Do You Charge What You’re Worth?
There’s a good chance you don’t. You may think you don’t have enough experience. You may fear that you can’t deliver high quality services. You may just not feel “good enough.”
If you are a true beginner you might want to charge a lower fee in order to gain experience; however, before you do this, I urge you to talk to a coach or a trusted advisor to do a “reality check.” You may not be able to see clearly all the life experience, knowledge and value you are bringing to the table.
If you are not a beginner, here are a few tips to effectively master the emotionally loaded topic of how to charge what your worth.
1. Pricing is an art not a science. There are no hard and fast rules. You can experiment. Establish a baseline by calculating the amount you absolutely must have each month to meet your expenses then double that amount to account for those variable life insurance quotes, savings, retirement and other business expenses you may not be taking into consideration.
You may want to triple your initial amount so that you’ll have money left over for travel and other enjoyments. Divide your total amount by 20 hours a week for 48 weeks (or the number of weeks you expect to work in a year). I say 20 hours because some of your time will be spent on marketing, administration, professional development, research, etc. If you will actually be delivering billable services more than 20 hours a week, adjust the formula to fit your situation. This amount is the minimum you need to be making during each hour of service.
Try a price on for size and see if you feel satisfied with delivering your service for that fee. If you feel resentment -you’re not charging enough. You can adjust your pricing till you find the range that fits.
2. When delivering services it’s always better to charge a project fee rather than an hourly fee. You are bringing value to the client -you are solving a problem -you are not trading dollars for hours of your vital life energy. Yes, I showed you in #1 how to establish an hourly rate -that’s so you would have an idea of how to price your project. Estimate the number of hours it will take to complete the project or deliver the service and you’ll have a project fee. Yes, sometimes you will find you underestimated and you will also find that sometimes you finish more quickly than you anticipated.
3. Expect the “gulp” factor. Each time I’ve stretched myself to raise my prices, I find myself swallowing, a gulp, as I quote the fee or write it into a proposal. But what a great feeling when the client says yes and you recognize your value. It gets easier with practice.
Deliver excellent service. Be reliable. Be honest. And charge what you’re worth!
I’d love to hear your thoughts – so go ahead and post them here.