Client asked "How much?" I panicked. Said $600. He immediately said yes. I knew I messed up. That sinking feeling when you realize you undercharged. The client was happy. I felt sick. He would have paid double. THE PRICING MISTAKE My first invoice processing automation. Client manually entering 80 invoices monthly. Taking 12 hours. At $50/hour internal cost, that's $600/month wasted. I built the solution in 5 hours. Quoted $600. He said yes instantly. That's when I knew. If someone says yes THAT fast, your price is too low. THE VALUE-BASED PRICING FRAMEWORK Stop thinking about YOUR time. Start thinking about THEIR savings. CALCULATE THEIR CURRENT COST: - Hours monthly on manual work? - Their hourly rate? (Use $40-60 if unsure) - Annual cost = hours × rate × 12 YOUR SETUP FEE: - Setup = 20-40% of annual savings - More complex = higher percentage MONTHLY MAINTENANCE: - Maintenance = 15-20% of setup fee REAL PRICING EXAMPLES INVOICE PROCESSING: Client cost: 10 hours/month × $50 = $6,000/year Your setup: $1,200 Maintenance: $200/month FORM EXTRACTION: Client cost: 6 hours/month × $45 = $3,240/year Your setup: $900 Maintenance: $150/month CONTRACT ANALYSIS: Client cost: 15 hours/month × $60 = $10,800/year Your setup: $2,400 Maintenance: $400/month THE CONVERSATION SCRIPT "Walk me through your current process..." (They explain manual work) "How long does that take monthly?" (They say 10 hours) "What would you estimate your time is worth? $40? $50?" (They usually say $50) "So you're spending about $500 a month on this task. $6,000 annually. My setup fee is $1,200, which pays for itself in about 2.5 months. Then you save $500 monthly going forward. Make sense?" (They say yes because the math is obvious) MY LEARNING CURVE Client 1: Charged $600 (should have been $1,500) Client 2: Learned lesson, charged $1,400 Client 3: Charged $1,800 confidently Client 5: Comfortable with $1,800-$2,400 range Current average: $1,800 setup + $250/month BIGGEST LESSON