How To Price Agency Services When You're Just Starting Out
Pricing comes up on almost every mentoring call I have. Everyone has some version of the same worry: “I’ve got no track record, so what on earth do I charge?”
Here’s the short answer. Work out what the job costs you in time, add a buffer, quote that number, and put your price up with every new client. You will get it wrong at first. That’s fine. Pricing is an experiment you keep running, and the early mistakes are cheap.
Start with a number you can defend to yourself
If you’ve never priced anything before, use a simple calculation:
Your hourly rate × the hours you think it will take + 25%.
The 25% is there because things always take longer than you expect. An audit that looks like six to eight hours on paper is rarely six to eight hours.
That gives you a baseline. If the number feels right and the client says yes, great. You’re being paid what you believe your time is worth, which is a good place to start.
Know what the work costs you before you quote
If you run campaigns or any service with real costs behind it, build an internal rate card first. This one is just for you. Nobody else sees it.
Work out what it costs you to deliver the thing: your time, tools, data, anyone you pay to help. That’s your cost of goods sold. Once you know it, you can get creative with pricing on top.
Early on, the rule is simple: always cover your costs. A structure that works well is a monthly amount you reliably receive, with extra work priced on top depending on how hard it is and how much of it there is.
You’re allowed to make those internal numbers up to begin with. You can change them later, and you will.
Your first clients are buying without proof
A price that needs justifying gets a “let me think about it”. When you’ve got no case studies, you can’t justify much.
So you may need to start lower to land the first few clients. There’s no shame in that. Treat the early work as an investment in a case study, do an amazing job and get the result.
Then raise your price for the next client. And the one after that. Don’t beat yourself up about what you charged the first one.
One thing I’d avoid is dropping all the way to zero. Free work creates a different problem.
Where your clients are changes what they’ll pay
This surprises people. The same service at the same price lands differently depending on the market.
In my experience North American companies are more willing to spend quickly to make a problem go away. European companies still spend, but they’re more cautious and slower to commit.
If you want to charge a premium early, it’s easier to do with North American clients.
Let the market tell you when you’re wrong
Some engagements you’ll price too low. Some you’ll price too high. The goal is to keep nudging towards the right number.
If several proposals in a row come back as too expensive, take the hint. Drop the price a little, and drop the scope with it. Then build back up on the next one.
It works the other way too. I once quoted a number that felt extortionate to me, and the client’s reply was “yes, we just need to work out when to start”. If nobody ever pushes back on your price, it’s probably too low.
What to do next
- Work out your baseline: hourly rate × hours + 25%.
- Write down what delivery really costs you.
- Quote your next prospect a little more than the last one.
- Keep a note of every “yes”, “no” and “too expensive”, and adjust.
If you’d like a second opinion on your pricing, that’s exactly the kind of thing we work through in monthly mentoring.
Frequently asked questions
- How do I price my services with no track record?
- Multiply your hourly rate by the hours you expect the work to take, then add a 25% buffer because it always takes longer. Use that as your baseline and raise it for each new client.
- Should I charge less for my first few clients?
- You may need to. Your first clients are buying without proof, so a lower price to land them is fine. Do great work, turn it into a case study and charge the next client more.
- How do I know if my price is too high?
- Listen to the market. One 'too expensive' is noise. Several proposals in a row coming back as too expensive is a signal to drop the price and the scope together, then build back up.
- Does it matter which country my clients are in?
- Yes. In my experience North American buyers commit to higher prices faster. European buyers still spend, but they are more cautious and take longer to decide.