Should You Raise Your Prices? The Numbers Don't Lie
Have you ever thought to yourself, "am I charging enough?" Maybe you try to convince yourself that you are in fact charging enough, because the idea of raising your prices makes your stomach turn... "But what if clients leave...?" so you drop it. But there's another part of you, that maybe you're trying to ignore that's shouting "but I need more money". If the answer is yes, we need to chat.
I get it, price increases feel scary. And if you're someone who wishes you could provide your services for free because you know how essential they are, I see you. But here's the thing - you have bills to pay too. You're a person with real financial needs, and if you don't take care of yourself, you won't be able to show up fully for your clients either.
Some simple math can help us figure out what you should actually be charging. So how do we separate fact from feeling? To start, pull up your profit and loss statement and let's do some math.
Calculating Your True Hourly Rate
If you're charging $100 an hour, let's figure out what you're actually taking home.
Start with what your revenue was last month. Now subtract:
Business expenses (software, insurance, office supplies, rent, and that coffee meeting with your mentor)
Taxes (roughly 25-30% is a good rule of thumb, but it varies by business)
The time you spent on "non-billable" work (emails, admin, marketing, sales)
Divide that by your “billable” hours (work directly invoiced to clients) for the month and suddenly that $100/hour is looking more like $45/hour. And that's before we factor in any time off, sick days, or the vacation you've been promising yourself for two years.
The point isn't to feel bad about your rates - it's to get clear on what's actually happening with your money.
So What Should You Actually Charge?
Here's a simple framework to get you started, keeping in mind that every situation is different, and you know your business best:
Start with your life expenses. What do you need to take home each month to cover your personal bills, savings, fun, and have a little breathing room?
Add your business expenses. All those monthly costs that keep your business running.
Factor in taxes. That 25-30% we talked about earlier.
Account for time off. You're human, you get sick, you deserve vacations. Don't forget to pay yourself for those days too.
Divide by your realistic billable hours. Not the hours you work, but the hours you can actually bill clients for.
This is general guidance, not personalized advice. Your situation might have unique factors that change everything. When in doubt, it's worth chatting with someone who can look at your specific numbers.
Signs Your Pricing is Actually Working
On the flip side, here's how you know when you've got it right:
You're not constantly stressed about money.
You can pay your bills without that pit-in-your-stomach feeling.
You can afford to take time off.
Whether it's a sick day or an actual vacation, you're not panicking about lost income.
You're attracting clients who value your work.
They pay promptly, respect your boundaries, and don't try to negotiate every single thing.
Your business is growing without you working more hours.
You're making more because your rates support your goals, not because you're hustling harder.
You feel good about what you charge.
No guilt, no constant second-guessing, just confidence in your value.
So, do your current rates support the life you actually want to live? Not the "someday when I'm more successful" life, but the life you want right now.
If the answer is no, that's okay. It just means it's time to adjust. Your rates aren't set in stone, and charging what you're worth isn't selfish - it's sustainable.
The right clients will pay for good work. The ones who won't were never your ideal clients anyway.
Still not sure where your pricing should land? Every business is different, and sometimes it helps to talk through your specific situation with someone who gets it. Feel free to reach out if you want to chat about what makes sense for your business. Book a Discovery Call to get started.
