The Price of a Service for a Solo Specialist: How to Calculate It from the Income You Want

A specialist who works alone calculates a price from how much they want to earn per month. The costs are added to the desired income, the sum is divided by the number of services that can realistically be performed, and materials are added on top. The key thing in this calculation is the number of services. It depends on how many hours in a month are really sold.

Let's go through the calculation on an example and see what happens to the price if there are fewer customers than planned. The hourly rate for freelancers is covered in another article: here we calculate the price of a specific service.

In plain terms. Picture selling handmade candles at a fair, wanting to earn $1,000 for the day. You know you sell about 50 a day. So each candle has to bring $20 above materials. If there were only 25 buyers, the same $1,000 is possible only at $40 per candle. The price depends on the number of customers just as much as on the income you want.

What the price is made of when you work alone

Without employees, the price is made of three parts: your desired income, the month's costs, and materials. Your own income is also built into the price as a separate part. Then the price rests on the desired income and covers the costs.

The month's costs include renting a chair or a room, communications, subscriptions, tools, advertising, taxes, and contributions. Take the tax and contribution rates that apply where you are. Materials are counted separately for each service.

Calculating the price step by step

Picture a stylist. She wants to earn $3,000 a month. Chair rental is $800, communications and subscriptions are $200. Taxes and contributions aren't included in this example, so use your own in the calculation. Materials for one service cost $10. A service lasts 90 minutes, and the break after it is 10 minutes. She works 20 days a month, 6 hours each.

Step one: calculate the working minutes. 20 days × 6 hours × 60 minutes = 7,200 minutes a month. That's the maximum: there's no more in a month.

Step two: take the real utilization. Not all hours are filled with customers: some go to booking, messaging, and buying materials. Suppose 60% gets sold. 7,200 × 0.6 = 4,320 minutes.

Step three: calculate the number of services. One service occupies the place for 90 + 10 = 100 minutes.

Number of services = Minutes sold ÷ Minutes of one service including the break

4,320 ÷ 100 = 43 services a month.

Step four: calculate the revenue needed. Desired income of $3,000 plus costs of $800 + $200 = $1,000. That's $4,000 a month, not counting materials.

Price = (Desired income + Costs for the month) ÷ Number of services + Materials per service

Step five: calculate the price. $4,000 ÷ 43 = about $93. Add materials of $10 and you get roughly $103. Round to $105.

Step six: check. 43 services at $105 give $4,515. Materials 43 × $10 = $430, costs $1,000. What's left is $4,515 − $430 − $1,000 = $3,085. That's slightly more than the desired $3,000, thanks to rounding.

What happens if there are fewer customers

The same calculations at different utilization show how strongly the price depends on the number of customers.

For 45%, 3,240 ÷ 100 = 32, and the price is $4,000 ÷ 32 + $10 = $135. In other words, if there are a quarter fewer customers, the same goal requires a price about 30% higher. The price doesn't have to be raised right away. The calculation shows that the desired income and the price depend on utilization, so it's convenient to build it in cautiously.

Advice. It's convenient to calculate on a cautious utilization. If more customers turn up, you'll earn more than you wanted. If you calculate on an optimistic one and there are fewer customers, income will come out lower than expected.

What usually gets forgotten

Three things often drop out of the calculation of a solo specialist.

Time that doesn't get sold. Booking, messaging, purchasing, training, and cleaning the workspace take hours that can't be sold. They're accounted for through utilization.

The break between customers. It's part of the time of one service. Without it, you get more services than are possible.

Small expenses. Tools that need replacing, advertising, and communications often don't get added because each one is small. Together they can add up to a noticeable amount.

How to calculate this from your own data

In BizCalc, you enter your schedule in the “Schedule” section and one workstation in the “Workstations” section: together they set your capacity. Costs are entered as fixed, and materials with the package price, and the cost of a portion is calculated automatically.

In the “Services” section, you specify the price, duration, break, and the specialist's pay. If you work alone, the specialist's pay can be entered as your own desired pay per service. The “Profit” column shows what's left after that. And in the “Forecast” section, the “+” and “−” buttons change utilization, so you can see what happens to profit when there are more or fewer customers.

What's worth remembering

• Your income is part of the price. It's built in as a separate part of the price.

• The number of services depends on utilization. Not all hours in the schedule get sold.

• The break is part of the service time. Without it, the number of services gets overstated.

• Fewer customers means a higher price for the same goal. In the example, 60% gives $103 and 45% gives $135.

• It's convenient to calculate on a cautious utilization. Then more customers give income above what's expected.

Frequently asked questions

How do you calculate the price of a service if you work alone?

Add the desired income and the month's costs, divide by the number of services you can realistically perform, and add materials per service. In the article's example, that came to $103.

Is my income part of the price?

Yes. It's built in as a separate part of the price, so that the price rests on the desired income.

How do you calculate the number of services per month?

Multiply the month's working minutes by utilization and divide by the time of one service including the break. In the example, 7,200 × 0.6 ÷ 100 = 43.

What utilization should you use in the calculation?

A cautious one. Not all hours in the schedule get sold: some go to booking, messaging, and purchasing. Your real utilization is visible from past months.

What if the calculated price is higher than the market's?

Look at which parts can change: the desired income, the costs, the duration of the service, or the break. The market price is better used as a range for orientation.

Do you need to build taxes into the price?

Yes, as part of costs. The rates depend on the country and the form of business, so take your own figure and check it with an accountant.