If you are in business for yourself, you know first hand the inner struggle that can result when you initially set or change your fee structure. Charging what you think your product or service is worth is a personal decision.

If you are starting your business or giving your business a face-lift, you might be struggling with questions like, What should I charge? and How much will clients pay?

One research study showed that entrepreneurs who initially set their fees on the high side were more successful than those who set lower fees. By setting fees on the high side to begin with, you set the intention of being serious about your business and give it a firmer foundation. It’s also much easier to discount your fees on a case-by-case basis, should you desire to do so, rather than raise your fees.

Here are some things to consider when setting or re-evaluating your fee structure.

One: How much do you need to make a living?

Calculate the amount of money your business needs to generate annually to cover your business and personal expenses. Calculate the amount of money it takes to live on every month (savings required for short and long term goals as well as those periodic expenses.) Periodic expenses equate to non-reoccurring monthly expenses. Examples of periodic expenses are: car registration and maintenance, insurance premiums, health care deductibles, vacations, holiday spending, home projects, sports camps, seasonal clothing, property taxes and a new computer.

Let’s say you determine you need $100,000 annually. Then ask yourself how much you need to charge, per billable hour, to generate $100,000 annually. Consider there are 2,080 work hours in a year, based on a 40-hour workweek. Consider how much vacation time you want to give yourself. Let’s say you give yourself 4 weeks of vacation time equating to 320 hours. Deduct another 40 hours for personal or sick time. Deduct about 30 percent of time for marketing and administrative time. This leaves you around 1,000 billable hours in a year. This information tells you to reach your income goal you need to charge $100 per hour.

Two: Set your fees with a belief in yourself, your services and products.

Focus on what qualities you bring to your clients and business rather than focusing on what you lack. If what you lack keeps needling at you, take action and resolve the lack. Begin where you are. You are enough!

Don’t allow perfectionism to interfere with your fee structure. When I first started my business, over 7 years ago, I remember saying to my business coach, I need to get my Ph.D. before I can charge those rates. She said back to me, Denise, the issue here is that you don’t feel you are enough already. She was correct. I took her wisdom to heart and set a fee structure that supported me.

Three: What is the going rate for your service or product?

Know your market value. It’s important to know what others are paying for the services or products your business offers. Adjust your rates accordingly. Evaluate the market yearly. Under earners usually tend to keep their rates at the low end of the range and fail to give themselves a raise every year.

Four: Set your fees from a place of prosperity.

Let go of assumptions about what your clients will or will not pay. Don’t blame your clients for not taking action to raise your rates. Many of my entrepreneur clients tell me, My clients can’t afford that fee. The truth is you don’t know what your clients can or cannot afford. You have no idea what your clients spend their money on. This thinking is merely your projection onto your client. It’s really you saying, I don’t feel my product/services are worth that amount. I don’t think clients will pay for what I have to offer. Sometimes we are afraid to ASK for what we want and need.

The truth is if you value your fee structure your clients will too.

Five: Make a decent profit on your product sales.

When setting your fee, if you are selling a product, take into consideration the cost of materials, your time spent, and labor, mailing and shipping costs. Most sources suggest to charge enough to create a minimum of a 50% profit margin.

Six: Meditate on your fee structure.

Ask the question… What fee structure would support my highest good? See what answer you receive and compare it with the number you calculate telling you how much you need to make a living.