Am I charging enough? (and how to know when it’s time to raise my prices)
Let me take a wild guess.
You’ve had this thought at least once (probably more than once):
Am I charging enough?
Who am I to charge $___?!
If I raise my prices, will I scare people away?
Friend, you’re not alone. Not even close.
I struggle with this myself: I don’t have a business degree, I don’t have appearances on Oprah or the Today Show. But still, I’m undervaluing myself because what I do have is time in the trenches.. just like you.
I’ve had real conversations recently on this very topic. Questions of “who am I to charge $___” and “Why should someone even hire me?” are on the minds of real entrepreneurs. And it’s definitely something worth examining.
First, Let’s Fix the Biggest Myth
I’m guilty of believing: “If I charge less, people will trust me more.” But in reality?
The opposite is often true.
Customers don’t just look at price… they interpret it. Higher prices are often associated with:
Higher quality
Greater expertise
More professionalism ⬅️ And isn’t that what we’re all optimizing for?
Did you know that there are a group of people that will always opt for the highest price option? Given a 3 tiered pricing structure, they will always choose the highest because they are interpreting that as being “the best”.
And here’s the part most people don’t say out loud: Undercharging can actually make people hesitate. It can signal:
“Are they new?”
“Why are they so cheap? Is this a scam?”
“Something feels off here/ doesn’t add up.”
There’s a reason premium brands exist in literally every industry. If we (I’m just going to say we because I need this pep talk just as much as you do) truly are giving our very best, making our product or service the best experience we can, why should our products/ services be any different than the so called premium brands?
Also, More Clients ≠ More Profit
This pill can be a bit hard to swallow. If I have more clients, doesn’t that mean I have that many more people paying me? Ehh.. not really. I know you’ve experienced the pain-in-the-butt customer who demands the moon and wants everything “thrown in for free”. At least in my experience, those customers are often the biggest cheapskates.
You might NOT need:
more clients
more orders
more chaos from the $5.00 table
What you might need is fewer clients… at better prices.
Because:
Your time is finite
Your energy is finite
Your attention is finite
And burnout? That is real. Perhaps we don’t need more headaches, perhaps we need to spend a little time optimizing our current offerings to bring in better clients.
A smaller number of well-paying clients is often:
more profitable
more sustainable
way more enjoyable to work with
So… How Do You Actually Know What to Charge?
Let’s make this practical. I’ve done some digging here and played around with a bunch of tools. Here are three that you can use today:
1. Service-Based Businesses
📍 Jobber Pricing Calculator
https://getjobber.com/free-tools/pricing-calculator
Plug in:
labor
materials
overhead
desired profit
It gives you a baseline price that actually makes sense. Don’t be afraid to play with the numbers. Ask yourself “What if I want even more profit?”
2. Product-Based Businesses
📍Shopify Profit Margin Calculator
https://www.shopify.com/tools/profit-margin-calculator
This helps you understand:
your margins
your markup
whether you’re actually making money (or just staying busy)
In our retail store, we use tools like this alongside standard market research (that’s a fancy way of saying: I go to competitors websites and see what the average price is for the SKU or UPC). Be careful though! Sometimes online competition is dropshipping. They’re selling items they don’t physically have to the end user and collecting a tiny 2% markup. That shouldn’t be the end-all be-all of your pricing strategy.
3. If You Charge by the Hour
📍 Clockify Hourly Rate Calculator
https://clockify.me/hourly-rate-calculator
Here’s the formula:
(Desired annual income + expenses) ÷ billable hours = your real hourly rate
Most people drastically underestimate this. I found this a really fun and eye opening tool to use. I was really underestimating myself here, and if I want to charge more? Then I have to sit down and figure out what more I can offer to get to that price.
If You’re On the Fence… Ask Yourself This
Am I busy… but still stressed about money?
Do I feel resentful of certain jobs or clients?
Am I saying yes to everything just to keep cash flow moving?
If the answer is yes… It might not be a marketing problem. It might be a pricing problem.
Final Thought
Please remember that you are not the only one struggling with this. Even premium brands do constant pricing analysis - they have dedicated teams to do this daily! And you don’t need to double your prices overnight. But you do need to start asking the question:
“What would it look like to charge what this is actually worth?”
Because chances are… You’re closer than you think.
I’m here for you, rooting for you and your small business dreams 🙌🏻
