Reverse Engineer Your Pricing for Profitability
How often does this happen?
You connect with a potential client.
The conversation is easy.
They’re aligned. You’re aligned.
You’ve gone out of your way, articulated your value, then you hear the dreaded words…
“This is more than I can afford.”
You immediately run through scenarios to reduce your price to work with this dreamy client.
But I want you to pause right there.
I want you to think about the time and care you’ve already put into your work. You’ve spent hours preparing, meeting, and walking a potential client through your process, only to have them feel caught off guard by your pricing. It stings even more when you’ve already sent a custom proposal.
Your price does communicate value.
But your demeanor, your confidence, and your process are what support it.
The moment you hesitate or leave room to adjust, that’s where doubt enters the conversation.
Pricing is a critical component of your business, and it can be a slippery slope if you’ve set yourself up for failure from the get-go
It influences everything. Your workload, your capacity, your team, and your ability to operate sustainably.
When pricing is too low, it shows up quickly.
Overcommitment. Burnout. Reduced margins. In some cases, covering costs out of your own pocket just to deliver the work. Or relying on new projects to support existing ones, which is not a system that holds.
So instead of reacting in the moment, start by breaking down what it actually costs to serve a client.
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1. Start with what it actually costs to serve a client
Before you decide what to charge, you need to know what each project requires.
Not in theory. In detail.
Look at every layer:
Cost of goods or materials
Contractor or team support
Software and systems
Payment processing fees
Travel and logistics
Client experience costs like gifts
Taxes
Most people skip this or estimate loosely.
That’s how you end up working on full projects and wondering where the money went.
If you’re not already tracking this, this is where a simple system matters.
Even something like Wave Accounting software or the YNAB budgeting app can give you visibility into what’s actually happening.
You don’t need complexity.
You need accuracy.
2. Then look at your time
Once you know your costs, layer in your time.
Estimate the full scope:
Client communication
Prep and planning
Execution
Revisions
Admin
Then calculate what you’re actually making per hour.
This is where most pricing falls apart.
Because on paper, it looks profitable.
In reality, it’s not.
3. Understand your baseline before you set your prices
Your pricing should support three things:
Your business baseline
What it costs to operate your business (with zero clients for the month)Your personal baseline
What you need each month to keep your home life in balance with a roof over your head, food on the table, and your bills paid.Your future goals
What you need to support your long-term dreams and stretch goals (Growth, savings, retirement, long-term stability, bucket list items or trips)
If your pricing doesn’t support all three, it will always feel tight.
4. Control what you can before you raise your prices
Before you adjust your rates, clean up what’s within your control.
Reduce unnecessary expenses
Simplify your tools
Evaluate subscriptions you don’t use
Tighten your workflows
This applies to your business and your personal life.
The cleaner your backend is, the more your pricing works.
5. Raise your prices when the business supports it
Price changes shouldn’t feel random.
They should reflect real shifts in your business:
Increased demand
Faster or more refined turnaround time
Higher operating costs
Expanded services
A growing team
Investing in systems behind the work
If those have changed, your pricing should too.
6. Build offers that support different entry points
Not every client will be the right fit for your full service.
That doesn’t mean lowering your standards.
It means structuring your offers intentionally.
When possible, offer multi-level services, or know how to break up your services into smaller pieces that can be profitable and successful for you, but also allow you to work with clients who have different budgets, with strong boundaries for yourself.
A smaller, focused service
A mid-level engagement
A full implementation
This allows you to work with different budgets without discounting your core work.
Sometimes, to grow, we need to curate, so don’t be afraid to remove what isn’t working or what you don’t love. More time away from projects that don’t bring you joy means more focus on the ones that light you up!
Pricing isn’t always a simple formula. Sometimes we realize that a portion of our services or products is profitable, while others aren’t! It’s okay if you’re just discovering this. Remember, your client today doesn’t need to know what you sent out yesterday. So, you’re always in a perfect position to adjust your pricing for the next project!
And at some point in the negotiation process, likely, you and a potential client won't be able to agree on a number due to resources and expectations, and that’s okay.
That’s not a failure.
It’s alignment.
You can refer them out or simply move on.
At the end of the day, you decide your pricing, not your client. Trust your numbers, know your value, and lean into the right changes for you and your business to generate positive and fulfilling results. Put in the work and changes today, so you can support your pricing with confidence at the next negotiation table!
If you’re not sure what your pricing actually needs to support, that’s usually where to start.
You can book a discovery call to walk through your current setup and see what’s working and what needs to change.