Pricing mistakes in custom services
Charging for what the customer sees is a common mistake. In made-to-measure services, well-done pricing considers time, risk and value delivered.
Short answer: the most common mistakes when pricing custom services are ignoring hidden costs and real time, not limiting scope, not allowing for rework, charging only for hours without considering the value delivered, giving discounts without criteria and not raising prices. Avoiding them requires recording time, defining scope in writing and calculating margin. This text is informational and is not financial advice.
Common mistakes and how to avoid them
- Underestimating time. Meetings, messages, revisions, travel and administration also consume hours. How to avoid: record the real time of past projects and add a safety margin.
- Forgetting indirect costs. Tools, taxes, fees, insurance, space and sales time. How to avoid: list all the costs of the business and spread them across projects.
- Open scope. Without clear limits, the client asks for more, and the price stays the same. How to avoid: describe deliverables, deadlines and number of revisions, and charge separately for what exceeds them.
- Not allowing for rework. Adjustments and corrections are common. How to avoid: include a defined number of revisions in the price.
- Charging only by cost. The client also pays for results, experience and trust. How to avoid: consider the value delivered and the problem solved, not just hours.
- Pricing based only on competitors. Each business has its own costs and positioning. How to avoid: use competitors as a reference, but calculate your own floor.
- Discounts without criteria. They reduce margin and teach the client to haggle. How to avoid: offer a discount in exchange for something, such as volume or advance payment.
- Not charging a deposit. It increases the risk of cancellations. How to avoid: agree on payment in stages.
- Never raising prices. Costs rise over time. How to avoid: review prices periodically and communicate in advance.
- A price with no explanation. Vague proposals create distrust. How to avoid: detail what is included.
A simple calculation
Add up direct costs, indirect costs and the desired pay, and divide by the hours that are really billable. Then compare with the value to the client and adjust.
Counterpoints
Charging more is not always possible in very price-sensitive markets, and each service has its own particularities. Reviewing the calculation with an accountant or mentor can help.