Pricing your services without guilt starts with one thing: knowing your numbers. Not what your competitor charges, not what feels “safe,” not what you think a client will say yes to — your actual numbers. What it costs to run your business, what your time is really worth and what you need to earn to be genuinely profitable. When your pricing is built on that foundation, the guilt starts to dissolve on its own.
But let’s be real: I did not always charge what I was worth. When I first started out, I priced my services so low that after tracking my actual hours — including all the back-end work that nobody sees — I was making below minimum wage. Below minimum wage.
So if you’ve ever undercharged, overdelivered and then wondered why your bank account doesn’t reflect how hard you’re working, this post is for you.
The Pricing Journey Nobody Talks About Honestly
Here’s what the pricing journey actually looks like for most service providers, freelancers and solopreneurs … and I say this from personal experience and from working with 30+ small businesses:
Stage 1: Hourly pricing that forgets the back end. You charge for the work you do. The deliverable. The thing the client hired you for. You completely forget to account for the emails, the admin, the invoicing, the prep, the follow-up and every other hour that makes the work possible. Now, I’m not saying to include those tasks in your billable hours, but include it in your hourly rate.
Stage 2: Fixed pricing that feels “safe.” You switch to project-based pricing because hourly felt awkward. But the fixed rate is still too low because it was built on Stage 1 thinking — it only covers the visible work, not the full cost of delivering it.
Stage 3: Pricing that’s actually built on real numbers. This is where things change. This is where you track your actual time, add up your real costs, factor in your overhead and taxes and build a rate that reflects what it actually costs to run your business and pays you what you’re worth.
Most people spend years in Stages 1 and 2. The move to Stage 3 only happens when you start looking at the numbers honestly. And that’s exactly what bookkeeping is for.
“Am I Charging Enough?” — The Most Common Question I Hear
When clients come to me and the conversation turns to pricing, the first thing they almost always ask is: “Am I charging enough?”
And my answer is always the same: let’s look at your numbers and find out.
Because here’s the deal, pricing isn’t a feeling. It’s a math problem. And the math only works when you have accurate, current books to work from.
When we sit down and compare what a client is currently charging to what their budget actually requires them to earn, the answer is almost always illuminating. Sometimes they’re closer than they thought. And sometimes they’ve been leaving significant money on the table for years without realizing it.
Both outcomes are useful. Because what’s not measured isn’t managed. If you don’t know where your numbers currently are, you won’t know where you need to be. (But you can always change that here 😉)
Two Client Stories That Changed How I Think About Pricing
The Client Who Forgot to Charge for the Back End
I had a client — a service provider — who was charging hourly for her work. On paper, her rate seemed reasonable. In practice, she was constantly busy and constantly frustrated that her income didn’t feel commensurate with her effort.
Sound familiar?
We tracked her time for an entire project. Not just delivery hours. Every hour. The client calls, the prep work, the revisions, the invoicing, the admin. When we divided her project fee by her real total hours, her effective hourly rate was significantly lower than what she thought she was charging.
That one exercise changed everything. She restructured her pricing to reflect the full cost of her work — back-end hours included — and her financial picture shifted almost immediately.
This is exactly what I covered in my post on being profitable versus just being busy. Busy doesn’t mean profitable. And the only way to know the difference is to track the real numbers.
The Client Whose Margins Were Quietly Shrinking
This one is a little more sobering and it’s the kind of thing that only shows up when you look at your financials over time.
I had a client who hadn’t raised her prices in years. She felt like her business was holding steady — same clients, similar revenue, no obvious problems. But when we pulled her financials and looked at her gross margin year over year, a very clear pattern emerged.
Her costs had been increasing every year. Supplies, software, contractor rates, overhead — all of it had crept up. But her prices stayed flat. So every year, a little more of each dollar she earned was being eaten by expenses. Her gross margin was declining steadily and she had no idea because nobody had shown her the trend before.
This is one of the most powerful things clean, current books can do for a business owner: they show you patterns over time that you simply cannot see when you’re only looking at one month at a time.
If you’re not sure what your gross margin looks like or whether it’s been trending in the right direction, that’s exactly the kind of question your bookkeeper should be able to answer for you.
What’s Not Measured Isn’t Managed
I want to make this point as clearly as I can because it’s the thread that runs through every pricing conversation I have with clients.
Your books are not just a tax document. They are the most honest picture of whether your pricing is actually working.
If your revenue is growing but your profit margin is shrinking, your pricing has a problem.
If you’re fully booked but cash still feels tight, your pricing has a problem.
If you’re raising your rates but your take-home pay isn’t growing, your pricing — or your expenses — have a problem.
None of these things are obvious from your bank balance. They only become visible when you have accurate, current financial reports and someone who knows how to read them with you. Understanding what your financial reports are actually telling you is one of the most valuable skills a business owner can develop — and it starts with having books that are clean enough to trust.
My Honest Take on “Just Research Your Competitors”
The advice to “look at what competitors charge and price accordingly” is everywhere. And while market research is absolutely worth doing, I want to push back on treating it as the foundation of your pricing strategy.
Here’s why: what works for another business may not work for yours.
Another service provider might charge $X an hour, but they have lower overhead, a different client base, a different cost structure or years of existing relationships that justify that rate in their specific context. Matching their price without understanding your own numbers means you might be racing to the bottom — or accidentally leaving money on the table because you priced to someone else’s ceiling instead of your own.
Market research tells you what’s possible and what the market will bear. Your financial data tells you what you need. The sweet spot lives somewhere in between and you can only find it when you know both numbers.
How to Build Pricing That Actually Works
Here’s the framework I use with clients when we’re working through a pricing restructure:
Step 1: Know your real cost of doing business. Add up every expense required to run your business for a month — software, subscriptions, contractor costs, marketing, professional development, bookkeeping and everything else. This is your baseline. Your pricing has to cover it before you earn a single dollar of profit.
Step 2: Track your real hours. For your next project or client engagement, track every hour — not just delivery. Admin, communication, prep, invoicing, revisions, everything. Divide your fee by those hours. If that number is uncomfortable, that’s important information.
Step 3: Factor in taxes. Self-employment tax is 15.3% for sole proprietors and single-member LLCs. Add federal and state income tax on top of that. If taxes aren’t built into your pricing, you’re spending money that isn’t actually yours.
Step 4: Add your profit margin. Profit isn’t what’s left over after you pay yourself. Profit is what builds your business — your emergency fund, your growth investments, your future. Build it in intentionally.
Step 5: Sanity check against the market. Now that you know what you need to charge, check it against the market. Is it reasonable? Is there a client base willing to pay it? If yes, price with confidence. If there’s a gap, that’s a conversation about either adjusting your costs, finding a different market or raising the perceived value of your offering.
The Profit First method is a framework I use with a lot of clients that makes this kind of intentional financial structure feel a lot more concrete. If you haven’t read it, it’s worth your time.
Pricing Without Guilt
Here’s what I want you to take away from this post.
Guilt around pricing almost always comes from one of two places: not knowing your numbers or not believing your value. The first one is a bookkeeping problem. The second one is a mindset problem. And both of them are solvable.
When you know exactly what it costs to run your business, what your real hourly rate is and what you need to earn to be genuinely profitable — pricing stops feeling like a personality judgment and starts feeling like a business decision. And business decisions are a lot easier to make confidently than personal ones.
You did not start your business to work below minimum wage. So stop pricing like you did.
Ready to find out if your pricing is actually working? Book a free consultation call and let’s look at your numbers together. Or subscribe to Between The (Spread)Sheets for monthly financial tips that help you run your business with clarity and confidence — delivered on the first Wednesday of every month.
