How to Price Your Work as a Nano Business

Underpricing is the fastest way to work yourself into exhaustion while making no money. If you run a nano business (just you, or you plus one), this guide shows how to set a price that covers your real costs, pays you a wage, and still lands the sale. No formula worship, just the reasoning behind a number you can defend.

Why nano businesses underprice by default

Most solo owners price by looking at competitors or by guessing what feels “fair.” Both ignore your actual costs. A competitor may have volume, cheaper suppliers, or a spouse’s income covering the gap. Copying their price copies their hidden subsidies, not their profit.

The nature of the problem is that a nano business has no one to absorb mistakes. There is no marketing department, no accounts team, no buffer. Every unbilled hour is your hour. So your price must fund the whole business, not just the visible task.

Build the number from the bottom up

Step 1: Find your real hourly cost

Add your target yearly pay to your business expenses (tools, insurance, phone, travel, taxes set aside). Divide by the hours you can actually bill. That last part matters: a solo owner rarely bills more than half their working hours. The rest goes to admin, quotes, and finding the next job. If you want 1,000 billable hours a year and need 60,000 in total, your floor is 60 per hour, not 30.

Step 2: Price the outcome, not the clock

Clients buy results, not minutes. Once you know your hourly floor, translate it into a project or package price. A logo is not “six hours”; it is “a brand mark you can use everywhere.” Fixed prices also protect you: if you get faster, you earn more, not less.

Step 3: Add a margin for risk

Scope creep, late payers, and rework are certainties, not surprises. Adding 15 to 25 percent on top of your floor is not greed. It is the reserve that keeps you solvent when one job goes sideways.

A real scenario

A freelance bookkeeper charged 25 per hour because “that’s the going rate locally.” She was booked solid and broke. We rebuilt her number: 45,000 target pay, 9,000 expenses, and only 900 realistic billable hours. Her true floor was 60. She switched to a monthly package of 350 per small client, which mapped to roughly 65 an hour. She lost two price-shoppers and kept the rest. Same work, 40 percent more income, fewer clients.

Common mistakes and how to fix them

• Pricing per hour on everything. Fix: quote per project so speed rewards you.
• Forgetting non-billable time. Fix: divide by realistic billable hours, not total hours.
• Discounting to close fast. Fix: change scope, not price. Remove a deliverable instead of cutting the rate.
• Never raising prices. Fix: review rates yearly and raise for new clients first.
• Apologizing for the number. Fix: state it plainly and stop talking.

Action steps

• Write down your target yearly pay and total business expenses.
• Estimate realistic billable hours (assume 40 to 60 percent of work hours).
• Calculate your hourly floor, then add a 15 to 25 percent risk margin.
• Convert the rate into 2 or 3 fixed packages.
• Test the new price on the next three enquiries before changing it.

Conclusion and next step

A defensible price starts with your costs, not the competition. Do the bottom-up math this week and rewrite one offer as a fixed package. If it feels slightly uncomfortable to say out loud, you are probably close to right.

FAQ

Should I show prices on my website?

Show a starting price or a range if your work is fairly standard. It filters out bargain hunters before they cost you time. Keep custom work quote-only.

How do I raise prices with existing clients?

Give notice, apply the new rate to new work first, and frame it as a scheduled review. Most reasonable clients expect occasional increases.

What if a client says I’m too expensive?

Ask what budget they had in mind, then offer a smaller scope at that number. Never keep the same work for less money.

Is hourly or fixed pricing better for a nano business?

Fixed is usually better once you know your speed. It caps client risk and rewards your efficiency. Use hourly only when scope is genuinely unknown.

References

For general small-business financial guidance, the U.S. Small Business Administration (sba.gov) publishes free resources on costing and cash flow that apply broadly to solo operators.