“What should I charge for my work?”
For freelancers, this is the million dollar question. It’s also the most-confusing question. But if you can figure out the answer, you can actually make a living (and a really good one) working for yourself.
And when I was finally able to answer this question for myself and raise my rates, I ended up earning $12,605 more for doing the same work.
The good news? You can do the same. Here’s how to figure out what your work is worth and raise your rates in just three hours of work spread over a couple of weeks.
From Undercharging to Raising My Rates
In my first year as an entrepreneur, I watched myself underprice my work over and over again. I knew I could be charging more, but I wasn’t. But I didn’t know how to stop low-balling myself.
So I went on a mission to figure out why I kept undercharging. I started digging into articles, research and the psychology around pricing and money. And as I dug deeper, I realized there was a major concern buried in the freelance pricing question:
“What should I charge for this… so I can avoid rejection?”
Wow. That explained why I kept undercharging myself. Packed in that one little question about price was a lot of self-doubt and insecurity around avoiding “no’s” from clients and feeling like a failure.
It was a heavy realization. But once I knew the emotions behind my question of what to charge, I knew I could change how I approached it. Now it wasn’t just about raising my rates. I wanted to raise my rates with confidence. And I wanted to change what my work was worth.
So I came up with a process and a formula that helped me double my rates and earn $12,000 more last year. And it’s not hard to fit it into your busy schedule — the process only takes about three hours total, spread out over a few weeks.
How to Start Charging What Your Work Is Worth
It’s time your rates reflect the true value of your services.
1. Calculate Your Work’s True Value: 1 Hour
Google what to charge for a project will give you some ideas, but it will never share an accurate estimate of what your work is worth.
So what does your value depend on? Here’s the value formula I came up with to price my own work and to help other entrepreneurs do the same:
Your work’s value =
Your unique skills (A) and experience (B) +
Your client seeing, wanting and being willing to invest in (A) & (B)
Your unique skills and experience: The combination of your skills and experience is something no one else can bring to the table. It’s totally unique to you, which is why you can’t look to anyone else to put a price on what you offer.
Ask yourself: If you were in a room with your “competition,” what would make you instantly more valuable than that other person? What value do you bring to the table beyond the service you’re providing? When you take the time to articulate this piece of your value, it’s easy for others to see it too.
Your client seeing and wanting your unique skills and experience: Your next job is to narrow down the type of clients you want to work with, the “golden client” who really wants what you’ve got. Be specific — maybe you’re a chef who cooks for new moms who don’t have time to cook for themselves, or maybe you’re a copywriter who helps entrepreneurs write amazing Kickstarter pages.
When you can identify those ideal clients, you can better figure out how to find them and how to show them your true value, because you know what they really want — to have a week’s worth of meals ready to pop in the oven, or to get their crowdfunding campaign to its goal.
Your client’s willingness to invest in your unique skills and experience: This is where the rubber hits the road. The last step is helping your client feel that you’re worth an investment. You and your client should feel so confident in your value that the financial investment isn’t even a question.
A willing client is one who has probably paid for this service (or a similar service) in the past. Be ready to articulate the return on the client’s investment — have a plan to explain what they’ll get by working with you.
This formula helps me calculate my work’s value and remember that it’s tied to what I have to offer and how I present my services, not what others are charging. But more importantly, the formula helps me decide what to charge. Pricing your work is both an art and a science. But if you understand the value of your work, it’s easier to price your services.
Spend an hour working through all the pieces of this value formula to help you come up with a list of all the skills and experience you bring to the table and create a plan to get the right clients to see, want and invest in what you do.
2. Revise Your Pitch: 1 Hour
Are your clients 100% clear on the value you’re offering? Do they know what they’ll get out of working with you? Do they recognize and value the unique combination of skills, experience and perspective that you bring to the table?
Take a look at your “hire me” page, the proposal or pitch you send potential clients, or even the words you use when you meet a prospect in person. Does it fully reflect your value formula?
Spend an hour hour reviewing how you pitch yourself. Better yet, ask three friends to read over your language and make suggestions for edits. You want your clients to be crystal clear on what you’re offering, and it helps to have an outsider’s perspective. Experiment, edit and tweak your pitch until it showcases your work’s value to your ideal client.
3. Gather 3 Strong Testimonials: 1 Hour
Ask a few clients for written or video testimonials describing your work and how you helped them. Showcase these testimonials on your website or share with prospective clients to demonstrate the value of your work.
In addition, they’re great confidence boosters, and can be fantastic reminders that what you offer is valued by others.
Raise Your Rates
After you’ve done all that work, there’s only one thing left to do: Put your plan into action.
Push yourself to set a rate that’s a little higher than normal with your next client. Let your existing clients know you’re increasing your prices.
By doing the exercises above, I felt so much more confident telling my existing clients I was raising my rates and pitching a higher rate to new ones. I understood — finally — what my work was worth, and I started charging it.
Remember, you’re the only one in charge of what you charge. Take just a few hours today to make sure you’re charging what your work is worth.
Your Turn: If you’ve successfully raised your rates as a freelancer, how did you do it?
Stephanie Halligan is the make-more-money creator and coach at You Deserve More, a 7-day course to help entrepreneurs charge what they’re worth. Get her free 6-lesson mini course and free scripts for raising your rates at YouDeserveMore.co
The post Are You Undercharging for Your Freelance Work? Here’s How to Raise Your Rates appeared first on The Penny Hoarder.
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