What your service is worth. 14 Incredibly Practical Steps.

How would you know what your service is worth?

When I first started Coaching my business clients I used to be surprised at how much they were undercharging and had no formula for setting their rates.

“This just feels like the right amount”

“I don’t think anybody would pay more than that”

“This is the going rate for other [same businesses in my field/area]”

It became very clear to me that one of the things that honest sole traders (in a service-based business) were struggling with knowing what their service was worth. Products somehow felt easier to price –   you have a cost of making or buying the product plus a markup for profit.

Many of the business owners I spoke to had no mathematical formula or were simply plucking numbers out of thin air or comparing themselves to others.

Where do you stand on this?  Have you thought carefully about what your service is worth?

I have a formula that might just help you.  And you might be surprised at how much more you could earn.

Let’s do a rough exercise to get an idea of your training and experience as financial worth:

Before you start you will need a calculator, pen and paper and an hour or two set aside to take this seriously.

You will also need to gather information on how much money you have spent on training since you started this job, how much your business expenses are (and an average of 3 months should do) and how many clients you can realistically fit in, in a week.


Abacus. How to know what to charge as a sole-trader in a service business.

Let’s start with skill.  What are your skills worth?


 Step 1.  Grab a piece of paper and set the timer on your phone to 90 seconds!

Brain-dump out all the skills you have, whether related to your business or not.  Be fearless in this exercise.  Get it all out for the full 90 seconds.  Don’t stop until the timer is up.

Once you have completed this, take a breath and relax.

Label each item in the list, in order of importance of how these skills relate to your business.  Which skill is absolutely vital?

Which can you manage without for now?

Follow down the list until you reach the bottom and least important skill.

Was that hard?  Did you get a good long list of things? 

If not do it again!  Yes really,  you didn’t get to become a grown-up without learning a thing or two.  Put it all in there until you have at least 15 items on your list.

Once you have this list of skills you can start to build a picture of all the things that make you worth something.


Step 2.  Now cross off anything that absolutely does not relate to your business at all

For example, if you were skilled at cutting your dog’s toenails yet you are a counsellor – maybe cross off ‘pet-grooming’.

Be very cautious when crossing anything off, as sometimes even unrelated skills in the bigger picture have helped us shape how we do what we do.



Step 3. Look at each item on your list.  We are going to figure out what they are worth.

If you had NO CLUE how to do each skill yourself you would have to pay someone right?

If you expected to pay per hour for this skill how much would you expect to be charged?

Don’t stop to think – write the first hourly rate per skill that comes into your head.  Do this for each item.  You have 30 seconds – GO!

Now go down the list and add up the figures.

Divide this figure by the number of items still remaining on your list for an average cost.

This is a rough idea of the worth of your skills per hour.




Step 4.  Next, think about being an employee – what’s the minimum wage now?

About £10.42 I think (in **2023 for ages 23 and over).

Imagine you are your own employee who has been in the business for as long as you have (include your years of learning/training too).

How many years have you worked on this, and how many years have you essentially been working for yourself (regardless of money)?  How many years of experience are you worth?

Take that £10.42 base rate.

Now add 67p for every year you have worked (the average pay increase is 6.4% as of  *Nov 2022).

What’s the total?  This is your hourly rate based on years of experience.




Step 5.  Add up all the money you have spent training and developing yourself in an average year (Add up all your training costs and divide them by the number of years since you started training for the average).

Divide this figure by the number of clients you would like in an average year.

That is how much your training is worth to each client.



Step 6.  Add up figures ‘A’, ‘B’ and ‘C’.  This figure is a base hourly rate for your ‘working hours’.

However, as all self-employed people know.  You do not get paid whilst doing your admin, off sick, while marketing, on holiday etc.  So we need to dig a little further still…

How many hours do you work in a week?


Step 7.  Multiply your ‘ABC’ figure by the number of hours you work in a week.  This is your weekly rate (WR).

Now take your weekly rate and multiply it by 52

This is your annual rate (AR). Write this figure on a piece of paper.

writing great content for your website

But, if you charged your clients just the ‘ABC’ figure you would NOT make your annual rate.

Why not?  Because you need to account for the following:

  • Outgoing business costs
  • Holiday weeks
  • Days off
  • Possible Sick Days
  • Tax and National Insurance (UK)


Eek!  So what to do now?

First, you need to look at all your Business Expenses for the year.  I recommend you take a 3-year average if you have enough figures.  If you have a bookkeeper they can help with this figure.


Step 8.  Add up all your expenses for a year. This total is your Annual Expenses (AE)

Write your Annual Expenses total on a piece of paper (AE).


Step 9.  Take your Annual Expenses (AE) and add them to your Annual Rate (AR)

This will be the total amount you will need to earn for a year to cover your skills, experience,  expenses and training.

Write your Annual Expenses total on a piece of paper (AR).


Step 10.  Once you have your total ideal figure you can now work backwards to get your hourly rate.  Keep this total ideal figure handy – we will need it again soon.

There are 52 weeks in a year.  Decide how many weeks of holiday you would like in a year (let’s say 4 weeks).  Take that off the year.  This leaves 48 weeks.

Then let’s say you need a week for possible sickness.  The new amount is now 47 weeks.


Step 11.  Take your ideal annual figure and divide it by 47.  That is the figure you need to work in a week. 

Your Ideal Week Figure 

Now how many client hours (time spent actually with your customer) can you work in a week?  For example, let’s say you spend 4 hours a day with a client for 4 days of the week (as you will need at least a day for admin/marketing work, preferably two).

4 hours multiplied by 4 days is 16 hours per week with a client.


Step 12.  Take your ideal week figure and divide it by (in this case 16).

That number is your Hourly rate (so far)



We need to allow for Tax and National Insurance.

This is the part where most people come unstuck.

Happily, Step Change Debt Charity has a handy tool for working out how much you need to set aside each month for your Tax and NI (phew).

You will need your total Income (Gross) and your total Expenses figures.

When you have them handy head over to:


And put in your numbers.

When you have the figures you need to put aside each month for Tax, and both types of National Insurance, come back here.


Step 13.   Add up how much you need to set aside for Tax and NI each month and multiply it by 12 for your annual figure.

Then divide it by the number of working weeks you have in a year.

Then divide this new figure by the number of client hours in the week.

Add this number to your hourly rate from step 12.



Whether that’s 1-2-1 client work, workshops or group sessions, however, you choose to earn your crust.


Now breathe a make a cuppa – you have done extremely well to get this far.


Bonus Step…


Start to meditate/visualize earning this hourly rate on a daily basis.  Really believe that you already have it.  What does that feel like, what does that look like?  If you earned this every hour you worked (including office time and marketing hours) what would you earn in a week, a month or a year?  What could you do with that money?  Is it enough? 

If it doesn’t look like enough to fulfil your passions and dreams then double it – repeat this until you have all the money you need.  Now visualize again – what does this look like, what does this feel like…?

Practice valuing yourself and what your service is worth in this way every day before you turn on your phone/computer/device.  Start your working day in a positive financial state of mind.

You owe it to your clients, you owe it to yourself and you owe it to the universe to redress the balance – to receive as well as to give.

The old saying is wrong – it is NOT better to give than to receive – it is balanced to give as well as receive!


This exercise gives you a rough idea of the VALUE YOU, your experience and your training in your business, and what your service is worth.


Of course, this isn’t as good as a financial plan of action or professional financial advice.  But it’s a good starting point.

Are you surprised at how much further along in your field of expertise you really are – are you better than you first thought?

If you are reeling at this maths don’t worry.  As a business coach, I can take you through the process and do the maths for you – along with lots of other cool stuff.

Find out more about my coaching services here:

Click For Small Business Coaching

With love,

Claire xxx




*From statista.com, Nov 2022

**From UK Government Website, National Minimum Wage 2023

***Original ideas from Wallace Wattles, The Science of Getting Rich

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