I have had a number of clients over the years ask me what they should be charging for their product or service. There are times when I can assist them and other times not so much.
I had one entrepreneur whom I told her, she needed to quadruple her rate; she was billing out at what had been her hourly pay rate as an employee. I then had to explain that her employer was probably paying at least 1.5 times her salary as an employee for employment costs.
It can be easier with a product, you have the product costs, you should have a rough idea of the equipment necessary and its lifespan. You add in the fixed costs and profit margin, and you have a per unit cost. Ok its never that simple, but it should be.
Years ago, I was in a spice shop in Oak Park, I was calculating the square footage and estimated rental costs and could not make that shop enough money to cover the rent, let alone the employees. I never did figure how they covered expenses legally.
I went a few times to a yoga studio with my wife, we paid $15 each for an hour session. I could see how they were covering rent, if their capacity was great enough. Being a cheap CPA I was also thinking I just got charged over half my monthly gym membership for an hour of exercise for the two of us.
There was one client who was planning on doing some specialty counseling service. I had no idea what they should charge, it did not seem that it would be covered by insurance so it would all have to be private pay, but it was such a niche market I could not assist.
I have seen CPA’s who don’t know how to value and price themselves. It’s never an easy proposition. Pricing to some level is a barrier to determine who you prefer to work with.