency, the first question is frequently “how much do you charge?” Not all agencies are the same, so that’s not actually the right question.
Our caregivers go through a national criminal background check, a drug screen, reference checks, a nursing registry check and multiple interviews before they ever enter a client’s home. We use GPS for timecards, so we can verify the caregiver is actually there when they clock in and out — some agencies still use paper. We do unannounced supervisory visits while caregivers are working, because that’s our standard of care. It isn’t everyone’s.
None of that is visible in an hourly rate. Quote the number first and you’re comparing identical-looking services on cost alone, which is a race to the bottom and you will lose it to someone doing less.
What to actually say when they ask first. “Avoid the question” isn’t useful advice without the words, so here they are:
“It depends on what you need — can I ask a couple of questions so I give you an accurate number rather than a wrong one?”
That’s not evasive. It’s true, it’s reasonable, and almost nobody objects. Two or three questions later you know what you’re quoting for, and they know rather more about what they’re buying.
Then say the number and stop talking. This is the single most useful mechanic in the whole subject.
The silence after a price is uncomfortable, and the instinct is to fill it — with justification, with a discount, with “but we could look at a smaller package.” Every word after the number weakens it. Say the price, then wait, however long it takes. Let them respond first.
And practise saying it out loud. In the car, in front of a mirror, to a friend. If you’ve never said “four thousand two hundred pounds” aloud, the first time will be to a client, and the hesitation will be audible. They’ll hear uncertainty and read it as room to negotiate — which, at that point, it is.
When they say it’s too expensive
Usually it means one of three things, and they need different responses.
“I don’t see the value.” Most common. The answer isn’t a discount, it’s returning to what they’re actually getting — the things that aren’t visible in the number.
“It’s genuinely outside my budget.” Fine and honest. You can offer a smaller scope at a lower price, or refer them elsewhere. What you shouldn’t do is the same work for less, which trains them and costs you.
“I’m testing whether you’ll move.” Some buyers always ask. If you drop immediately, you’ve told them the first number was invented — and they’ll wonder what else is.
Holding a price pleasantly is a skill and it’s learnable: “I understand — that’s what it costs to do it properly. If the budget doesn’t stretch, here’s what I’d suggest instead.”
The underlying point
You can compete on price or on what you actually deliver. Competing on price is a race to the bottom, and the winner runs an exhausting business with no margin to improve anything.
Competing on what you deliver requires two things: being genuinely better in ways you can articulate, and being able to say the number without apologising for it.
The first is about the business. The second is entirely about practice.
More on working out what an hour of your time is worth and why busy and profitable aren’t the same.
About the author
Haley Lynn Gray is the founder of Leadership Girl, of In2itive Biz Solutions, and of the Women’s Entrepreneur Network — a community of more than 77,000 women in business.
She writes here about what happens when running a business starts demanding that you lead one. More about Haley →
