By Saskia Gregory
I remember the moment I realized I was seriously undercharging for my services. The moment when, after years of quietly slogging away, I realized that if calculated how much I was being paid vs. how much time I spent working (including time spent on unpaid yet essential business tasks) that my hourly rate was below the minimum wage here in the UK. Ouch.
Yes, I was getting the perks of flexibility and freedom that many minimum wage workers can only dream of, but for the level of hard work, expertise, time-management, and drive that’s required to keep going as a self-employed writer – things were certainly not adding up.
When I look back now, I realize there were warning signals that I ignored for too long – fortunately for you; I’m here to share them so you can be on the lookout for any signs you need to re-package and reprice what you do.
Here are five signs it's time to raise your service rates.
1. Your clients are not completely invested.
One of my biggest frustrations while undervaluing myself was the lack of clients that were completely committed to their investment in me. It’s easy to feel that the ‘customer is always right’ and continue a working relationship despite difficulties in communication and prompt payment, but remember that also: ‘the customer is not always right for you.’
In most cases, the more you are charging, the less likely it is that your clients are going to just give you a brief and let other projects and plans get in the way.
2. You’re pricing based on time and not results.
Being paid per hour is the standard when in employment, but for those of us who are running our own businesses, it really doesn’t make sense to be offering the majority of our services on a pay-for-time basis. What about the work you do to keep your business running outside of client specific time?
There is also the problem of pricing per hour when you know that you can work more efficiently than your competition. It doesn’t seem fair that you should be paid less for doing a job faster yet to as high a standard (or better) yet it’s natural if you don’t feel comfortable charging for the time you didn’t actually use.
If you’re pricing based on the time you spend, I’d advise really looking at the value you are bringing to your client and the long-term benefits of your results. Can you package your services in such a way that people are paying for the end result and not the minutes you spend helping them achieve this?
3. You’ve never increased your rate.
Maybe you had your pricing right a long time ago, but dare not raise your prices for fear of losing your clientele. Be bold and give yourself permission to get the compensation you deserve. If you are scared of losing a longstanding customer, be confident in your abilities and rest assured that if they value what you do they will adjust to your new pricing.
You could always approach them with details of the pricing change in advance, so they are given an honor period while they decide whether to move forward at the new rate.
4. You’re only scraping by.
Truthfully there are many reasons that you’re only scraping by, but packaging and pricing your services correctly can be a huge help in breaking the cycle of only making just as much as you really need. Think about your personal income goals and how many clients you would need at your current rates to fulfill these, how can you adjust in line with your financial aims?
5. You’re comparing yourself to employees.
For a long time, I’d look at my prices and work out whether they were fair based on what peers would be earning in their office-based careers. Or worse still, what people are earning waiting tables or retail positions. As a then freelance copywriter, running every aspect of my own business and providing people with content that would help them sell their products and services for potentially years to come … it was madness to be thinking this way!
If you’ve fallen into the trap of comparing yourself to ‘employees’ remember that as a self-employed individual you have so much more effort to equate to your pricing. When you charge a client for your services, you need to be pricing to cover all the work you do that you’re not paid for, such as: marketing, client acquisition, and admin.
Plus, there’s the addition of pricing for your expertise as someone who can make their own opportunities, create a business from scratch, and keep motivated without anyone else telling you what to do – make sure you allow yourself a financial reward for this too.
Have you raised your service rates? If not, what's holding you back? Drop us a note below, we'd love to hear from you!
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Saskia Gregory is a success coach for ambitious modern mothers. Helping women build beautiful & inspiring online businesses which provide a lifestyle of fulfillment, freedom, and fun. Want to read more from Saskia? Sign-up to receive her latest newsletter here.