If you’re wondering if you’re charging too little, the answer is yes. If you’re wondering if you’re charging too much, the answer is no. How do I know? Well, when you’re charging the right amount, you typically aren’t thinking about how much you’re charging. You’re too busy doing the awesome work you do!
So let’s say you are thinking about what you’re charging- I’m here to help!
If you’re like most of the people I work with, you’re worth $10,000 or more than you’re currently earning. You’re already providing that value- you just aren’t getting paid for it. At least, not yet.
I worked with a client who thought she needed to get a degree to earn a higher salary. She’d been living paycheck-to-paycheck for years and she chocked it up to not having the right degree. Instead of paying up to $40,000 to go back to school, we worked together for 3 months and she got a $10,000 per year raise. Nothing else changed for her to get that raise- she was already doing a great job- she simply wasn’t getting paid for it!
Most of the entrepreneurs I work with are doing amazing work and aren’t getting paid what they’re worth because they are pricing their services too low. There’s lots of confusion about pricing, especially as a solo entrepreneur, and most entrepreneurs make plenty of mistakes starting out.
Here are the top 3 mistakes made by solo entrepreneurs, freelancers, and consultants when it comes to pricing their services.
Mistake #1: Trading time for money
When transitioning from a career to a business, you may be used to thinking in terms of an hourly rate. Who likes punching a clock? No one! Chances are you left your career at least in part because you want the flexibility and freedom of working for yourself, so stop punching a clock for your clients.
Think of your pricing in the terms of a total compensation package. When you’re a salaried employee, you don’t account for every hour- your income is based on your cumulative efforts and results. Additionally, benefits such as paid time off, holiday pay, and insurance, are included as part of your compensation package.
In your business your pricing should be based on the value you provide, not the hours you work. Remember my client that got the $10,000 raise- that raise is the value of the work we did together. My client will continue to reap the benefits of our work for years to come and is not limited to the exact number of hours or length of time we worked together. I offer a raise coaching package, not raise coaching by the hour.
What is the value providing to your clients? What is that worth to your client?
Mistake #2: Selling the service you provide
When you sell the service you provide you focus on you, not your client. At best this puts you in a position of convincing the client you’re worth the cost, or at worst, defending your pricing.
Instead of selling the service you provide, sell the solution. Let me put it this way… if you’re living paycheck to paycheck, do you really want to listen to a pitch about how awesome career coaching is and how it works? Or do you want to increase your income? Most people start listening when I start talking about increasing their income $10,000. That extra income is the solution, not the service.
What problems do you solve for your clients? What is your solution and why is it the best solution?
Mistake #3: Working for free
There are many examples of entrepreneurs working for free. Let’s consider a few…
You work for free when your friend or family member asks to “pick your brain”.
You work for free when someone asks you to provide a product or service in exchange for “exposure”.
You work for free when a fellow entrepreneur offers to “do a trade”.
You work for free when you price a project and new objectives or deliverables are added after the fact, and you don’t renegotiate your pricing.
You work for free when you price a project and new challenges or complications are introduced, and you don’t renegotiate your pricing.
The list goes on…
Stop working for free. Just stop. Please.
The more you value your time, the more other people will value your time. It becomes easier to price your services appropriately high when you aren’t giving so much away for free, and I promise you the right clients are willing to pay your appropriately high price the more you value your time!
Are you making any of these mistakes with your pricing? Mistakes are okay, by the way, and I want you to move past these mistakes and re-evaluate your pricing. Chances are you’re already doing the work to increase your income at least $10,000 this year. Unless you really love working for free. Which you don’t.
I want you to stop worrying if you’re charging enough and to redirect that energy into being awesome at what you do and making a difference in the world! The first step in raising your pricing is to stop making the top 3 mistakes, and start earning what you’re worth!
(And, if it’s not really obvious yet, raise your prices, then leave a celebratory comment below and I will do the dance of joy in your honor!)
