How to Price Your Work and Stop Undercharging

Ploy finishes a logo and website for a café owner. The owner loves it and asks, "So what do I owe you?" Ploy has thought about the number for a week. Her mouth says something lower, with a laugh, "Whatever you think is fair." She spends the next month feeling cheated and a little angry at someone who did nothing wrong.

Undercharging rarely comes from a lack of skill. It comes from saying a price in public for the first time and flinching. The number that comes out is the number that feels safe, not the number the work earns.

I think this is a power problem, not a maths problem. The person who names the price first, calmly, sets the frame for everything after. This guide is for freelancers, side hustlers and anyone who sells their own time or work, women and men alike. It does not teach tricks on the buyer. It teaches you to stop giving your work away.

The short answer

1. Know your floor first. What you must earn, and what you will walk away from.
2. Price the result, not the hours. What does the buyer get, and what is that worth to them?
3. Look at the market, then place yourself on purpose. Do not drift to the average.
4. Say the number once, calmly, and stop talking.
5. When they push back, fix the value before you touch the price.

DiagramFrom your floor to your price

Step 1: Know your floor first

Before you talk to anyone, write down the lowest deal you would still accept, and what you would do if the client said no. This is Know Your End First applied to money. Fisher and Ury make the same point in Getting to Yes with the idea of a best alternative: your power in a deal is what you can do if they walk away. Our guide to BATNA shows how to build one.

A freelancer without a floor negotiates against herself. Every pause in the conversation feels like a threat, so she fills it with a discount. A freelancer who knows her floor can sit through the pause.

Do the plain sums. What do you need per month? How many paid days or projects does that really mean, after unpaid admin, chasing invoices and gaps between jobs? Do not invent a number here. Use your own bank statement.

Step 2: Price the result, not the hours

Alex Hormozi, in $100M Offers, argues that most owners should raise their price, not cut it. A buyer says yes when the value they get feels bigger than the price they pay. You can widen that gap by adding value, and a high price can also make the buyer take the work more seriously. He quotes Dan Kennedy: there is no strategic benefit to being the second cheapest.

His Value Equation helps here. Value goes up with the result the buyer wants and their belief it will work. It goes down with the wait and the effort asked of them. So for any job, ask four questions: what outcome do they want, why would they believe you can deliver it, how fast, and how little work will it cost them?

A caution, because the book deserves one. Hormozi's proof is mostly his own record and a survey of his own clients. His method is logical. How much of his results came from method and how much from luck and timing, the book cannot show. Take the principle (price follows value) and test it on your own work.

Step 3: Place yourself on the market on purpose

Most people set their price by looking at rivals, taking the average, and going slightly under. Hormozi calls this pricing for market efficiency: everyone matches everyone, and profit shrinks. He claims those rivals are barely surviving. That is his assertion, not a measured fact, but the logic holds. A price based on copying cannot be defended, because you have no reason of your own for it.

Choose your position. Look at the cheap end, the middle and the top in your field. Ask what the top price-setters give that the middle does not: speed, certainty, a narrower specialism, less hassle for the client. Then decide whether you can honestly offer some of that.

Grant Cardone, in Sell or Be Sold, tells a story about price that fits. A salesperson said ticket sales would double at a lower price, so Cardone tested it with a seminar priced at one-tenth of normal. Attendance was the lowest of his twenty years. People told him they had assumed he would not appear in person. He then doubled the original price, and he says attendance at later seminars rose by more than 100 percent. It is one man's story, told by the seller, so it proves nothing general. It shows a pattern worth watching in your own market: a very low price can signal low value.

Your callWhat would you do?

You are a freelance photographer. A new client asks for a quote and mentions, "We have a small budget." You know your usual rate gives a fair return, and you have two other jobs lined up.

1. Drop the price by a third straight away to win them.

   Weaker move. Lever 2 is missing. You have given up your floor before they asked. The client now learns your first price was soft.

2. Quote your normal rate, then offer a smaller package at a lower total with fewer deliverables.

   Strongest move. Lever 2 and Lever 8. You keep your rate and your options. The client picks the scope that fits their budget.

3. Refuse to talk unless they accept your full price.

   Weaker move. Lever 5 is missing. Strength without warmth reads as rigid. Offering a smaller package costs you nothing.

Step 4: Say the number once, then stop talking

How you say the price matters as much as the number. A price said with a laugh, an apology or a long explanation tells the buyer you do not believe it. Say it in one calm sentence, then stay quiet. Do not fill the silence. This is Calm Is Power: the person who can sit through a pause usually wins the next move.

Practise the sentence out loud until it sounds boring. "The fee for this project is X, and it includes Y." No "just", no "only", no "I know it is a lot". Words like those invite a counter-offer.

Step 5: When they say it is too expensive, fix the value, not the price

Cardone calls this the price myth: price is rarely the real reason people hold back. Often "too expensive" means "too expensive for the value I see", or "I am not sure this is the right choice." In his view the real worry sits behind the word. His practical advice is to test it. Instead of dropping the number, ask whether they would look at something with more value.

For a freelancer, this becomes a calm question: "What are you comparing it to?" or "What would make it feel worth that?" Listen to the answer. It may be a fear of wasting money, a doubt about your results, or a plain budget limit. Each answer has a different fix.

Cardone's view has a limit, and he admits budgets are real in some cases. Some clients have strict, immovable budgets. For them, cut the scope, not the rate. Fewer pages, one round of edits, a shorter timeline. The unit price stays whole and the deal still works.

Your callWhat would you do?

You quote a client for a website build. She writes back, "That is more than I expected. Can you do it for less?" You like her and want the job.

1. Say yes and cut your price to what she wants.

   Weaker move. Lever 2 is gone. You told her the first number was never firm, so she will ask again on every future job.

2. Ask what she expected and what she is comparing it to. Then offer a reduced scope at a lower total, or keep the scope and hold the price.

   Strongest move. Lever 5 and Lever 2. You are warm and curious, and you are not trading your rate for approval.

3. Tell her she is not your kind of client and end the call.

   Weaker move. Lever 5 is missing and Lever 1 slips. You may be right, but you gave up a chance to learn what was behind the question.

The dark version

Drill

A fair price is part of your reputation

For the wider toolkit, read the negotiation guide and our review of You Can Negotiate Anything. When you need to turn a request down without losing goodwill, see how to say no without losing respect.

Questions people ask

01How do I decide what to charge for freelance work?

Start from the result the client gets, not your hours. Write what the work is worth to them, then look at what rivals charge, and set your price where you can say it without apology. Hours are a floor for your costs, not the price.

02What do I say when a client says my price is too high?

Do not cut the number at once. Ask what they are comparing it to and what would make it feel worth it. Often the worry is about trust or fit, not money. If it really is budget, trim the scope and keep the rate.

03Will a higher price scare clients away?

Some, yes. Those clients were buying on price, and they leave the moment someone cheaper appears. A higher price also tends to bring clients who take the work seriously. It only works if you can show real results.

04Should I lower my price to get my first clients?

A small, labelled first-client rate with a clear end date is fine. A permanently low price is a trap: it sets the value people attach to you, and raising it later is harder than starting honest.

Sources: $100M Offers; Sell or Be Sold. Ideas summarised in our own words.