I’ll be the first to say that knowing how to price your side hustle services is one of the biggest challenges you can face when you’re just starting out in your business. Looking back on my first two-to-three years here at Mighty Bean Co., I remember how I would continually change my prices in an effort to find a pricing model and structure that worked for me.

It was stressful, to say the least!

Whether you’re just starting your side hustle or you’ve been at it for years, you know that pricing is a big deal — not only does it directly affect your side hustle’s profitability, but it also influences how people perceive the value of your product or service. As I learned the hard way (more than once), the right price can often be the difference between a client accepting your proposal — or rejecting it.

But knowing exactly how to price your side hustle can sometimes feel like a dark art:

Price too high, and people may be hesitant to buy from you or have unrealistic expectations around what you can deliver.

Price too low, and people might think you’re inexperienced, low quality or maybe even too good to be true.

Ay, caramba!

So, what is the best way to price a side hustle? Should you charge hourly or per project? Is there a right (or wrong) way to set your prices? These are all great questions to ask, but before we get into them, there’s one super important thing I want you to know:

You do not have to work for free

One of the most common questions I get from new side hustlers during one-on-one strategy sessions is whether they should offer their services for free in order to establish themselves and build their portfolio. My answer (every single time)?

No.

Why? Because time is money, and no matter how inexperienced you may be, your time is still valuable.

I know how hard it can be to build a portfolio and get a side hustle off the ground, and offering your services for free can seem like the best possible solution. But believe it or not, giving your services away for free can actually hurt your side hustle’s growth; it sets the expectation among clients that you work for free, and that expectation can be hard to change.

Instead of working for free, consider any of these great tips to help you build a creative portfolio, no work experienced required. (Also, notice how, in that in that post, “working for free” is really just working for yourself?!)

Now that I’ve convinced you not to give away your talents for free, let’s look at some of the different pricing models you should consider when thinking about how to price your side hustle services.

5 Pricing Models to Consider for Your Side Hustle

When thinking about how to price your side hustle, there are a few pricing models to consider, all of which have their own pros and cons. Here are five common pricing structures:

Hourly

Hourly pricing is a pretty straightforward model where the client gets charged based on the number of hours it takes you to deliver a service. It works well because it’s flexible, and you can adjust your hourly rate as you get more experience and develop your skills. Best of all, a lot of clients like hourly pricing because they know, upfront, exactly what they’re paying for. If you’re just starting out in your side hustle, I’d recommend using hourly pricing until you’ve gotten some more experience and a better understanding of your offering.

But one of the drawbacks to hourly pricing is that it requires you to consistently track your time. The good news, though, is that other than being a bit of a pain, tracking your hours is relatively easy to do with automated tools like Toggl.

Project-Based

Under this pricing model, the client pays a flat fee for your entire service. This is a convenient option for you and the client; you know exactly what you’ll earn each time, and the client knows upfront exactly what they’ll need to pay. Project-based pricing is a great option if you’ve offered your service enough times to know the average amount of hours it takes you to complete.

But as with every model, this option isn’t without some disadvantages. Project-based pricing assumes the client won’t have any asks above and beyond what’s outlined in the scope of work (SOW), making it easy for the SOW to exceed the amount of hours you’ve accounted for. If you find your clients’ asks and deliverables are constantly exceeding your SOW (known as “scope creep”), it’s probably time to review and tighten up your process.

Tiered

With tiered pricing, you can offer different packages, at different costs, with different levels of service. This is a great way to show the versatility of your offering, attract diverse clients and even upsell your services.

Although tiered pricing can give you more flexibility, it’s important that you structure your packages in a way that’s logical and strategic, and doesn’t confuse potential clients. If you think tiered pricing could work for your side hustle, here’s a great blog post to help you get organized.

Retainer

If you have a returning client and don’t want to do up a new quote for every project, a retainer is a great option to consider. With a retainer, you can charge a set regular fee (e.g., monthly) for a recurring service, which leads to steady revenue and increased customer loyalty. It’s a win-win!

If you’ll be using a retainer in your side hustle, you’ll need an ironclad contract that clearly spells out what’s included in the scope of work and what’s not. This will save you from potential headaches down the road. (If you don’t already have a contract, I highly recommend The Contracts Market; I use it for all my client work!)

Value-Based

Over time, a lot of side hustles transition to costing out their services according to their perceived value. Under this approach, the client pays for the outcome of your service rather than process or time you put into it. This is hugely popular in the brand design community; designers will often charge based on the long-term impact of their work and the money it will eventually generate for your side hustle.

Although value-based pricing allows you to charge more for your services, it can be a harder sell. You’ll need to have the experience to back up your pricing and the numbers to quantify the impact of your work. I would strongly recommend getting a few years’ experience under your belt before pivoting to this pricing model.

Okay, so now that you know the different types of pricing models, let’s go over some final things you’ll need to consider when deciding how to price your side hustle.

Make Sure You Understand the Operating Costs of Your Side Hustle

Regardless of the pricing model you choose, you need to have a full understanding of what it’ll cost not only to get your side hustle up and running, but also to keep it going. For example, depending on your industry, some of your operating expenses may include software (Adobe, Canva, CRMs), marketing and advertising costs (website hosting, social media, paid ads), travel expenses and insurance, just to name a few. These costs are fixed, meaning they’re there regardless of how well (or not well) your side hustle does, which is why it’s critical that you factor them into your pricing.

Be Sure to Do Your Market Research

As much as you want your business to stand out, when it comes to figuring out how to price your side hustle, it’s a good idea not to stray too far from what’s standard in your industry. For example, if your side hustle is in the wedding photography space, you’ll probably want to use tiered pricing (or value-based, if you have the experience to support it).

This is where market research comes in. While a simple Google search of competitors and peers in your area is a great starting point, there are also rate sheets like these ones from Women Who Freelance and Freelancing Females that show exactly what other women in your industry are charging. Be sure to take some time to understand what the going rates are so that you don’t end up over- or under-charging.

Remember to Factor in Your Side Hustle Goals

Once you’ve determined the pricing model that’ll work best for your side hustle and you’ve done the necessary market research to understand how your competitors are pricing their services, the last thing you’ll need to think about are your personal goals.

Everyone has their own reasons for starting a side hustle, but almost always, one of those reasons is to make money — and this is where the importance of goal-setting comes in. Your goals are crucial to setting your prices because they help define your financial targets and guide your business strategy. For example, if one of your goals is to earn an extra $2,000 a month from your side hustle, you’d need to set your prices based on how many hours you can dedicate to your service each week and the value you offer.

Clear goals like these help make sure your prices align with your goals and the long-term sustainability of your side hustle.

Some Final Thoughts on How to Price Your Side Hustle

Looking back on my near five-year journey growing this part-time business, I can honestly say that figuring out how to price my services was one of the biggest challenges I faced. Between battling imposter syndrome to finding the cost model that works best for me and my audience, it was quite the ride! But after my fair share of pivoting, thankfully, I’ve found the right solution for my business.

As much as I hope this post has been helpful to you, if you’re still stuck on how to price your side hustle, I’d love to help. Click this link to book your one-on-one strategy session, and let’s work together to find the right pricing solution for you!