Do you think you’re undercharging but you are afraid of increasing your rates because you think that your clients won’t be able to afford you? You are not alone in facing this dilemma. And the problem is with the mindset, according to this article in Inc.com.
Most of the entrepreneurs facing this difficulty are underpaid because one, they don’t realize their full potential, and two, they underestimate the paying abilities of their clients.
To be fair, we should be paid for the value we bring to the table. You have the experience, you have the knowledge, and you have access to the tools to execute the project magnificently. You should be paid accordingly. If your clients cannot afford you, then maybe you are targeting wrong clients. And if you think your clients can pay you more but still they’re not eager to, maybe your services are not up to the mark, and you have to work more in that area.
Everybody wants to get a good deal. Nobody wants to pay you more than they can get away with. No matter what excellent services you provide, if they can pay you less, they will certainly pay you less. So in order to charge what you want to charge, you need to find out whether someone can replace you are not. This doesn’t necessarily have to depend on your talent or your abilities, it depends on many factors. But the moot point is, can you be easily replaced? If you cannot be replaced, you can charge more.
After this, can your client do without your service? If yes, again, maybe you’re not targeting the right clients. If no, then you can insist you be paid more.
I don’t mean to say that you charge unfairly. In every field, at every level there are market rates. The sort of services you provide, the sort of expertise and experience you bring in, command a price accordingly. It depends on your track record. There are lawyers people don’t want to hire, and there are lawyers who charge more than $100,000 for every appearance and people still want to pay them. They know what is at stake.
How to charge what you deserve
- Calculate all the expenses you incur: As an independent entrepreneur most of the resources you use are your own, most probably. The office space, the computers, the software, the communication equipment, the traveling, research, electricity, and other sundry expenses, everything goes from your pocket. You should add that to the cost of the project while preparing the quotation.
- Get a sense of value you provide: How well do you make an impact? Once you have delivered the project, how does it perform? Are your clients happy? Are they eager to vouch for you? How much is your best client eager to pay you for your services?
- Calculate the premium for your uniqueness: Businesses don’t hire people, they hire the service. How much are they ready to pay for the uniqueness you can deliver? You will have to do some research. In your realm, how do normally people work? What do they do to get more work and perform better? How much do they get paid? Is this something you like about them that you would also like to introduce in your own service?
- Excel in your field: This is the best way of charging what you deserve. When you have made a name for yourself, when you have a reputation, people are most eager to pay you what you ask for.
- Network all the time: The more people know you, the better are your prospects. When you limit yourself to just a few clients, they are in a better position to decide your rates. On the other hand, if you know more people, if you have more clients, and if you are being approached by new clients all the time, you have more choice. You can risk a few clients in favor of those who want to pay you what you really deserve.