Philip Morley, a custom woodworker in Austin, recently wrote a short, concise article in Fine Woodworking Magazine explaining how he prices his work using just three main points – based on three main mistakes.
Morley builds and designs his furniture by himself, manages his own website and social media (with 41,000 followers on Instagram), does his own billing, and works directly with clients. Literally, a one-man shop.
Everyone who works for themselves struggles with pricing, no matter their level of experience or number of employees. Replace with “furniture” with “photography” or “graphic design” or even “accounting” and it’s all the same. He writes:
“First, I have learned to be direct and open with clients.”
Morley says his style of high-touch communication results in clients being sympathetic about why his work has the monetary value he places on it. That sympathy leads directly to sales.
“Second, I have become much more careful with regard to pricing materials.”
Wood, saws, and drills (or computers, cameras, and internet): it’s all about fixed costs, and if you don’t get a handle on those items, the result may mean you will be working for someone else in the future, at which point fixed costs become your employer’s problem, and you’re collecting paychecks instead of producing invoices.
“Last, I no longer even try to calculate what I am making per hour.”
Hourly rates are how some some clients calculate what they believe is a fair price while entrepreneurs have to justify fees that accurately reflect their cost of doing business. See points One and Two.
It’s not a false analogy to say that Morley’s product – furniture – is similar to any entrepreneur’s product. Business is business, product is product, and the logic behind how an entrepreneur stays in business is just the same. The price is the price.
Read the article here: