Starting a home-based business is exciting and rewarding. Exactly how rewarding it is up to you. When you work for an employer the costs associated with doing business are hidden. When you hang out your own shingle, it’s important to accurately account for overhead. Expenses like space, equipment, materials, and labor must be calculated.
Of all the challenges, placing a value on your own time might be the most difficult. Money is an emotive topic. Discussing money and what to charge can fluster even the most talented, confident mompreneur.
This article will show you what’s holding you back from charging what your time is worth, and how to fix it immediately.
Do you value your time?
As a woman — and possibly a mother, daughter, sister, and friend – you are accustomed to giving your time away for free. Have you ever stayed on the phone with a girlfriend beyond a sane amount of time to discuss her relationship, her decor, or a new pair of shoes? Just because your time is free to loved ones, doesn’t mean it isn’t valuable.
If you have decided to work for yourself as an artist, designer, yoga instructor, content writer, proofreader, tutor, massage therapist, virtual assistant, or event planner – you must have a sound pricing model in order to stay in business and continue doing what you love.
Do any of these excuses sound familiar?
Perhaps it has already been suggested to you that you are underpaid. How do you respond?
“I need to get more experience.”
Your rate is the sum total of your experience, education, ability, and follow-through. A client or customer has come to you because you can help with a problem. He or she could have gone elsewhere for a handmade bracelet, company logo, or private yoga lesson. But you got the call.
“I can’t charge more than my teacher, professor, mentor.”
Don’t undervalue your services. And don’t underestimate your particular brand of talent and ability. Perhaps there are others who at first blush might seem more competent. But maybe they are always late, don’t accept PayPal, or have a difficult personality trait.
“It’s so easy; it’s not brain surgery. Besides, I enjoy what I do. I’d feel silly asking for more.”
Just because something comes easily to you, doesn’t mean that everyone can do it.
“I can’t charge that much. My clients won’t be able to pay.”
Try not to focus too much on what you think clients can pay. You don’t know what funds people can access. There may be a line-item in a budget for your particular service. Or they may be able to apply for a grant, get a sponsor, or tap into another resource.
“The client will go elsewhere.”
Clients who are too price-focused may not be your target anyway. They are the type that will be lured away at the first whiff of a better deal. Clients who haggle and try to beat you down on price are telling you up-front that they don’t think your time is valuable. They will continue to behave that way.
Do you have the right clients in your funnel?
Adjusting your price to your clients’ perceived ability to pay is one approach. Positioning yourself to attract new clients who have the ability to pay is another option.
That doesn’t mean that you have to abandon your current customer base in favor of clients with deeper pockets. You could offer a free class once a month or take on one client pro bono.
Explain that in order to sustain your business and continue to provide the great products/services loyal customers love, pricing had to be adjusted.
5 tips to make it easier to charge what your time is worth:
It would be great to be able to just write, paint, create, present, or coach. But in order to do, you have to sell. It’s just part of being an entrepreneur.
1. Introduce yourself
Basic information should be on your website so that you can direct clients there. Write a detailed bio. Include any special training, certifications, or classes. Be clear about what you provide: accuracy, convenience, reliability. Make it easy for them to buy, schedule, or share content. Always collect email addresses, so that you can have another opportunity to present yourself at a later time – this can be done through email marketing.
2. Educate the client on you and your process
I once balked (not audibly of course) at the price of an art print I saw at a street fair in Seattle. The artist introduced herself and explained her background, inspiration, and creative process. I learned that her prints were hand-painted to look like textiles with dyes she had made herself. I bought three pieces from her that day!
3. Consider a two-tiered pricing model
When I began consulting on a social media launch for an online art retailer, I billed at two different rates. I charged a higher rate for strategy and planning and a lower rate for social media management. I worked beyond the length of my contract and stayed with the company as a freelancer for three years.
4. Develop a price list.
A set list of prices discourages haggling. Do people attempt to bargain at a nail salon when the prices are clearly posted behind the register? No. There is an implied assurance that there isn’t one price for some and another for others.
5. Provide estimates in writing.
If you are shy about stating your price face-to-face, the written word is your friend. (And it doesn’t have to be written.) Email, or even a text, is fine. I had a contractor meet me to take a look at a bathroom remodeling project. When I asked for a price after he’d reviewed the scope of the project, he declined to even offer a “ballpark” figure. I received the estimate very quickly after he’d left though. He might have even sat in his truck and typed it out on his smartphone! Nevertheless, he headed off any opportunity to haggle.
What if someone inquires why the price is so high?
Answer the question using a full sentence. Keep it brief. Project confidence. Don’t ramble. Offer a warm smile.
If they follow up with a snarky comment, offer a chilly smile.
If they say they can’t pay it, do not bargain. Merely reply:
“I understand. Let me know if I can help you sometime in the future.” Exit. Or change the subject.
Money is not an indicator of your worth as a person. But it is the means by which you can sustain your business and continue to share your talent. Follow these tips and base your price on sound business practice. Over time you will become more comfortable and confident.
Patricia Ryan Thomas works with Daymond John’s Launch Academy where she shares practical tips on how to launch anything: businesses, blogs, products, creativity. Follow her on Twitter: @PRTplus.