How to Set Your Prices the Right Way (and Stop Losing Money)

Let’s talk about how to set your prices — and how to avoid the pricing mistakes that keep freelancers and small business owners underpaid and overworked.

Whether you're freelancing, consulting, or running a service-based business, your pricing strategy is one of the most powerful tools you have. But too often, we guess, copy competitors, or price from fear — and that’s how we end up stuck.

So let’s walk through some of the most common pricing mistakes, how to fix them, and a 3-step value-based pricing strategy that actually works.

❌ Common Pricing Mistakes That Hurt Your Business

Mistake #1: Undercharging to Attract Clients

When you're starting out, it’s tempting to lower your rates just to get a “yes.” But this sets the wrong expectations and keeps you working too hard for too little. Undercharging is one of the fastest ways to burn out.

Mistake #2: Copying Competitor Prices

Every business is different. Your small business pricing should reflect your unique costs, value, and goals — not just what the next person is charging.

Mistake #3: Ignoring Overhead Costs

Rent, software, taxes, admin time — these all add up. If you don’t include these in your pricing strategy, you’re leaving money on the table.

Mistake #4: Pricing from Fear

You’re not “too expensive” — you’re just not for everyone. Let your price be a filter. Value-based pricing attracts the right clients who respect what you do.

✅ A 3-Step Pricing Strategy That Actually Works

This simple framework helps you stop guessing and start charging based on real numbers and real value.

1. Know Your Numbers

Before you can price anything, you need to know:

• Your monthly business expenses

• Your desired take-home income

• How many billable hours you can actually work

• Taxes (plan for ~30%)

Example Pricing Calculation:

Want to make $5,000/month working 100 billable hours?

• $5,000 ÷ 100 = $50/hr

• Add 30% for taxes = $65/hr baseline rate

Need help calculating this? 👉 Grab the free pricing worksheet

2. Price for Value, Not Time

Value-based pricing shifts the focus from hours to outcomes. What results are you delivering? What problems are you solving?

Instead of hourly rates, consider:

• Flat-rate service packages

• Tiered offers

• Retainers or recurring monthly plans

Clients care more about what they’re getting than how long it takes.

3. Stick to Your Rates with Confidence

You’re not being greedy — you’re being sustainable.
When your prices are backed by math and value, you don’t have to justify them.

Consistency in your pricing builds trust and positions your brand as professional and dependable.

💻 Calculate Your Hourly Rate Step-by-Step

Let’s walk through a sample calculation.

1. Annual expenses: $30,000

2. Your salary goal: $50,000

3. Add 30% for taxes/overhead: $39,000

4. Total needed per year: $119,000

5. Billable hours per year: 1,200

6. Hourly rate: $119,000 ÷ 1,200 = ~$99/hour

This is your true cost — not a guess. That’s the difference between thriving and barely scraping by.

🎥 Prefer to Watch?

This blog is based on my YouTube video:
▶️ How to Set Your Prices the Right Way (and Stop Losing Money)

If you're more of a visual learner, I walk through this exact pricing strategy on video.

💬 Final Thoughts: Set Your Price, Own Your Value

The best pricing strategy isn’t based on emotion or competition — it’s based on truth.

Your pricing should reflect your:

• Costs

• Time

• Expertise

• Value

If you’re ready to stop playing small and finally get paid what you’re worth, start here. You’ve got the tools — now it’s time to use them.