How to price a project when the number feels too high

One member brought two quotes to Friday’s call. One was $650, the other about $1,000, and they weren’t sure. “Isn’t this too much? But at the same time, it’s a lot of work.”

$2,000 is a lot of money. Personally.

If you’re thinking about a personal consumer expense, $1,500 or $2,000, that’s a lot of money. If your spouse or your partner walked in and said, “Hey, we just got a bill for two grand,” none of us would be happy about that.

We had to replace our hot water heater, and it was literally $2,000. It kind of ruined the week.

So yeah, $2,000 is a lot of money personally. Professionally, it’s relative. If you’re a new business and you get a $2,000 bill for something that isn’t returning you any value, then that’s still expensive, and it’s a bad deal.

But if you’re building something for a client, take away how much work it is. Whether you’re spending 80 hours on it or 8, or you do 0 hours and pay someone else to do it.

Forget about how much time it costs you or how many resources you need to make it happen. Think just about what it’s doing for the client. What is it unlocking for them?

What is it unlocking for them?

Let’s say you’re building a website. Key pages, a basic CMS so they can add articles, video and their podcast, and a booking system so people can book calls and they can close deals.

That can be built relatively quickly, whether you use a template, Claude Code or a past project. What takes an expert’s eyes and mind is how it works, what they need and the flow of it all.

If it’s $2,000 to just turn on a website, it seems expensive. So ask the client what they sell.

Say they do speaking engagements. They speak on stages and sell their book. You ask, “Is your website doing that right now?” And they say, “Well, no. It’s a really bad landing page I threw up on Wix 12 years ago. I’m getting deals from emails and phone calls, but it’s really messy, and I know I could be doing better.”

Then ask, “How much do you sell your speaking engagements for?” Say it’s $5,000 for the keynote, and a workshop at a smaller conference starts at $2,000. They do three a year. It’s not much, but they have capacity to do more.

So you build a website that shows what they do, with a highlight reel of them on stage. People can book them, buy the book, buy the workshop or the coaching that goes with it.

What would that be worth to them? It’s unlocking the ability to make revenue through their website. Maybe you help them sell 10% more speaking engagements. Maybe now they can actually start making money from their coaching, because someone can just buy it right off the website.

$2,000 for that is a no-brainer. In fact, you’re getting the bad end of the deal.

Being the cheap option can cost you the job

It works the other way too. The client might think, “$2,000 seems too cheap for you to unlock that much value for me. Do you really know what you’re doing? Have you never done this before?”

That’s where being the low price can actually harm you. And depending on the client, being the highest price is the more attractive option.

I once sat on a panel helping a municipality hire an agency to build all their digital infrastructure: the website, ways for citizens to pay their taxes, book the skating rink, see the garbage schedule. They had three or four agencies pitch, ranging from the low price to uber-premium, like Rolls-Royce.

They chose the highest-priced option. They could have saved tens of thousands with the cheap one. But they said, “They know what they’re doing. They do this all the time. They’re the experts, and we want the best.”

Another member said in the chat that they’ve won a bid because they bid more. They were told the higher price showed more confidence in the quality of their work.

Exactly. If you come in with a budget, discount price, that says something about your confidence and your experience. If you come in and say, “Yeah, I’ll do that, but it’s 20 grand,” they go, “Okay, either you’re completely out to lunch, or you know something I don’t.”

Ask for a slice of the pie

Dan Mall has a really great way of putting this. You want a slice of the pie. Think of the value as a whole pizza. If the client gets the whole pizza and you say, “I just want one slice,” that’s an easy ask.

But the smaller clients who make a small return in their business have a smaller pie, so your prices are naturally going to be smaller.

Let’s do two speakers. One is a New York Times bestselling author with an email list of 100,000 people, and their brand probably makes $500,000 to a million a year.

The other is really niche, and no one really knows who this person is. They have a book, skill, charisma and good content, but they’re pretty new, and maybe make an extra $20,000 a year on the side of their full-time job.

Say you build the bigger client something that captures more of their email list, sells more books, gets more people into their new coaching program and books more speaking gigs. Over the next one to three years, that could be tens or hundreds of thousands more for them.

If it’s $500,000 over three years, that’s the pie. 10% of it is $50,000. Asking $50,000 to unlock something like that is an easy ask. Charge them $2,000 and they won’t trust that you can do it.

Now ask the smaller one for $50,000, and it’s literally the biggest insult you could give them. They were going to make $20,000 this year, and you’re asking for two years’ worth of what they make?

But if you can help them make an extra $20,000, 10% of that is $2,000. And you’re still building them a website, a checkout experience, selling their course.

How much of the pie you ask for comes down to how confident you are in delivering that value. Have you done it before? Have you done it lots of times? Have you seen results from it? If you can say, “I’ve done this with 10 other clients and I routinely increase these things,” you can price confidently.

The lower your confidence and the lower your experience, the less of the pie you should be asking for. If you’ve never done it before, you don’t get to ask for 10%, because you can’t confidently deliver those results. So maybe instead of $50,000, it’s $10,000. It puts the pressure on you to do great work, but you’re not asking so much that you can’t deliver.

For the smaller client, you still ask for a slice of the pie, but you don’t give them the full white-glove service. Maybe it’s, “We’ll meet Monday mornings for an hour a week for one month. I’ll tell you what to do, look at what you did last week, and tell you what to fix this week.” $1,000.

Or, “I’ll set up the landing page, film a video showing you how to take it from there, and you can ask me questions for the next 30 days.” $1,500.

It doesn’t take much of your time, and it’s valuable to them. And that client might grow and come back in three years and say, “We’ve got a team of three and a bestselling book now, and we need a total rebrand.”

That’s a totally different way of pricing than, “I spent 40 hours this week, my hourly rate is $100, I upgraded my Claude subscription, so here’s the cost.” Then you’re just moving money around and trying to be reimbursed for your expenses with maybe a little bit on top. That’s no way to run a business, and you’ll never be truly profitable doing that.

Know your floor

You also need to know what you need. Two numbers: how much money you need personally, and what your business needs to operate. Keep them separate, at least on paper.

When your business income is muddied up with your personal needs, it gets really hard to tell how much of the credit card bill is business and how much is you at the grocery store and Costco.

Say you need $30,000 a year to survive. Your business operating costs average $2,000 a month, so $24,000 a year. That’s hosting, your Claude subscription, business taxes, team costs, subscriptions, internet, anything the business absolutely needs to function.

Your floor is $54,000. Make that and congratulations, all your expenses are paid, but you’ve made no money. If you’re not making that much a year, you’re going into debt. The ship is sinking.

Now your goal is to make profit. Say you want a 50% profit margin. Then your goal is $81,000, which is $6,750 a month. If you work with seven clients a year, each project needs to bring in about $11,500.

If you want to run your own numbers, the calculator I use for this is at bradhussey.ca/tools/pricing-calculator.

Then when you charge clients, charge them based on the upside for them. That could be money made, money saved, time saved, stress reduced, peace of mind.

You might think, “I would never pay $14,000 for something like that.” So? You’re not your client. Think of your client with that upside. Would that client take the deal? Maybe they would.

Don’t charge based on your personal consumer opinion. There’s so much more psychology that goes into pricing for a business, and it requires homework on your part.

This came out of a Build with Brad call.