A comprehensive guide to curing your indecision
If you’ve recently gone into business for yourself, you might be wondering what that magic number is. What should you charge your clients? The answer is: It depends. This question can often be met with both frustration and indecision but here are a few helpful things to consider as you try to decide:
EXPERIENCE & SKILL SET
Your experience dictates just how well you know your subject. Do you have a standard knowledge of your field or is it specialized? How long have you been in the profession or how long have you studied it? More often than not, someone who has been doing what they do for five years, would request more pay than someone who has been doing it for one.
What are other people in your profession charging? This question is and isn’t a good way to gauge what you should charge your clients so don’t let this be the only factor you consider, as it will vary depending on industry. For instance, if you’re a therapist, there is no limit to what you can charge a client. If you’re a yoga teacher, you can only charge so much for a yoga class, as people offering these types of standard services usually try to match the price of others. However, if you’re a yoga teacher that is offering private classes, yoga teacher training, and/or a yoga retreat, then the spectrum of price changes entirely and can vary greatly.
Building a client base can take time and it also takes time to find your own groove, in anything that you pursue. While numbers may not be everyone’s forte, don’t let them scare you. With some some simple math and a handy calculator, you can easily reduce your anxiety regarding what to charge your clients by considering all your expenses.
What will it cost to operate your business? Will you be the only employee? Do you require an assistant or will you be hiring other professionals to offer the same services that you do under one roof? When you understand your costs, you will realize what rate is and isn’t worth settling for. You can’t consider a rate that will make you lose money otherwise the business won’t persevere. Sure, you could consider a rate where you break even, as in being able to cover all your expenses void of a profit, however you want to strategize on how you can scale your business over time. By doing so, you will be able to build a reputable business you can be both proud of and comfortable with.
Do you believe you are a person of value and of worth? If low self esteem is something you know too well, be careful not to under charge your clients because you have a subconscious belief that you don’t deserve better. Confidence is key if you want to be a self-operating money-making machine.
Understand who you are as a person. What about you is unique? What makes you, you? Do those things make you a more interesting and well rounded person? If people feel you to bring a particular element to your work, you should consider that an asset that is worth charging for. Just look at Anthony Robbins. There are plenty of people with his knowledge but absolutely no one quite like him.
SUPPLY & DEMAND
If you live in a densely populated area and there are many professionals like you, there is a level of competition you must accept. If there aren’t but they’re in demand, then what you offer is unique and scarce, making it of more value. If your business is strictly online based, this means more competition on a global scale. Making yourself stand out may require some expert marketing skills that may take some time to implement. It’s true that competition isn’t everything but it is something. Think about where you fall into all of this within your community.
It’s common to think that a therapist charging $200 per 1 hour session provides a better service than the therapist charging $100 per hour but this is all subjective. These numbers are not indicative of anything, since everyone dictates their rate according to the factors they consider most relevant to them. There are reasons why some professionals work on a sliding scale.
If you’re just starting out, knowing what to charge becomes challenging because if you charge too little, or aim too low, people might perceive your services as not having much value. You might get more clients but that comes at the cost of more work and time. On the other hand, if you charge too much, it may be out of people’s financial means to hire you. You must understand what your price is saying about your business and the community that you’re serving. This is something worth meditating on. Try to find a good middle ground.
What kind of population do you live in? Is it affluent, middle class or lower than? Unless you work in various locations or travel for work, and unless your clients are willing to come to you, this may ba huge indicating factor of what is and isn’t a realistic rate for your work.
Another element of this is: Are you B2C (business to consumer) or B2B (business to business)? It’s normal to assume you can charge businesses more for your services than you would a single individual, and you should.
PICK A NUMBER, ANY NUMBER
You dictate your worth and your rate can be whatever you want it to be. As a business owner, it is within your right to decide for yourself. If your indecision is stifling your business or preventing you from working and acquiring clients, sometimes you just have to pick a number. Keep in mind that you reserve the right to change your rates (unless it’s stated otherwise in a contract), they don’t need to be set in stone.
Be fair and keep your rate consistent. When you’ve put some time into your business and acquired a consistent and/or larger client base, raise your rate accordingly. If you’re reluctant to do this, one approach is to keep your rates consistent for a few loyal clients while charging new customers your new rate. Always be sure to update your rates on your website, if you chose to list them.
We hope this guide has been helpful. Is there anything we missed?
Let us know in the comments below.