WHAT TO CHARGE FRIENDS for my SERVICES?
The Friendly Discount
I’ve recently had a friend that wanted to know what to charge friends. The first thing to note here is “Friend.” Be careful when discounting things for friends. They need to respect that you’re making a living off of your business and need to pay bills just like the rest of the world. If you do decide to give your friend a discount, make sure they know it’s a discount. On your quote, make sure you put the original price and reflect the one time discount.
It can feel weird working with friends because you’re used to hanging and chilling. The working relationship can become lax and unforgiving. “What to charge friends” can feel touchy. But don’t let it. Do everything you would with a stranger and ask your friend in turn for the discount to write a raving review and spread the word if they love the product they received.
What to charge friends for a Logo – or any service.
When you’re just getting started, you may not have a workflow or the confidence to value yourself and the product you’re providing. But believe me, you should. Your service is special. And if you’re going to make it in this harsh world of business, you need to translate that in the early beginning.
In business terms, this is your UVP – Unique Value Proposition. Figure out a way to make your service the only one of its kind on the market. Are you the fastest? The most creative? Do you cater to a particular audience – Neurosurgeon? Typically when you’re doing this you can go 2 ways.
Expert of a specific niche skill for everyone and how it’s done.
Heart Pro Hospital provides Holistic Heart Transplants with trained Ph.D. Cardiologist.
Provide an all and one for a specific audience and how it’s done.
Start Right provides everything Startups need to start their online business extremely fast.
Nobody can tell the Start Right story better than my customers. Send your friends $10 in Start Right credit and earn 5% of everything they purchase. Forever. - Learn more!
See how that’s done?
Now back to how to what to charge friends. So the first thing you want to do is figure out your hourly rate. How much does your business need to make to survive? Without going into too much detail, most freelancers charge anywhere from $50 – $150/hr. So just use that as a base for now.
After that, it’s pretty easy. How many hours does it take you to create a Logo? 6, 10, 20?
- 6hrs * $50/hr = $300
- 10hrs * $50/hr = $500
- 20hrs * $50/hr = $1000
Now look at what the competition is charging:
This may vary, but let’s say the competition is charging $600 or $100.
Next, get an average of what most are charging. I personally charge $599 for Logos.
Figure out the amount hours it will take you, add a couple more just for buffer and make sure your number isn’t too high over the market average – and if it is, have a strong reason to justify it. ( I get it done 3 times as fast as any other competitor out there.)
The same pricing goes for the 30-second Video Intro.
The worst part is shooting yourself in the foot and not charging enough where you feel like you’re being taken advantage of.
But I Have Physical Goods
Service providers don’t have to deal so much with this when their deliverables are intangible, but if your deliverables are physical, you need to keep an eye on your Costs of Goods.
If you make necklaces, what should you charge??
That all depends on how much it costs for the materials, the labor, and how much markup you want to add on without seeming overpriced.
I won’t go into buying in bulk, but this is the way to cut your COGs down significantly. Let’s just say you’re able to get your goods for the following price:
100 Mixed Beads – $1
1 Thread – $0.02
1 Feature piece – $0.50
COGs = $1.52
Labor ($50/hr) = 1hr to make 10 of the same kind
Labor Cost $50/10 = $5
Packaging (for simplicity sake) = $1
TOTAL COGs + Labor = $7.52
So do you sell it for that price?
I’d say no.
Go for at least 1 keystone. In this case, I’d say go for 2 keystones if you can.
1 keystone = $15.04 or $15.99
2 keystones = $22.56 or $22.99
Consequently, every necklace you sale, you make double or triple it took to make them. Now that’s good profit. Huge businesses (especially fast food) make roughly 7 to 10 keystones on everything they sell.
Be more Confident
In conclusion, I hope this will help you make firmer more confident decisions on your pricing strategy and help you stay firm when you do negotiate your rates. When you have real numbers behind that flat rate, you won’t have to fumble when you lay down your price.
If you need a Logo or anything business related, you know Start Right’s on your side. email@example.com