Talking about money or your rates can be an uncomfortable process.
We need to get more confident when we talk about money!
Perhaps the whole “not discussing money” is a hangover from the office world where salaries are never discussed? So many of us don’t have the confidence to price ourselves correctly or increase our pricing. The challenge of how to set your pricing comes up a lot in our membership community and we see it discussed widely in Facebook groups.
We have had countless conversations with freelancers and small business owners where they don’t have time to think about their pricing. Suddenly they’re busy and find themselves committed to a rate they’re not happy with.
Many of us are frustrated by clients with high expectations and wanting a lot for little or no money.
We know how disheartening it can be when you’re starting a new business, trying to secure regular customers and get the rate you deserve.
Changing careers or starting out, what do I charge?
We all need to pay the bills and also for many of us who may be changing careers or taking the plunge to go freelance we are keen to get that much-needed experience, so we jump to say yes, and this can create a bigger problem.
Working for a rate you are not happy with is likely to cause you to resent your customer. So it’s worth spending time thinking about your pricing and brainstorming it with others.
However, there is something else to consider: it’s not always about immediate income. Gaining experience is important too and this can be gained by volunteering or from taking on a project at a lower rate.
Think about the long-term goal and where you want your rate to end up, and also remind yourself you are on the lower rate whilst you are gaining more experience and building the customers’ trust and confidence in you.
The golden rule is to always make sure you that you are agreeing to a discounted price on your terms. Either for a short-term project to get experience or with a set date when your prices will be reviewed.
How do you know what is the right rate to charge for what you do?
This is very dependent on the level of experience you have and what you are actually offering. You will charge based on your experience not just on the actual service you are offering. Take for instance at hairdressers you would expect to see different rates for the Style Director and Junior Stylist. Customers don’t question this as they’re used to seeing different prices for different levels of experience. Likewise, if you’re a business coach the salary range could be anything from £50-£1000/hour depending on how much experience you have.
You are paying for their extensive experience and expertise.
Should I put my prices on my website?
If you share your prices on your website there is an argument that you can get rid of time wasters or “tyre kickers”.
You can get rid of those potential leads that just want a chat or to spend hours talking about what they want only to say “they don’t have the budget”.
Being confident and upfront with your pricing means you eliminate time wasters. It radiates confidence and shows people you know what you are doing.
Should I price by the hour, project, or for services?
We’ve done a lot of research into this and we’ve tried and tested all of them! The resounding answer is you shouldn’t price by the hour (there could be exceptions to this rule and we’d love to hear them).
The faster you get and the more experienced you get means you are potentially losing out by restricting yourself with an hourly rate.
When do you bring up money with a customer?
When you meet with a client do you rush to give them your pricing or quote for the work they are offering? Use the first meeting to talk about the project and work they want you to do and then go away and put a quote together. This initial meeting should be a discovery process, find out what the brief is, find out more about your customer and then go away and put a quote together.
Most people feel more comfortable putting a quote together and emailing it over after a meeting rather than giving an on-the-spot price. Make sure you take time and create a template proposal for your customers. Clients will take you much more seriously if you do. Don’t overwhelm them with a 10-page document unless it’s really necessary though. But equally, don’t send them a boring Word doc without any effort or a plain email reply.
If you are asked to give a quote in person, the golden rule is “don’t fill the silences”. Give your price and pause, don’t automatically keep talking and giving more options. This is all part of the negotiating process, you need to be ready to negotiate in person as well as by email. If the answer is “that price is too high” you could ask them what their budget is rather than automatically lower your rate. You could also ask them why they think the price is too high, you are more likely to get more information if you ask an open question.
Most customers will be happy to let you go away and revisit your quote rather than haggling on the spot. So buy yourself some time and say you will have a look at their budget and see what you can do for that price.
Getting your pricing right is critical. You need to be realistic and price based on experience and what is right for your industry. But going in too low devalues your services and devalues the service within the industry.
Do you want help working out your ideal rate? Download our FREE pricing infographic and work out your pricing goals.