Knowing what to charge for your product or service has to be one of the most challenging responsibilities of working for yourself. When it comes to creativity in an industry where working for free is often expected, seen as something you should be grateful for, charging what you are worth is the bane of the creative entrepreneur. It is no secret that so many of us undercharge in the mistaken belief that we are not worthy of charging high prices. We fear that being expensive means we will not get clients.
Charging what I am worth is something that I have struggled with as a freelancer and as an entrepreneur. I would work out the figure that I needed but as time progressed I let the demoralising (you’re too expensive!) responses of potential clients create and fuel my doubts. So much so that I ended up chipping away at the figure until I was practically giving away my services. At the end of the day, I was the one who ended up suffering.
I have since made my way back to charging what I am worth, setting prices that reflect the skills, knowledge and expertise I have picked up over many years. Confidence in my ability that has come with age, and the skills I have learnt and refined means that I can stand firm. To not be afraid to ask for what I know I deserve. To illustrate I have a client who I was undercharging and although I knew that I had to do something about it, I didn’t because I was afraid of losing them. Having worked with them for a couple of years I knew I had to do it even if it meant having to walk away. I looked at my options, worked out a plan to gradually increase my prices in stages. I then let them know that my prices had increased. To my relief, they accepted without resistance, and what I learnt from this was that:
1. My skills and knowledge are of value to them; and
2. They were well aware that I was undercharging!
Charging what you are worth is not about setting the highest price you can get away with. It is about recognising where you sit you sit in your market, and accessing the prices the market typically supports for those with similar offers.
Charging what you are worth is not about setting the highest price you can get away with. It is about recognising where you sit you sit in your market, and accessing the prices the market typically supports for those with similar offers. – Tapiwa Matsinde
If you are struggling with charging what you are worth here are three things that can help you set prices that reflect the value what you have to offer:
1. Understand the value you offer
Recognise the skills and knowledge you have that others will pay for. Have you invested in yourself by taking several specialist courses, or have you taught yourself by sacrificing many weekends, or do you work in a niche where you have positioned yourself as an authority with your thought-leadership content. All these things have value, and the more in demand that value is the more your audience will be willing to pay. Your mindset and words you use towards thinking and speaking about money play a huge part in how you feel about it. And in turn, affect your expectations of what you believe you deserve to charge
2. Know who you are selling to, and what the market will bear
Charging corporation prices for a start-up audience is unlikely to get any takers for your service. And in certain sectors such as luxury, low prices turn customers away. Also what prices are your peers at a similar level to you offering? Are there commonalities in the prices? If so this is a good benchmark for what you should be charging. Knowing your market is why market research is so important for business development. Because if you don’t know your audience, their needs, and the expectations of your market how can you give them what they expect.
3. Track your time and production costs
Do you need to charge hourly, weekly, per project, or per delegate. In the early days, you are likely to make mistakes in your prices and will spend some time adjusting until you find what suits. The same goes for any costs of materials or help needed to create your product or services.
What you charge is not fixed. The prices will change due to factors such as inflation, suppliers putting up their prices, the financial cost of improving your skill sets and expertise. By not charging what you are worth, you are doing yourself a disservice. Because doing work, or trying to sell something you know is worth much more leads to resentment towards your customers. Not mention burnout as you take on more than you should to make ends meet.
Do you find charging what you are worth difficult? What are you doing about it? I would love to know in the comments.