Here's a question for you, Sharks: What should you charge for your services?
I bet you've felt yourself asking this questions at least once in your life. Charge too much and you won't be working. Charge too little… and the prospective client will look elsewhere, thinking that you couldn't be very good or your advice worth a damn.
When I first started out, I was faced with this problem for months! I had plenty experience in the marketing field, but not as a freelancer. So, the first thing you need to accept is that, in the beginning, all is not roses! And second, you need to figure out how to charge what you're worth!
So what then? What's the right price to ask for your services? The truth is, there's really no good answer to this question. But even though pricing your services can be tricky at first and I can't actually tell you how much you should charge your own clients, I hope I can help shed some light on the never-ending dilemma!
What should you charge for your services?
In the beginning, I distinctly remember how this question had me stumped. Especially because, when a prospect is going to ask you “How much?”, you better be prepared with an answer!
Often times, not knowing what to charge your clients can make you feel worthless. But that's not the right attitude for an entrepreneur looking to boost their credibility!
1. Figure out a minimum rate you could charge your clients
Depending on where you live, your standards, your needs etc., etc., the first thing you need to do is to figure out a minimum amount you could charge in a day. Or in a week. Or per hour.
Don't think of this rate as the one you'd literally charge your clients! This is merely a threshold under which you should never, ever be willing to go below.
How do you calculate this minimum rate?
Take into consideration the minimum figure you'd need to survive on, add your living costs (rent, utilities), add the costs of the equipment you'd need to make your business work (laptop, software, etc.), consider taxes and savings and voila! You should be able to figure out the bare minimum rate you should charge to stay afloat.
2. Figure out how much you would like to actually earn
Now comes the fun part: as soon as you know the minimum rate you should charge a client, try to figure out how much you would like to earn. Of course, it helps to be realistic, so start small and work your way up gradually as you grow as a business.
Be careful though, not to start too small! You wouldn't want to sell your services for pennies.
3. Figure out how to set your prices accordingly
Now that you know (roughly) how much you could charge, it's time to put a real price on all your services. For instance, you could take a guess at how long a project would take and come up with an estimate. Alternatively, you could break a bigger project in separate smaller projects and price each part individually.
The possibilities are endless! The important thing to remember is never to price yourself too low. If someone can't be bothered to pay your rates, it may be best to move on in search of a new prospect.
4. Figure out how much you're worth and stick with it!
Over the years, I've learned that, when highly recommended by another client or someone who knows me, the prospect will almost never question my fees. However, when dealing with someone who has never heard of me, my fees arouse some suspicion.
Furthermore, I've discover that, when clients want a lot of work, my impulse seems to be to lower the price. Especially for prospects who are “from Maui”. But instinct told me not to though, and I usually didn't to it. Don't you do it either!
When it's all said and done, the questioning of the fees is nothing more than a smokescreen for the questioning of your expertise. With that in mind, you could cut your fee in half at this point, and it would do no good.
Once your credentials, your expertise in their problem area, and your general experience are all established, there won't be any flak about your fees. After all, your client only wants to be assured that you can help them. So, never make the mistake of cutting your fees.
In like manner, try not to adjust your fee just because you might think your prospect is a “whale” and that you've got him cornered. A major part of the “credentials” I keep talking about is your reputation, your integrity, and the standards that you set for yourself and for your business. Keep in mind that, if you know you're an ethical person and an honest one, you will come across that way to the prospect at the very first meeting. If you know that you are a bit shady and greedy, you can be sure your prospect will know it, too.
At the end of the day, pricing is all about supply and demand. As soon as you start thinking about your services as an investment, rather than a cost for your client, you should be able to figure out the best rate to charge your prospects and make each project worth your while.