How Much Should I Charge for Organizing Services?
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One of the hardest decisions you have to make as a professional organizer is how much to charge for your services. The biggest mistake you can make is to base your hourly rate on what you earned in your last job. After all, as an employee, you were paid for every hour you worked, you weren't responsible for covering such expenses as your office furniture or computer, and your employer may have borne the costs of training and health benefits. Furthermore, it wasn't up to you to pay for business cards or other marketing materials!
There are a number of factors to consider when setting your rates, including:
- What Services You Offer: Generally speaking, you can charge more for business services than residential. Not only do businesses usually have larger budgets available to them, but they can write off the cost of your services as a taxable expense.
- Your Level of Expertise: How much organizing experience do you have? Have you completed any specialized training? Do you hold any certifications? How long have you been in business?
- The Going Rate in Your Area: If you reside in a small town, don't expect to earn as much as your colleagues in larger metropolitan areas. Do your homework and know what is realistic. If you charge too much, you may lose business to your competition. Keep in mind, however, that if you charge much less, clients may perceive that the quality of your service is not as good.
Most business start-up guides will provide you with a formula for calculating how much you need to charge to attain your target income. The important thing to remember is that you will not be billing for 100% of your time. As discussed in my post, Can I Run My Organizing Business Part Time?, you need to spend a significant amount of time marketing and managing your business. If you plan to outsource some of these tasks, that's great, but the cost of these services will need to be factored into your rates as well.
At the end of the day, not only do you have to be earning a sustainable income, you also have to be comfortable with the rates you're charging. If you're more of a "feeling" type than a "thinking" type, you will probably appreciate the pricing exercise described in a free e-book, Finding Your Right Price by Mark Silver of Heart of Business.
Additional Resource
Maria Gracia's Ultimate Guide for Professional Organizers covers tips specific to professional organizers on setting rates and much more, to help you start and grow a profitable organizing business.
It's often said that most people are undercharging, rather than overcharging, especially women. After all, nice girls don't talk about money, right? One person who is passionately devoted to helping women earn at their potential is Mikelann Valterra, author of Why Women Earn Less. She has a fantastic blog in which she addresses setting and raising fees and many other related topics, and I highly recommend it.
Photo by michael ledford on Reshot
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All excellent points, Janet. There’s another reason professional organizers may price themselves too low. The best advice I heard over and over when I started as a professional organizer was that whatever I was thinking of charging, I should double it! I scoffed. Repeatedly.
When I escaped from the corporate world and started my business (I can’t believe it was 8 years ago!), I made only one tactical mistake. I set my rates based on what *I* would have been willing to pay someone to do a comparable service. I didn’t take into account that I’m…well…cheap. Frugal. Parsimonious.
Whatever you want to call it, I was unintentionally undervaluing my service by charging too little, not because I didn’t think the service had value, but because I didn’t appreciate that people might think too low a cost implied a lower value. Professional organizers tend to be do-it-yourselfers and problem-solvers in their own right, so it’s hard to conceive of how much such an important and life-affirming services as ours should cost, especially when it comes so easily to us!
Since I can’t fathom buying a anything but the cheapest mode of safe transportation, for example, the idea of buying a $20K+ car (let alone a $40K+ car!) was foreign. I couldn’t conceive of people spending $4000 on a desk–when I casually suggested to a client she’d be better off with a desk that had at least two file drawers, I was thinking Target’s dorm desks, not an antique shop’s hand-carved masterpiece.
This not to say that everyone is buying Jimmy Choo and Christian Louboutin shoes, though I’m shocked that anyone does. My point is that people spend what they think a product or service is worth TO THEM, and if it’s priced too low, based on their expectations, they assume the value is too low and search elsewhere.
The points you mention fit in with this, especially with the going rate, not only of other professional organizers in the area, but other service professionals. It’s important that the rate we charge is commensurate with the value of the service we provide–we are not merely moving tangible items around a room, but (as NAPO says) transferring skills and changing the relationship people have with their tangible items, their tasks and their thoughts.
To do this, we have to recognize that our skills and abilities do not come easily to our clients–that’s why they need us in the first place, and why they are actually better at evaluating our value than we might be, ourselves (especially in the beginning).
Julie, thanks so much for sharing your two cents worth – or should that be ten dollars? 🙂
I’ve also heard “charge twice what you think you should” and had trouble with that concept, since I too am on the thrifty side.
Although there are lots of people who are cautious with money, they are probably not necessarily the type of clients you want. Much better to attract those who value your service and have the willingness and the funds to pay what it’s worth.
And, to be clear, a significant portion of our prospective clients are not only spending money on duplicate items due to their disorganization, but they’re losing out on financial opportunities (tax deductions, rebates, etc.) because they can’t find the documentary proof they need, and are paying too many fees/fines because they have neither the systems nor the awareness of how to avoid these fines. Even at multiples of our initially-designed rates, we’re still saving our clients enormous amounts in the short and long run.
You got that right, Julie! I was on one organizing job where we found a misplaced check that was large enough to cover the fees for two organizers for the day, the supplies we’d picked up on his behalf, and then some!
Janet & Julie – great post & comments!
I love the point made about being frugal – I know I am – so I made the same mistake when I started. I never want to pay anyone for something I could do myself (just cleaned my own tire rims today!) but there are so many people who will – and want to! It took me a while to realize that the skills I have are valuable to others – because they don’t have it.
I had to figure out that even though I’m competent at many things – I did hire out for things that I just couldn’t do – so why wouldn’t other people. I mean, how many people got into organizing as a profession because they realized – WHOA – people will PAY me for something I love to do – and do really well?!? Who knew? It comes so naturally to us that we figure everyone could do it. But no, they can’t. Hence, the PO career!
Liz, that’s another good point – when something comes naturally to you, it takes a while to realize that it’s not that easy for everyone. And to ask someone to pay you for doing what you love to do feels pretty weird at first!
Janet, excellent article. I’ll be sharing this with others if that’s okay with you. Of course – linked to this page. This is one of the number one questions I get – “how much should I charge”.
P.S. Based on this type of content, you probably are worth twice what you charge 🙂
Jim, I would be delighted, of course, and I’m glad this article will be useful to you in your work with other businesses.
Your “P.S.” was very helpful to me today, as I’m currently putting together new packages and struggling with these very same issues!
This is a big topic. I do think women tend to underprice. At the same time, I think each person’s situation is unique. Some are in a market where money really isn’t an issue, while others are serving in markets where a budget for services like ours might be quite limited.
I do think everyone tends to “undervalue” what they do with ease. After being in this business for 14 years, I’ve come to see that what comes easily and naturally to me does not to everyone. The same can be said for many of their skills and strengths. I think this is the master plan, that we all contribute our abilities to the marketplace, and at the end of the day, we create a “whole.”
I have seen differing models, from project pricing to value pricing to hourly pricing. I have found an approach that works for me and is simple. I’ve only really raised my prices once, and that works for me.
As you point out, there are many factors at play in making a pricing decision. I took courses on pricing in business school, so if someone is feeling a bit uncertain, this is normal. There’s a lot to consider.
Those courses on pricing give you an advantage that most of us don’t have! Thanks so much for sharing your insights.
There is an art to finding that sweet spot with how you price your services. It involves using your head and heart. I appreciate your suggestions for figuring out the right formula. And it’s good to remember that women tend to undervalue their services, as you mentioned.
I’ve increased my rates multiple times in the 30+ years I’ve been in business. While many factors were considered, something my dad taught me when I first started has been a guiding force. He said, “If every potential client you talk with hires you, you aren’t charging enough. If no potential clients hire you, you are charging too much. And if some hire you and some don’t, you are probably priced exactly right.”
That’s brilliant advice! But it’s important to remember that pricing isn’t the only reason someone will hire or not. Your prices can be perfect, but if you can’t convince them that you can accomplish the results they need, they’ll naturally be hesitant.