Do you have a hard time figuring out how much to charge for your services? Most freelancers and entrepreneurs have a difficult time deciding how much their time is worth and whether they are charging enough for their services. Charging what you are worth is not easy, especially when you are relatively new to any industry. The pricing wars that revolve around services and products may very likely have affected your perception of price and could even be causing you to charge below the market price.
Here are two approaches on how you can handle the pricing wars and charge your worth.
1. Calculate Your Business Expenses
One approach to help you determine if you are pricing your services right is being aware of your income and lifestyle goals. How much does your business need to grow and give you the lifestyle you want? Being realistic about your business revenue goals is important in this regard. Determine your business expenses, taxes, and personal expenses and be clear about this figure and see if you are charging enough to cover this amount.
If you feel that you are not charging enough, then you need to ask yourself how you can add more value to your services in order to charge more. Never fall into the trap of charging more just because you need to maintain a particular lifestyle. In some cases, you may need to create a marketing plan to see more of your services while keeping your price constant. However you decide to slice it, make sure you are offering value to your clients, which should make you feel comfortable to stand behind whatever price you put on your services.
2. The ROI Pricing Model
Another approach to setting prices is using a pricing model that is based on return on investment (ROI) or finding your own level in the marketplace. By this, I mean being able to strike a balance that works for you and your clients. If you aspire too high an income, you risk dealing with few clients because of your cost. Too low an income and you attract loser clients. Too many clients and median income and you get over worked. The trick is to balance price, delivery, and communicating your value to fair minded clients.
If you can save your client $1,000 by investing $300, even if it only takes an hour to get the job done, then you have a deal. However, this model, all too often, does not have a guaranteed ROI, and in most cases, the ROI is harder to measure. At the end of the day however, if you truly believe in your services and the value you bring to people’s lives, then you should feel confident charging the appropriate amount.
As freelancers and entrepreneurs, we sometimes doubt our self worth and this is easily reflected in our business pricing. Have confidence in your self worth and clients will be willing to pay you for it.