How to price your services: a simple method, with salon, aircon and tutor examples

Start with what you need to earn in a month, including money set aside for income tax and, if you're self-employed, MediSave: CPF Board requires self-employed people with yearly net trade income above S$6,000 to contribute. Then work out how many hours you can actually charge for. Admin, travel, replying to enquiries, cleaning up and marketing all take time nobody pays for.

Made-up example: you work 45 hours a week for 48 weeks a year, and about 60% of that is paid work. That's roughly 1,300 paid hours a year, or about 108 a month. If you need S$5,400 a month, each paid hour must bring in S$50 before any other cost.

Overheads are costs you pay whether or not you work today: rent, utilities, phone, software, insurance, transport you'd keep anyway, and replacing tools as they wear out. Add them up for a month and divide by your paid hours. S$1,620 a month over 108 hours adds S$15 to every hour.

List what each job uses: products, chemicals, printed notes, parking and fuel. Price these per job, not per hour, because a 30-minute job across the island costs more to reach than a two-hour job next door.

Profit isn't your wage; it's what the business keeps for slow months, new equipment and growth. Decide the share of the price you want to keep, the margin, and divide your cost by one minus that margin. For a 20% margin, divide by 0.8: a job costing S$40 is priced at S$50. Don't confuse this with markup: adding 20% to S$40 gives S$48, which is only a 16.7% margin.

Look at what five to ten businesses near you charge for the same service, from their own price lists. If your number sits far above theirs, look for costs to cut or a reason customers would pay more, such as weekend slots, faster turnaround or a guarantee. If it sits far below, you're probably undercharging. Then round to clean numbers: S$48 or S$50, not S$47.30.

A made-up neighbourhood salon with three technicians works out each technician's cost at about S$20 per paid hour, including employer CPF, and its overheads (rent, utilities, shared products, booking app) at about S$10 per paid hour. A one-hour gel manicure uses about S$5 of gel and consumables. Cost: S$20 + S$10 + S$5 = S$35. For a 30% margin, S$35 ÷ 0.7 = S$50. Salons nearby list S$38 to S$58, so S$50 sits in the middle. Add-ons carry their own price and margin: gel removal S$10, nail art S$3 a nail.

A made-up one-man aircon business needs S$6,000 a month for the owner, S$1,600 for the van, fuel and parking, and S$400 for tools, chemicals, insurance and phone. That's S$8,000 over 22 working days, about S$364 a day. Doing about 14 units of general servicing a day across four homes, each unit costs S$26, plus S$2 of materials. At a 20% margin, S$28 ÷ 0.8 = S$35 a unit.

A one-unit visit still needs the drive, so the business sets a minimum charge of S$70 a visit. A chemical wash takes about an hour a unit, so six a day: S$61 of time plus S$8 of chemicals is S$69, and S$69 ÷ 0.8 is about S$86, rounded to S$85.

A made-up full-time secondary maths tutor wants S$5,500 a month, including tax and MediSave set aside, and spends S$300 a month on transport, printing and books. With 20 lessons of 1.5 hours a week, about 86 a month, each lesson costs S$5,800 ÷ 86 = S$67. Students drop off in the school holidays, so the tutor allows 20% for empty slots: S$67 ÷ 0.8 = S$84 a lesson, or S$56 an hour. Similar tutors list S$50 to S$70 an hour, so S$55 an hour (S$82.50 a lesson) fits. Fees are collected at the start of each month: four lessons, S$330.

Ask for a deposit when a no-show or late cancellation would cost you: long appointments, home visits, specially bought materials or first-time customers. A deposit is part of the price and comes off the final bill. Between 10% and 30%, or enough to cover materials bought for that customer, is a sensible range. Our guide to booking deposits covers policies and no-shows in detail.

Then watch for a month. If bookings and average spend hold, the old price was too low.

Each item in your catalogue has its own price and way of charging, per item or per hour, with per kg for laundries and food sellers. Services also take a duration, a deposit to book, and how many units a customer can book, so two aircon units take twice as long and cost twice as much. Options add their own price, such as 'Gel removal +S$10'. Laundries can also set a minimum charge per item and an express surcharge. Customers see your prices on your shop link's price list and booking page.

When you change a price, new orders use it and orders already taken keep the price they were made at. Analytics shows revenue by service, average order and repeat customers, so a month after a price rise you can see whether customers stayed. Catalogue, bookings, deposits and analytics are on both Essential and Business. On Business, a business customer can have their own prices, and accounting shows your profit after the cost prices you enter.