This is the question that is one of the fundamental building blocks of a successful business.
How much do you currently charge?
Does it feel right?
Is it working for you; are you gaining enough clients at that price point to make ends meet?
As you are reading this then I think it’s safe to assume that you’ve answered “no” to at least one of those questions. So here’s my 5 steps on how to fix it.
Step 1: Understanding the value you deliver
Realistically we are all in business because we solve problems for our ideal clients. What problem do you solve? How much is that worth to your ideal client?
Don’t squirm out of answering that. No matter what you do you should be able to put a price tag on the value it delivers. Even if it’s confidence that you deliver that will have a tangible impact on that person’s life so quantify it.
That tangible value must be greater than your fees.
Eg if you are a graphic designer, designing an exhibition stand, then your client will know what they want to achieve from that exhibition so therefore you can quantify it. You just need to get used to asking the right questions when they give you the brief.
Step 2: How much time will it take
I’m a huge believer in pricing the value and not the time it takes to deliver the work but you do need to check you are charging enough to cover your time.
Work out how much time it will take and multiple that with your standard hourly fee. This will become the lowest price you could possibly pitch.
Step 3: Can you reasonably make ends meet with your fees?
Whatever fee structure you settle on needs to enable you to make your desired revenue without killing yourself.
Work on the basis that only 50% of your time will realistically be available for billable work (the rest is admin and marketing) so how much do you need to charge per hour for that 50%?
Does that tally with the amount you just worked out in Step 2?
If it’s a higher amount than Step 2 you need to increase your minimum hourly fee.
Step 4: Are you confident pitching your fees?
If you go in too high with your fees you won’t be confident pitching them which will result in your losing business and it’ll significantly dent your confidence.
What level are you confident at? Start there. It’s pointless having high fees if you aren’t going to win enough work.
Step 5: It’s an evolution
Business is an evolution and that’s definitely true of your fees. As the years roll by your fees will go up as you’ll be more confident with the service you offer.
As you get clients in under your belt you can start to push your fees up towards the aspirational level you dreamt of when you first started out.
So where do I start?
You want to pitch your fees somewhere between the value you deliver and the fees you are confident with as long as that’s equal to or higher than your answer to step 2 or 3.
It doesn’t have to be complicated so keep it simple and don’t let your head talk you out of charging higher when you are ready to evolve.
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