Are you a service provider whose services don’t currently fetch the rates you need them to? Then read on for 7 ideas that could help you!
We’ll think about ways to:
- Spend less time delivering your services
- Raise your prices
- Add value to your services
What is your hourly rate?
If you bill hourly, your hourly rate is simply what you charge to clients.
If you bill on a package or flat rate basis, your hourly rate is your total sales income divided by the total number of hours you did client work. You don’t need to publish this number, but it’s really good to calculate it so you know that you’re on track to make the profit you need to both survive and thrive.
Total Sales Income
Total Hours of Client Work
=
Hourly Rate
What should your hourly rate be?
To work out what your hourly rate needs to be, check out my free hourly rate calculator for sole traders. This will help you work out what you need to charge to bring in the take-home pay you need, want, and deserve. It will give it to you as annual sales, day rates, and hourly rates, having accounted for taxes and NICs, time off, and non-billable hours.
What if your actual billing is not what you need to survive and thrive?
If this hourly rate dips below what you need it to be, then you know you need to:
- Find ways to spend less time delivering your services
- Raise your prices and communicate the higher value you bring
- Raise your prices and add value
Below are a few ideas and examples for what that could look like for you.
1. Automate what you can
For example, perhaps you’re a branding expert with a package to define the client’s brand. You’ll need the client to provide you with things like their Unique Value Proposition, target market, their current assets (logo, social media handles, brand photography), mission, vision, competition, and perhaps more before you can really get started.
If you can automate the collection of these through a form, or a series of forms, instead of sitting in meetings with the client, you can cut down the time you need to deliver the service.
You will, of course, still want to work through for and/or with them their brand voice, language, personality, a SWOT analysis, and more.
Automating what you can saves you time and means you can improve your profit (and help more clients).
2. Outsourcing parts of your service
Remember, outsourcing can apply to parts of your service, rather than just the administrative and marketing tasks.
For example, if you’re a musician, you could find audio editing a real struggle that saps your energy and takes far longer than you would like. This would be a prime example of something to see about outsourcing to someone specialising in that area.
It’s still part of your service: when a client hires you to produce a tune that they can use at the start of every video or podcast they make, they’ll need the finished product, not the unedited music, so you’ll ultimately provide that to them. But if you can focus on the parts of your service that bring you joy and energise you, you will generally work faster (and like your business more).
Or, you could be a social media manager. Perhaps you really enjoy the strategising. You could carry on doing your brand-building work with clients, deciding on overall strategies, and then creating content plans. You could outsource the actual content creation and/or scheduling.
Or, if you’re a coach or teacher, you could train others in your methodology. Then you could run a very large group programme, with small groups centred around your associate coaches.
3. Communicate your value
Highlight why what you provide is worth the higher price.
For example, perhaps you’re a copywriter. While it’s true that there are copywriters working for as little as £12.59 for 500 words on Fiverr, your competitive edge might be that you
- Use no AI,
- Specialise in and understand the client’s industry,
- Get to know the client and their unique selling proposition, and
- Offer unlimited revisions.
Basically, you produce copy that’s correct, not plagiarised, and suited well to the client. Great! Now highlight that to make the value of your copy more obvious to prospects, so they are happy to pay £100 instead of £12.59.
4. Collaborating to produce a complete package
For example, if you’re a branding photographer, you could create a photo shoot package where there’s an interesting location, a makeup artist, a hair stylist, and an array of clothes and props.
Clients could book knowing everything will be supplied so they look their best. They can save time and money on their own hair, makeup, and clothes, so it’s an incredible value add for them. You can then charge more, and everyone is happy.
Or, a graphic designer, website designer, and website developer could collaborate to create a complete, premium package where each major component of a website is at a high quality.
Or, a copywriter and an SEO expert could collaborate to create blog posts that both establish authority and credibility and show up in search results so they’re more likely to be read.
5. Learning new skills to add a little something extra
For example, let’s say you create presentations. Clients could use these in webinars to attract new clients, or in pitches to attract new investment, or in sales calls to convert prospects.
If you learn how to create simple animations to add to these, that adds incredible value for your client, and helps you increase your prices.
Or, you could be a copywriter who writes many blogs. If you also become adept at SEO, that adds value to your clients – now these brilliant credibility-establishing pieces are more likely to be read. You can then charge more.
6. Using more luxurious packaging
For example, if you’re a high-end jewellery maker, many of your sales may be for gifts. Using luxurious packaging that’s both ready to be gifted and easy for your customer to open to look at the piece before giving it adds value. They don’t have to spend time or money wrapping it. They don’t have to re-wrap it because they wanted to look at it after they received it before they give it away. A suitable box may cost you £1 or less and yet let you successfully raise your price by £10 or more on that item.
7. Provide a joyful onboarding experience
Onboarding can be quite dull, and in some industries quite lengthy. That’s the opposite of what you need: the client is most excited the moment they make the purchasing decision. Embrace and enhance that enthusiasm. This increases the perceived value of your service, and helps the client feel like they’ve made a good decision. That attitude helps you both have a better working relationship, experience, and outcome.
This could look like sending a physical welcome pack. If the client will have to do deep thinking as part of your service (for example, branding), a branded notebook would fit well in this. It could include a pamphlet about your services, what to expect, etc.
This could look like simply sending flowers, chocolates, or wine to the new client.
This could look like having an onboarding series of emails ready to go that emphasise how excited you are to be working together. These should cover what the next steps are, what to expect, what your boundaries are, what outcomes they should expect, what they’ll need to do, and so on.
If you meet with your client as part of your process, remember to be happy and excited to see them. Make them feel wanted. Remember what the queen of poetry said:
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
— Maya Angelou
Remember to translate this higher perceived value into testimonials by asking your clients for them. This will help you convey the higher value to prospects, enabling you to charge more.
Prepare a form, or a template email, or a set of questions to ask, and – this is critical – ask for this feedback before your service is complete.
When the project is complete, the client is focused on the next thing they need to sort. So you may have given them a brilliant branding service, and now they want to have a website built. They’re not really thinking about your service anymore, and it’s harder for them to speak to what it was like for them before they started using your service.
So, at the first point where you think they’re starting to see the transformation your service provide, ask if you can stay on the line for an extra 10 minutes at the end of that session to ask for some feedback. Get permission to use it as a testimonial. This is one of the best ways to translate your joyful onboarding experience (especially if you ask them about it) into a higher perceived value for prospective clients.
Hopefully this has given you some thoughts on how to improve your profitability as a service provider!
Hi, I’m Sara-Jayne Slocombe of Amethyst Raccoon. I help your small business thrive using the power of your numbers, empowering you so that you have the confidence and knowledge to run your business profitably and achieve the goals you’re after.
I am a UK-based Business Insights Consultant, which means I look at your data and turn it into information and insights. I separate the noise from the signal and translate it all into actions that you can actually take in your business.
I also facilitate the Power Pod Roundtable, which is a business discussion group, and the AIM HIGH Mastermind, which is a small group of business owners who want to move their businesses forward.
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