Underpricing is one of the most common mistakes in a solo business. It creates overwork, resentment and no room to invest in better tools or time off. A clear pricing model fixes that. Pricing is a business decision, not just a maths problem, so choose a model that rewards results and protects your time.

The short version: work out the minimum you need to charge, choose a model (hourly, fixed project or retainer) that fits the work, price on the value of the result, and review your prices at least once a year.

Three common pricing models

  • Hourly. Simple to explain, but it caps your income and rewards slowness. It suits short or unpredictable tasks, or work where scope is unclear.
  • Fixed project fee. Priced on the outcome. It rewards efficiency and gives clients certainty. Define the scope carefully so extra requests are handled as separate work.
  • Retainer. A monthly fee for ongoing access or set deliverables. It creates predictable income and stronger relationships, and it works well for ongoing support, content and advice.

Many solo businesses mix them, for example a fixed fee for the project, then a retainer for ongoing support.

Find your floor

Your floor is the lowest price that keeps the business healthy. Work it out like this:

  1. Decide the annual income you want to take home.
  2. Add tax, superannuation or retirement savings if you set money aside, tools, insurance, equipment, training and a buffer.
  3. Add time off: holidays, sick days and public holidays.
  4. Estimate the hours you can realistically bill. Admin, sales and learning take time, so this is often well under 30 hours a week.
  5. Divide the total by the billable hours.

The result is your minimum hourly rate. It is a floor, not a target.

Price on value

Ask what the result is worth to the client. A project that saves or earns them a significant amount justifies a higher fee than the hours involved suggest. Customers rarely compare your price with your hours. They compare it with the problem it solves and with their other options.

To find the value:

  • Ask what a good outcome would be worth to them.
  • Ask what the problem is costing them now.
  • Ask what other options they are considering.

Offer options

Give clients two or three packages, such as a basic, standard and premium version. Clear options help people choose and often lead them to the middle or higher option. Describe what is included and what is not, and keep the differences easy to see.

Be clear about scope and terms

  • Write the scope in the proposal: deliverables, timeline, number of revisions and what counts as extra.
  • Ask for a deposit before starting, as part of your client onboarding system.
  • State payment terms, due dates and any late fees in writing.
  • Keep records of agreements and changes.

Raise your prices

Review your prices at least once a year. Signs you should raise them: you are booked solid, clients accept your quotes without question, or your costs have gone up. Tell existing clients early, give them a notice period, and explain what is changing. New clients can pay the new rate immediately.

Handle discount requests

Offer a smaller scope, not a lower price for the same work. Trade something for a discount, such as a longer commitment or upfront payment. Do not discount out of fear. It trains clients to ask every time.

Tax and GST

If you charge GST, show prices clearly as including or excluding GST. Registration thresholds and rules apply to Australian businesses, so confirm details with the ATO or an accountant. Our money system guide covers the basics.

Questions people ask

How do I know if my prices are too low?

If you are working long hours, feel resentful, never get pushback on price, or cannot afford to invest in the business, they are probably too low.

Should I put prices on my website?

It depends. Published prices filter out poor fits and save time. For custom work, "from" prices or example packages can help.

What if a client says my price is too high?

Check whether they understand the value. Offer a smaller scope or a different package if it fits, and be comfortable letting a poor-fit client go.

Is hourly pricing bad?

No. It is a good choice for uncertain scope. Many people move to fixed fees as they gain experience and confidence in estimating.