If you’re a self-employed service provider with one to three main offerings wondering whether the numbers work for you to provide the service you have in mind and bring home the profit you need in the time you have available, then this two-part series is for you.

Last time, we worked out how many clients you can serve as a service provider. We ensured that you’re not going to burnout by accounting for all the time off you want and need, and how much time it actually takes to deliver your various services.

In this post, we will focus on the money. We’ll look at your prices and profits to ensure this is financially sustainable for you.

There is a spreadsheet you can use to follow along – get yours here. In the last post, we tackled the top part (down to Client slots in yellow); today, we’re tackling the bottom part.

increasingly tall stacks of coins with trees growing out of the tops of them, indicating monetary growth

Your main package price

In our running example from the previous entry, we decided to aim for 7x client slots at 10 hours per month each.

So now we’re onto pricing.

How much do you charge for your main service? Let’s say you charge £600.

First, let’s look at what that makes your hourly rate. You may never quote an hourly rate to your clients, but it’s a good figure to work out internally.

Since this service takes 10 hours, your hourly rate would be £60.

Money mindset

Now stop and consider that number.

Are you comfortable charging that? With your experience, education, and the results you’ve helped your clients get, does that sit right in your gut?

Does it seem too high? Too low?

If it seems too high, then you won’t feel comfortable asking for it. I believe service providers lose more prospects from this discomfort than anything else. You might automatically offer a discount when you’re on a sales call, and never know that they would have paid full price. Or you might simply exude discomfort, so that your prospect feels that something is off and is driven away by that. There are a million ways things go wrong when we’re not comfortable and confident with our pricing.

In my experience, the key with mindset work, including money mindset, is to tackle things bit by bit. Don’t jump from a £25/hour rate to a £500/hour rate and expect it to work. Your mind isn’t ready for that, and you will subtly (or not) self-sabotage your efforts to charge that price.

So, if £60/hour seems too high, pick a lower package price for now. You can always raise it in the future.

If it seems too low, pick a higher price.

For now, let’s stick with £600 per package.

thinking woman in grey


If we sell all 7 slots each month, then we’ll earn 7x £600 = £4,200 revenue.


How much are your average monthly expenses?

You might have some expenses you only pay annually or quarterly, so get your last 12 months’ expenses from your profit and loss report from your accounting software. Divide the total by 12.

Let’s say your expenses in the past 12 months totalled £6,000, so your average monthly expenses were £500.


However, if you finished with any large expenses in the past 12 months that you don’t expect to repeat, ignore those.

Perhaps you were paying £250 per month for 12 months for a course or programme, which is now finished. In that case, you’d only use £250 average monthly expenses.

But then you remember you just brought on a new team member who you’re paying £250 per month to. So we’ll carry on with £500 average monthly expenses.


We’ll take our £4,200 sales per month and subtract our £500 monthly expenses to get £3,700 profit per month.

Multiplying by 12, we’ll get £44,400 profit per year.

businesswoman with money raining down


Taxes are complex and highly dependent on your individual circumstances.

We’ll do a very simple, basic calculation here to get a back-of-the-envelope idea of what our take-home pay might look like, assuming you’re a sole trader in England or Wales.

If you’re a director of a limited company, ask your bookkeeper or accountant to work out your likely take-home pay out of the profit you’ve worked out (£44,400 in our example).

First tax bracket: £0 to £12,570 profit

The personal allowance is currently £12,570, which means you pay 0% tax on that part of your profit.

Second tax bracket: £12,571 to £50,270 profit

Income tax and NICs are 29% total for profit in this bracket.

So in our example, we’ll find out how much of our profit is in this tax bracket by: £44,400 – £12,570 = £31,830

Then, we’ll multiply this by 29% to get £9,230.70. That’s how much we’ll expect to pay in tax.

Third tax bracket: £50,271 to £125,140 profit

Income tax and NICs are 42% total in this bracket.

Also, you start losing the personal allowance above £100,000.

This doesn’t apply to our example.

Generally, if you’re earning this much profit as a sole trader, you’ll want to consider incorporating (starting a limited company). As you approach £50k annual profit, consult with a chartered accountant familiar with incorporation to have them check whether it’s right for you.

If you want to play around with larger numbers like this, you’ll defnitely want to get the spreadsheet.

bronze scales

Top tax bracket: £125,140 and more profit

Income tax and NICs are 47% total in this bracket.

This also doesn’t apply to our example.

house in countryside with purple flowersTake home pay

Back to our running example: We’re planning to earn £4,200 each month, which makes £44,400 profit per year.

We’ll pay £9,230.70 in income tax and NICs, leaving us with £35,169.30 annual take-home pay.

Let’s divide that by 12 to get an average monthly take home pay of £2,930.78.

Now consider your household bills, desired disposable income, savings plans, and all the rest: does this suit your needs? Is it at least as much as you need?

Stress testing

What if you only had 4 client slots filled each month?

Then you’d bring in £600 x 4 = £2,400 revenue each month.

After your £500/month expenses and paying taxes, you’d bring home about £1,653 per month.

Is that at least as much as you need?

If so, hooray! This set up is financially sustainable, and you can now shift confidently to marketing your service packages to attract your 4-7 clients each month.

If not, what can you tweak to get what you need?

Increasing your take home pay

We put lots of numbers into this calculation, which means there’s lots to play around with to tweak it so that it gives you what you need.

  • Can you increase your package price?
  • Can you increase the proportion of your time you spend on client work?
  • Can you find any efficiencies to decrease the time to deliver your service?
  • Can you work more days per week or hours per day?
  • Can you decrease your expenses?
  • Can you take any less holiday?

I’ve listed these in approximately the order of the most impact they’ll have on your final calculation, but you should play around with the numbers yourself to see how they work in your situation.

An example

Let’s say you need at least £2,000 take home pay per month, assuming you are at least 60% booked.

  1. single red thread wound through many white threadsIf you shifted 15 hours per month from marketing, admin, etc, to client work, you’ll increase your client time to 61% from 50%.
  2. This increases your number of slots to 8.5, so 60% capacity is now 5.1 clients; we’ll assume you’re aiming for 5 clients and not cutting people into bits.
  3. Perhaps you do this by hiring a VA at £300 per month for a 10-hour package.

    • Your VA is working in their zone of genius, so they should be able to complete the tasks you most dislike in less time than it takes you.
    • This will increase your expenses, so remember to add that in: your total average monthly expenses are now £800.
  4. Perhaps you raise your package price from £600 to £620 per month.
  5. Perhaps you find £100 of regular monthly expenses you can cut.

    • Now your total average monthly expenses are £700.

Now, if you have 5 clients (60% capacity) each paying £620, you’ll get £3,100 revenue per month.

Subtract your average monthly expenses of £700 to get £2,400 profit per month.

You should set aside around £392 per month for tax savings (but check with your bookkeeper or accountant for your specific situation), leaving you with approximately £2,008 per month of take-home pay.


You’ve considered your pricing, along with some money mindset considerations therein.

You’ve considered your expenses and taxes so that you have a ballpark idea of your expected take-home pay.

You’ve considered your minimums needed, so you can simply focus on that number of client slots, which is a smaller, easier, more tangible number to keep in your head than summing the sales revenues of several different clients at different price points.

If you need more take home pay, you’ve played around with the different numbers we’ve put into our calculation to see how you can improve your numbers.

And now, you’re confident in your numbers, and you’re ready to turn your attention to marketing to attract clients, and then serving them!

Gone are the days when you just hoped that whatever your clients were paying you would be enough.

Now, you have more confidence with pricing, selling, and delivering your services thanks to the structure and flexibility you’ve just created with your well-priced client slots.

That’s the power of knowing your numbers.

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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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Sara-Jayne Slocombe