Such a good question and something I have been thinking about lots! Recently a prospective client noted with surprise that I have doubled my prices and I was like HELL YEAH and I own it, baby. Before I even get started, I want to say that I learned most of what I know about thinking about money constructively from Denise Duffield-Thomas – like me she is a feminist at heart with a working class background and I love her down to earth yet shiny approach. Her perspectives on business, self-esteem and money have helped me so much in finding a way to make my business sustainable and abundant. Here is what has worked for me and what I share with my clients who are at different stages on their path:
When you are just starting out
There are several things you can do when you are trying to find your first price points and I would always recommend to look at this from different perspectives to make sure you get a holistic view. Of course you want to build your portfolio, get your first testimonials and gain experience, but you probably also want to pay the bills. When I started as a freelancer seven years ago, I offered my services for very low rates on platforms like elance.com where I had to compete with thousands of others – not ideal to say the least. I wasn`t clear on who my perfect client was, so I was kind of standing on my tip toes for eight hours straight to stand out in a sea of people. Please don`t do that! Instead I would recommend to get clear on the value you have to offer and then to approach your ideal clients with honesty and enthusiasm. Tell them you´re the new kid on the blog but that you know your shit and would love to prove it! I designed my first professional website for 85 GP (crazy, I know, it was this one here if you`re interested and it was totally worth the experience) and while I had created many others for friends before, it felt really great to finally make a start.
Here are a few good questions and methods for newbies:
- Research what others in your area are charging and think about the value you could add on top of their packages
- Think about how much you would ideally like to earn as an employee (say 24k a year) and then break that down to month before you consider how much of your time you can actually bill. So say you want to earn 2k a month, but with admin, customer care and marketing you will only be able to charge for 50% of your working hours. If you work 20 days a month, you would need to charge a 100 quit a day – but remember you are only charging for 50% of your days, so to get to 2k a month you actually need to charge your clients 200 quit a day. These figures are really just examples, but its a good place to start.
- Ask yourself how much time you are saving your client, how much value you are creating for their business and how much fun it is to work with you (priceless I bet) and remember that it has to feel good on both sites.
When its time to increase your prices, but you´re not sure how
If you are running a business its very likely that you are putting a lot of time and energy in your development, you are probably investing in your business and you are most definitely gaining experiences that are making your services and products even better every month. And while this might not be a big priority at the very start, you will eventually want to build some long-term stability for yourself. But when to raise, how much and how do you communicate it? I really love Denise`s blog post on signs that point towards a well-deserved raise: When you´re getting booked out, when potential clients are surprised about how cheap you are, when you are attracting painful clients, when you are consistently creating amazing results or simply when you want to. Because you know, its your business.
I always sit with a new price point for a while, see how it feels and don`t push it before I am really ready. The true story is that my prices are still at the lower end of the spectrum of my industry, but that`s okay for me right now and I am making steps towards goals that feel good to me every week. I am also aware of how our relationship to pricing is related to our upbringing, background and our self-esteem which I think is really valuable to reflect on.
I am attracting clients that I truly love which is great and a major priority, so I know I am going in the right direction, at least most of the time. I wish I had been more open upfront about my increases – they were tiny steps in the beginning, but I kind of did them quietly. It felt sleazy to me to email my list and say “hey guys, prices are going up, book now before they do” – but actually, maybe some people would have appreciated that. Ultimately I think being authentic is what matters most here.
When you think you should charge more, but it kinda feels icky
I totally get that one! For me personally, it was so important to understand what exactly is stopping me – namely outpricing friends I really love and want to support. Not everyone I know who needs a website or a digital strategy is able to put my asking price on the table and for a while, that really blocked me. But on the other hand there are countless people out there who are ready to invest and really value my expertise. I solved this tension by developing an online course that I can offer to friends who can`t afford to pay for free and I am also occasionally offering my services on a pay what you can basis.
My final words: Know your worth, darling. Charge what makes you feel comfortable, be open and authentic and believe in your work and your vision. Don`t burn yourself out because you want to be everything to everyone.