Contributed by SBOC Member:
Founder of the Small Business Owners Community
There’s a Wall Street Journal story making the rounds: the top lawyers in America are now charging $3,400 an hour.
Three thousand four hundred dollars. Per hour.
If you’re a service-based business owner — a coach, consultant, designer, strategist, advisor — that number should change something in your head. Because for years, many of us have anchored our rates to a mental ceiling. We think: I can’t charge $500 an hour, that’s lawyer money.
Well, lawyer money just moved to $3,400. Which means $500 isn’t lawyer money anymore. It’s not even close.
The pricing ceiling moved. Time to move with it.
Mistake 1: Pricing From Your Own Pocketbook
This is the most common error. You set your rate based on what YOU would pay for the service. If you wouldn’t pay $500 an hour for a graphic designer, you don’t charge $500 an hour for graphic design.
But here’s the problem: you’re not hiring yourself.
Your ideal client has a different budget, different pain points, and different urgency than you do. They’re not shopping for the cheapest option. They’re shopping for the best result. And they’ll pay what the result is worth.
You don’t need 50 clients at that rate. You need 10 great ones.
Mistake 2: Pricing Based on Comfort Instead of Value
Many business owners set their rate at whatever number they can say with a straight face. That’s not a strategy — it’s a feeling.
The right question is: what is the value of the transformation I deliver?
If your consulting helps someone close a $15,000 sale, would they pay $1,000 for that guidance? Absolutely. If your advice saves a business $10,000 a month, would they pay $1,000 for a session? In a heartbeat.
Your rates should be directly proportional to the price of the problem you’re solving. The bigger the problem, the higher the rate.
Mistake 3: Serving People Who Can’t Afford You
Alex Hormozi put it perfectly: “The fastest way to make money as a small business owner is to solve problems for people who have money.”
When business owners start out, they default to helping people who are also starting out. Makes sense emotionally. Makes zero sense financially. Those clients have no budget.
The shift is simple: same skills, different client.
A graphic designer can sell a $500 startup logo package. Or a $5,000 rebranding package to an established business that’s outgrown its launch-phase look and needs to look like a million bucks to charge like one. Same talent. Completely different revenue.
Here’s why this matters beyond just making more money: you will never take a day off if you’re not charging enough to cover it.
You can’t hire help if your margins are razor thin. You can’t invest in technology if every dollar is already spoken for. You can’t take a Friday off if working four days at your current rate doesn’t cover the bills.
Raising your rates isn’t greedy. It’s the math required to build a sustainable business that gives you freedom.
The businesses that charge what they’re worth don’t just survive. They thrive. And their owners actually get to enjoy the business they built.
From Businessing with Pat Miller — a daily live show for small business owners. Mon–Thu at 11am CT. Join the conversation at smallbusinesscommunity.com.
Pat spent two decades in broadcasting management and hosting. After leaving the radio industry, he spent time consulting small businesses and realized the support system for entrepreneurs was broken. Where could you find help for improving small businesses and building real connections with other like-minded people. In June of 2020, the Idea Collective Small Business Community was born.