Setting the right price is crucial for the self-employed—it affects not only profit but also how the value of your work is perceived. Pricing isn’t just a number; it’s a strategy that reflects your expertise, costs, and customer expectations. How do you strike a balance between competitiveness and fair compensation for your effort? Let’s look at how to price services and products so your business can thrive.

What does pricing involve for the self-employed?

Setting the right price is essential for the self-employed because it directly impacts sustainability and long-term success. The price should reflect not only time and effort, but also the knowledge, experience, and value delivered to the customer. Many people hesitate to set higher prices, but undervaluing your work can lead to exhaustion and low motivation—and over time, burnout.

When pricing, it’s important to consider several factors, such as costs, competition, market demand, and the uniqueness of the service or product offered. The self-employed don’t have a stable salary like employees, so the price must also cover unpaid time spent on administration, education, and acquiring new clients.

Pricing: services and everything that comes with them

Setting the right price for a service is crucial not only for the self-employed but also for clients who expect appropriate quality. The price should reflect not only the time spent working but also experience, expertise, and the costs associated with running the business. When defining a pricing strategy, it’s important to factor in demand, competition, and how the work is valued.

Hourly rate vs. project price

Pricing depends on the type of service and how it’s delivered.

• Hourly rate – suitable for flexible projects where the scope can’t be precisely estimated in advance.
• Project price – a predetermined amount for a complete service that factors in not only time but also added value.

Competition, demand, and professional specialization

The price of a service is influenced by the market and the entrepreneur’s individual factors.

• Competition – comparing yourself with other professionals helps find the right price level.
• Demand – the more unique or sought-after the service, the higher the price can be.
• Specialization – a narrowly focused expert can offer higher value than a generalist.

BONUS: Top 4 services that changed the world

Some services emerged as answers to the needs of their time, but their impact was much greater—they changed how people travel, communicate, or shop. Thanks to their innovation, they became a model for future generations of entrepreneurs.

• Postal system – an organized delivery service that enabled faster and more reliable long-distance communication.
• The first travel agency (Thomas Cook) – allowed ordinary people to explore the world thanks to organized trips and laid the foundations of the modern tourism industry.
• Public libraries – free access to literature and education for the general public changed society and laid the groundwork for the modern education system.
• Supermarkets (the first self-service stores) – a revolutionary shopping model that made product selection easier and sped up purchases, leading to mass adoption worldwide.

Pricing: products and everything that goes with them

Pricing a product is more complex than pricing a service because it includes not only production costs but also a sales strategy and how customers perceive its value. The price should cover not only direct expenses but also hidden costs such as development, marketing, and distribution. Each product should be priced for long-term sustainability and competitiveness.

Costs, margin, and perceived value

Successful pricing combines rational calculation with the customer’s emotional perception. It’s not enough to add up costs and tack on a margin—you also need to consider the value the customer sees in the product.

• Production costs – include materials, labor, packaging, and logistics. If production is resource- or time-intensive, it must be reflected in the price.
• Margin – the amount the entrepreneur adds to costs as profit. It must be set to remain competitive while ensuring business sustainability.
• Perceived value – customers are willing to pay more for a product they perceive as premium or unique. Design, brand, and product story can significantly influence the price.

The advantages of scalability over services

Unlike services, where the number of jobs is limited by the entrepreneur’s time, products have the potential to grow without being directly tied to time capacity. A well-structured pricing strategy can maximize profit and reach a wider market.

• Mass production – the more units produced, the lower the unit costs can be, enabling better pricing.
• Passive income – digital products, books, or online courses can generate profit without constant bespoke work.
• Price differentiation – entrepreneurs can offer different product variants at various price tiers to reach a broader customer base.

BONUS: Top 5 products that changed the world

Some products were not just successful—they transformed entire markets and often the everyday lives of millions.

• The light bulb – revolutionized lighting in homes and public spaces, enabling people to work and live after dark.
• Walkman (Sony) – a portable cassette player that changed how people listened to music and laid the groundwork for today’s mobile audio technologies.
• Polaroid camera – enabled instant photo development, which was groundbreaking in photography.
• LEGO sets – a simple yet brilliant concept of modular bricks that sparked the creativity of millions of children and adults worldwide.
• Swiss Army knife – a multifunctional tool that became synonymous with practicality and survival, still popular with hikers and professionals.

Moral aspects and the real value of self-employed work

When buying a service or product, we should consider not only its visible value but also the work behind it. We often don’t see the hours of learning, testing, and refining that the self-employed have invested in their business. A fair price reflects not only material costs but also the experience and time a professional must commit to perform at a high level.

As customers, we should ask ourselves whether we truly want to support quality and the sustainability of small entrepreneurs. Cheap work usually entails compromises—either in quality or in the standard of living of those who provide it. Respecting the value of services and products helps build a fairer market where those who put real effort into their work are rewarded.

• Quality has its price – professional results are backed by years of practice, education, and investment in tools and materials.
• Support honest entrepreneurs – a fair price enables the self-employed not only to cover costs but also to develop their skills and services.
• Cheap doesn’t mean good value – prices that are too low often lead to compromises in quality, sustainability, and fair working conditions.