Are you pricing your online services right?

Many entrepreneurs say that one of their biggest early mistakes when launching their business was pricing their offering too low. When you’re starting out, it can be tempting to try and draw new customers in with low prices. But, this can be a deadly mistake, meaning you never earn enough to get yourself off the ground.

But when you’re selling an intangible service, it’s often very difficult to work out how much it should cost. There’s no secret formula here, but the following tips can help you make a good estimate.

Work Out Your Hourly Rate

Your hourly rate can be an effective way of charging for services. To estimate your hourly rate, you need to decide what you want the business to turn over each year.

If your target is $100,000, you need to account for all your business expenses, including salaries, overheads and tax. Then, decide how many hours you will work each week, and minus any holiday.

This calculation should help you work out roughly what your hourly rate will be. Try not to be overly optimistic here, and remember that as a solopreneur you will often spend at least a few hours every week on non-productive work, like invoicing and accounts.

Fixed Price

Charging a fixed price for your service has positives and negatives. If you end up taking longer than expected to do the work, you might be short-changed. On the other hand, as you get more experience, you will be able to complete the job a lot faster, making the business more profitable.

Competitor Prices

You shouldn’t focus too much on your competitors’ pricing (after all, you want customers to see you as unique, not low cost), but it’s worth keeping in mind roughly what others in your space charge for similar services. If, for instance, your competitors all raise their prices, you could be doing yourself a disservice by staying cheap.

Perceived Value

In the end, people will pay what they feel is a fair price. You therefore need to do some market research to get an idea of what people are really willing to pay for your kind of service and what the market can take on.

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Len is a tech and business writer who covers small business and startup advice and has appeared in many print and digital publications. He lives in London, UK, where he's also a sub editor on a national newspaper. He loves to travel and has lived in France, Spain, Senegal and Rwanda.

Get Customers Visiting Your Page and Booking You

So, you’ve got a great new idea that you want to sell as a service? Awesome! However, before you throw yourself into marketing the product and trying to drum up business, you need to make sure there’s actually demand for the service. And this is why market research is so important.

Market research will help you discover if you have a unique proposition, whether your customers will be willing to buy it and whether you are different enough from the competition. Small business owners often think that market research is only something for big corporations. However, there are plenty of simple ways you can do market research which can give you some quick answers.

Types of market research

There are two principal types of market research:
Primary: this is where you get the data directly from the source yourself. Think surveys, focus groups, interviews
Secondary: this is where you access data produced by others. Think official statistics, information found in libraries, data from small business associations

Let’s look at each of these in turn.

1. Primary Research

Primary research is one of the best ways small businesses can find out what their customers want. At this stage in your service’s life, you really want to narrow down your questions to find out:
• Does your target customer already pay for a similar service, or have they ever done so before?
• Would they pay for a service like yours?
• Do they understand the value of your service/do they need it?

You then need to find people to answer these questions. There are tons of free or cheap online survey tools like Survey Monkey, where you can design your survey and then promote it via email, on social media or via online ads.

2. Secondary Research

For most small businesses, you will be able to access large amounts of the information online. By trying out a few search terms on Google or Bing, you will rapidly come across a lot of reports and statistics. Be aware, of course, that many of the companies providing such ‘research’ likely have their own agenda to sell their readers a product or service. So, take these with a pinch of salt.

For more dependable market research, sites like Market Research can offer huge amounts of (paid) information on almost any market, anywhere in the world. There will also be a lot of free research made available by state, local and national governments in most countries (see here for the USA), although finding out the kind of specific information you want will take some digging.

Finally, it’s worth joining an association for your sector. Most associations charge low entry rates and they can provide you with a lot of resources about your customers and your competitors, among other things.

Learn more about launching your online service here.

10 ways to use LinkedIn to find work for your business

When it comes to finding work for your small business, LinkedIn is one of the best hunting grounds out there. And, employers are increasingly turning to LinkedIn too – since 2015 there’s been a 40% increase in recruiters using InMail to contact potential candidates. The platform is hugely popular among contractors, freelancers and small business owners as a way of finding work. So, if you just think of your LinkedIn profile as an online CV, you’re probably missing out on some huge opportunities to grow your business. Let’s look at 10 methods to use LinkedIn to find work for your business.

10 ways to find freelance and contracting work on LinkedIn

There are two ways of winning freelance or contracting work through LinkedIn:

  • Active: this is where you put yourself out there, make connections and hunt for job listings
  • Passive: this is where you optimize your profile to make it more likely that recruiters or other job posters find you10 ways to find freelance and contracting work on LinkedIn

In effect there’s a lot of crossover between active and passive freelance work hunting; by being active in the right LinkedIn groups, it makes it more likely that a recruiter comes across your profile later on while you’re not actually doing anything to find work.

So, here are 10 ways freelancers and contractors can use LinkedIn to find work:

1. Make a good first impression

Your LinkedIn profile can say a lot about you to potential recruiters. Make sure the first things they see appear professional and smart. Your profile photo should be up to date and smart, you should have a relevant background image and you should use your real name (as opposed to a nickname or your company name). If you haven’t already, you should also aim to complete your entire profile – LinkedIn makes this easy for you by giving you pointers as to where you need to add more detail as you’re editing your page.

2. Headline and summary

Just like any search engine, LinkedIn uses keywords. So, whenever someone searches for, say, a freelance web designer on LinkedIn, those profiles that contain that keyword will come top of the search. Make sure your headline and LinkedIn summary include keywords related to what you do. This makes it way more likely that recruiters will find your profile and get in touch about jobs.

3. Ask for endorsements

Request that existing contacts provide endorsements for your skills and expertise, especially if these come from previous freelance or contracting employers. If you can get a positive review of your work on a project, this will give any potential recruiters that extra bit of confidence that you’re worth taking a chance on.

4. Use your profile as a portfolio

There are a number of ways you can use your profile as a portfolio. Most obviously, you should bunch small jobs and projects together in your experience section, detailing the kinds of work you do and the clients you work with. For larger projects you’ve completed, list these separately, perhaps with a link to information about the final piece. Finally, you should include links to your website and online portfolio in your LinkedIn summary section.

5. Post updates and articles

Put your name out there by posting updates, sharing articles and other links. LinkedIn allows you to publish your own thoughts on LinkedIn Pulse too, so a well written article about a subject you know a lot about can be read and shared by hundreds of people. And, LinkedIn Pulse posts appear in Google search results too. One of your readers may well be impressed by your knowledge and offer you some work.

6. Join groups

LinkedIn has countless groups related to different professions. Whether you’re an independent accountant, a freelance journalist or a management consultant, there’s almost certainly groups aimed at your niche. By joining these groups and asking and answering questions, you boost your profile in the community. And, if you’re active in LinkedIn groups, you boost your chance of winning work. Recruiters who join the group will see you as an expert and may get in touch. At the same time, friendships you make with other group members could lead to referral work in future.
Read more about the power of networking in this article.

7. Connect with potential employers

LinkedIn is a website designed specifically for facilitating business connections. So, don’t be shy about connecting with potential employers! If you’re a freelance web developer, and you’ve mainly worked with IT managers at public sector organizations in the past, there is no reason not to simply search LinkedIn for people with this kind of profile and requesting to follow them. Sure, not everyone will accept, but those that do might just pay off.

8. Send personalized InMails

To be able to send an InMail, you need to have a premium profile. However, for a few dollars per month, this could be a worthwhile investment if you do it right. Personalized InMails allow you to connect to anyone on LinkedIn and send them a message. However, for any success here, you need to make sure your message is personally directed at the person you’re trying to speak to – don’t just send a spammy message you’ve sent to a hundred other people, or your connections will just ignore you.
Read our guide on striking deals over email.

9. Connect with old employers

Old employers, managers and even colleagues who’ve changed jobs and risen in seniority are often a great source of work for freelancers and contractors. Add these people to your network and send them a message to let them know what you’re doing nowadays. They just might have some work you can help out with.

10. View ads!

One of the easiest ways to find freelance and contracting work on LinkedIn is to set up notifications for job ads which contain your keywords – be that freelance writer, graphic designer or IT consultant. LinkedIn can email you daily, weekly or monthly summaries of jobs in your sector – let LinkedIn do the hard work for you!