You have a number of options when it comes to deciding on your approach to pricing. Some operators simply call around, find out what other companies are charging and set their prices in that range. Others decide what they want to earn and set their prices based on that without regard to how it relates to the competition. Then there's the issue of pricing by the project, the page or the hour.
The best approach is a multifaceted one that considers the skill level of the work, your profit goals and the market. You need to set up a system that gives you a structure to work within so you can quote consistent, reasonable and fair rates.
Multiple Hourly Rates
If you're going to charge by the hour, consider that different rates should apply depending on the complexity of the service and skill level required. For example, Cindy P.'s hourly rate ranges from $28 for straight word processing up to $40 for complex desktop publishing. The Association of Business Support Services International suggests a structure similar to the following:
- Level 1 (lowest hourly rate): Basic word processing, routine clerical services, simple proofreading
- Level 2: Enhanced word processing, copyediting, proofreading, basic spreadsheet design, internet research
- Level 3: Desktop publishing, spreadsheet design, simple web page design, simple web page maintenance
- Level 4: Graphic design, writing (academic, business, resume, technical), web page design, web page maintenance
- Level 5 (highest hourly rate): Consulting, training
Note that the same basic task might fall into more than one pricing level, and you'll need to make a judgment call based on the particular project as to which rate to apply.
When the Association of Business Support Services International surveyed its members, it found that the hourly rate ranges for the most popular services offered by respondents were:
- Basic word processing - $7-40
- Enhanced word processing - $7-50
- Copyediting - $7-75
- Database entry - $18-50
- Transcription, general - $15-45
- Consulting/training - $7-90
- Spreadsheet design - $15-75
- Desktop publishing - $7-75
- Graphic design - $14-100
- Web site design - $20-150
- Internet research - $7-75
Estimating the Job
Many new business owners find estimating one of the most challenging things they do, but if you approach the process systematically, it's simple. You just need to determine an appropriate hourly rate, calculate the length of time the project should take, and do the math.
Regardless of the format you use to provide the quote (in writing or verbal), it's a good idea to make notes for yourself so you know what you quoted and how you arrived at that figure. This will be necessary if the actual project turns out to be different than what the client described, or if the client questions the invoice later, even though they agreed to the quote. You may even want to create an estimate form that you can provide to the client and keep a copy in your own files.