Most new entrepreneurs and freelancers underprice not because they can’t do the math, but because they’re negotiating with their own fear of rejection. The fix is a repeatable process: separate your price from your self-worth, base it on the value you create and real market data, and adjust it upward as proof of your results accumulates. Get this right early, and pricing stops being a source of anxiety and becomes a business decision like any other.
Why do new entrepreneurs and freelancers undercharge?
Underpricing is rarely a strategy — it’s a symptom. Three patterns show up again and again:
- Fear of rejection: a low price feels “safer” because it’s harder for a client to say no, so the founder trades income for the illusion of security.
- Comparing to the wrong people: new entrepreneurs benchmark against the cheapest competitor they can find online instead of the market as a whole, which drags their own sense of “normal” downward.
- No real sense of market rate: without data — actual quotes, actual invoices from peers — people default to guessing, and guesses skew low when self-doubt is involved.
None of these are pricing problems. They’re confidence and information problems, which is exactly why coaching and mentorship move the needle faster than another spreadsheet template.
Value-based pricing vs. hourly: which should you use?
Hourly pricing punishes you for getting faster and better at your job — the more skilled you become, the less you earn per outcome. Value-based pricing ties your fee to the result the client gets: revenue generated, time saved, risk avoided, or brand equity built. A logo delivered in three hours by an expert designer with a decade of experience is not worth less than one that takes a beginner three days — it’s worth more, because it works. Start by estimating the value of the outcome to the client, then price as a fraction of that value, not as a multiple of your hours.
How do you actually find out what to charge?
Market research beats guessing every time. A workable approach:
- Ask 3–5 peers at a similar skill level, in a similar market, what they charge for comparable work — directly, not through vague online averages.
- Look at what your target client already pays for alternatives (an agency, an in-house hire, doing nothing and losing money to the problem).
- Test a price on a real prospect before you “finalize” it. The market will tell you if you’re wrong faster than any spreadsheet will.
This is one of the recurring blind spots Melek Maaroufi addresses in her group training programs across Tunisia: entrepreneurs consistently underestimate market rate until they see real numbers from people doing comparable work.
Price for the client you want, not the cheapest one
Every price you set filters who shows up. A low price doesn’t just earn you less — it attracts clients who negotiate hardest, respect boundaries least, and refer you to more low-budget prospects. A price aligned with the value you deliver attracts clients who take the work seriously, pay on time, and refer you to other clients like themselves. If you want better clients, price as if they already exist — don’t wait for them to appear before you charge accordingly.
When and how should you raise your prices?
Raise your prices whenever your evidence base grows: more completed projects, measurable client outcomes, testimonials, certifications, or simply a fully booked calendar. A good rule of thumb is a review every 6–12 months, with increases of 10–20% for existing structures and larger jumps when you relaunch a service entirely. Announce increases with confidence and lead time, not apology — “starting next quarter, my rate is X” is a complete sentence that needs no justification essay attached to it.
How do you handle “that’s too expensive” without panicking?
This objection is rarely about money — it’s usually about unclear value or comparison to a cheaper alternative that isn’t actually equivalent. Before discounting, get curious: ask what they’re comparing your price to, and restate the specific outcome your price buys. If budget is genuinely the constraint, offer a smaller scope at the same rate rather than the same scope at a lower rate. Holding your price under pressure, calmly and without over-explaining, is itself a signal of competence that most clients register even if they push back once.
Frequently asked questions
Should beginners charge less than experienced professionals?
A lower introductory rate can make sense while you build a portfolio, but it should be temporary and clearly framed as such. Anchor even early pricing to market data and the value delivered, not to your own insecurity about being new.
How do I know if my price is too low?
Clear signs include never getting pushback on price, feeling resentful after finishing projects, or being fully booked with no room to raise rates. If every prospect says yes instantly, you’re very likely underpriced.
What if a client says a competitor charges much less?
Ask what exactly that competitor includes — scope, experience, and support levels rarely match. Restate the specific outcome and process your price covers, and let the client decide with full information rather than matching a rate you can’t sustain.
Pricing confidently is a skill, not a personality trait, and it’s one of the areas Melek Maaroufi works through directly with founders in 1-on-1 coaching, drawing on her experience training 200+ entrepreneurs and 43 professional certifications across business, marketing, and design. If you’re ready to stop guessing and set a price you can defend, explore her coaching and consulting services.