12d โข Business & Strategy ๐ง
First Client Pricing - The Formula That Removes Guesswork ๐ฅ
Charged $400 for first project. Should have charged $2,000.
Here is the formula I use now.
THE PRICING FORMULA:
Step 1: Ask how many hours they spend on the task weekly
Step 2: Multiply by their hourly cost (or estimate $30-50 for staff)
Step 3: Multiply by 52 weeks = Annual cost
Step 4: Charge 10-20% of annual savings as setup fee
THE EXAMPLE:
Prospect: "We spend about 10 hours weekly on invoice entry."
Their hourly cost: $35/hour
Annual cost: 10 hours ร $35 ร 52 = $18,200
My fee: $1,820 setup (10% of annual savings)
Monthly: $150 (covers monitoring and support)
THE CONVERSATION:
"You're spending $18,200 annually on this task. My setup fee is $1,800 with $150 monthly. You save $16,000 in year one alone. The system pays for itself in the first 6 weeks."
THE PRICING TIERS:
STARTER (First 3 clients):
Setup: $500 - $1,500
Monthly: $100 - $200
Why lower: Building portfolio and testimonials
CONFIDENT (After 3 clients):
Setup: $1,500 - $3,000
Monthly: $150 - $300
Why: You have proof and confidence
SPECIALIST (After 10+ clients):
Setup: $3,000 - $5,000
Monthly: $300 - $500
Why: Niche expertise commands premium
THE PSYCHOLOGY:
Never say: "I charge $50/hour"
Always say: "The investment is $1,800"
Hourly = Commodity
Project-based = Solution
THE RULES:
Rule 1: Never charge less than $500 for setup (signals professional)
Rule 2: Always include monthly retainer (recurring revenue)
Rule 3: Quote based on their value, not your time
Rule 4: If they say yes immediately, you priced too low
What is the annual cost of your prospect's manual process?
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First Client Pricing - The Formula That Removes Guesswork ๐ฅ
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