Cheap Or Affordable? What do You Want to be Called?

Cheap and affordable both means something that can be bought with less money. But there is a thin line in between.

Affordable means the thing is in the budget and can be purchased easily. However, cheap means the thing costs negligible and everybody can buy a lot of these. People sometimes refer cheap as substandard.

If you are just starting out and you do not have a portfolio to show to the clients, you need to keep the pricing of your services low. This price should not be too low that your clients think you compromise with the quality of the service. So, it is essential to know the right price for your services that is reasonable and maintains your dignity too.

SEO expert Montreal says that the toughest decision in life is to invest in a startup and the second toughest decision is to decide the prices for the first time. You do not want to overprice, you do not want to underprice. As such, businesses get stuck and take a wrong decision.

Here is what you have to do while deciding the price of your services.

Step #1. Decide the Number of Work Hours that the Project needs

All your services cannot have similar prices. Estimate how many hours a project needs to complete. Divide the project into small parts and write down the expected expenditure. Sum up the expenditure and write it on the spreadsheet.

Step #2. Decide the manpower that the project needs

The second step is to know the number of employees that you have to employ to the project to complete it in the hours calculated. This number should be such that the rest of the employees can manage other tasks too. It is not wise to appoint the same project to a majority of your employees.

Step #3. Set the base price of your services

You know the number of hours and you know the number of employees needed, the next step is to calculate the base price. Calculate the hourly salary of each employee. Add them to get the per hour salary of the employees on a project. Now multiply the result by the number of hours. This is what you have to invest to get the work done.

Step #4. Add the overhead cost and profit

After you get the base price, add your profit margin to it. Also, it may be possible that your one employee fell ill and the work gets delayed by one day. It may also be possible that the review of the project takes 4 hours extra than usual. Add the costs of these extra hours or any unexpected situations to your pricing. Generally, it is advised that the overhead price should be 25% to 50% of the base price. Now after all the calculation, you have the price that you want to put before the clients. 

Step #5. Be confident about your pricing and do not involve in bargaining

Now that you know the price, communicate it to your clients clearly. Do not  give it a second thought because you calculated everything and numbers don’t lie. Clearly mention the price and do not engage in the bargaining. The person bargaining does not understand about the quality of the services that he is getting. It is better to let him go.

Step #6. Re-evaluate the price and decide future prices accordingly

The calculations were based on the expected hours to invest but as you keep working, you will have better records and data to re-evaluate the pricing. Adjust the number of hours, overhead prices etc. to find out the actual right pricing of your services. Track, monitor, adapt and adjust your future pricing. Toronto SEO Company suggests using Harvest tool for calculation of the time invested in a project.
The affordability depends on the budget of the clients but you certainly do not want to be cheap. Do not compromise with the price to get more clients. Be confident about what you charge and do not step back from it.

If you have any suggestions about being affordable but not cheap, please comment below and help the startups.

Author Bio

Jacob Janson is the Research Manager with 10seos,10seos is one of the finest rating and reviewing segments. Jacob heads the SEO and PPC research at 10seos. You can follow 10seos at @10seos