To price services consistently, estimate what delivery will cost before deciding the selling price. Include preparation, meetings, revisions and a fair share of overhead alongside visible expenses. A busy project can still leave too little to support the business when those parts of the work are missing from the estimate.
Before setting a price, build a clear estimate of what delivery requires. Then consider how the offer compares with alternatives and what customers value. The example below uses invented naira figures to explain the method; it is a planning exercise you can adapt to your own service.
Step 1 – Define the scope before the number
List what the customer receives, the expected delivery stages, included revisions and the information they must provide. Identify work that would require an additional quote, such as extra locations or a new deliverable.
A price for “content creation” is difficult to evaluate. A price for an agreed number of videos with defined lengths, production requirements and revision rounds gives both parties something specific to discuss. Scope is part of the price calculation because it determines the workload.
Step 2 – Add direct delivery costs
Estimate the expenses required for this project, such as transport, hired equipment, materials and external specialists. Use current quotations where possible. Record assumptions so you know what might change before the work begins.
For our example, direct delivery costs total ₦45,000. Keep reimbursable expenses and costs included in the quoted price clearly distinguished. Otherwise, the same item could be missed or counted twice.
Step 3 – Include your working time
Estimate all project hours, including preparation, communication, delivery and review. In the example, the work requires 20 hours at an internal planning rate of ₦2,500 per hour, producing a labour estimate of ₦50,000.
Your internal rate should reflect a realistic number of billable hours. Every hour in the month will not be available for client work; administration, sales and learning also take time. Review the estimate against completed projects so future quotes reflect the work you actually do.
Step 4 – Allocate an appropriate share of overhead
Overhead includes ongoing expenses such as software, workspace and administration that support more than one project. Choose a consistent allocation method and avoid counting an expense again if it is already included in your labour rate.
Suppose this project’s overhead allocation is ₦15,000. The total planning cost is therefore ₦45,000 in direct expenses, ₦50,000 in labour and ₦15,000 in overhead: ₦110,000 altogether.
The US Small Business Administration’s business planning guidance explains how cost and break-even analysis can inform pricing. The practical point here is to understand the costs your selling price must support.
Step 5 – Check margin using the selling price
At a selling price of ₦150,000, the amount remaining after the example’s estimated costs is ₦40,000. Divide ₦40,000 by the selling price of ₦150,000 and multiply by 100 to get a planned project margin of approximately 26.7%.
Markup uses cost as its base. The same ₦40,000 divided by ₦110,000 gives a markup of approximately 36.4%. These percentages describe different calculations. Be clear which one you use when discussing a target with your team.
This planning margin depends on the estimate being complete. Include applicable taxes, transaction charges and other costs in the appropriate way for your business, and use actual records when assessing the final result.
Step 6 – Compare the price with the market and the value
Review comparable offers carefully. Differences in scope, quality, support and turnaround can explain differences in price. Ask customers what matters to them rather than assuming the cheapest offer will always win.
If the price customers will accept does not support delivery, revisit the package or operating method. You could reduce the scope, organise work more efficiently or serve a different customer need. A busy schedule alone does not establish that the service is commercially sound.
Step 7 – Review the project after delivery
Compare estimated and actual hours, direct expenses and revisions. Record why the differences occurred. Use that evidence to adjust the next quote and clarify future scopes.
Choose one recent job and reconstruct its real delivery cost. You may discover that the next pricing improvement is a clearer revision limit, a better brief or a more realistic time estimate. Understanding those details gives you a stronger basis for the number you present.
Use a scope check before you price services
Ask what would make the job take longer than expected. For a design project, this might be several approvers sending separate feedback. For filming, it could be an additional location or a delayed access arrangement. Record the assumption and explain how a material change will be discussed.
When you price services again after delivery, compare the estimate with the actual work. If the same task repeatedly takes twice as long, change the next estimate or improve the process. A useful pricing worksheet preserves the reasoning behind the figure so a team member can update it when costs or scope change.
Frequently asked questions
Should I price services by the hour or by the project
Either approach can work when the scope and economics are clear. An hourly approach reflects time used; a project price gives the customer a defined amount for an agreed scope. In both cases, estimate the workload, explain boundaries and review the actual delivery cost.
What is the difference between margin and markup
Margin expresses the amount remaining as a proportion of the selling price. Markup compares that amount with cost. Because their denominators differ, the same project produces different percentages. Label the calculation clearly before comparing it with a business target.
Should I match a cheaper competitor
First compare deliverables, quality, support, timing and exclusions. A lower price may cover a different scope. If the customer’s budget cannot support your proposed work, discuss a smaller suitable package or decline the fit instead of committing to work you cannot deliver sustainably.
Related guides
Read How to Create a Service Offer Customers Understand.
Read How to Run a Weekly Business Review in 30 Minutes.
Take the next step with Coded TV
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