If you’re basing your pricing solely on a market-driven strategy, you’re playing a dangerous game. For example, if your costs are $75 per hour but your market only supports $50 per hour, either your costs are too high or you’re in the wrong market.

There is no easy way to establish the “going rate” for comparable services, because all services are differentiated by other forces, such as individual processes, brand equity, and features. If you’re going to price your services simply based on the competition, you’d better ensure you’re making an exact apples-to-apples comparison, which is easier said than done and not something we recommend.

Consider instead, a model where your pricing is based on how much it truly costs you to perform one hour of service. In this eBook, we show you how to calculate your full hourly overhead burden–so you can set the right price for your IT services.