For the last few years, I’ve been coaching entrepreneurs. I’ve helped an illustrator who wants to illustrate live events, one of the world’s top UFC trainers who is rebranding and a developer who builds builds.
Though their businesses are all different, there is one thing everyone I work with tends to have in common. One mistake that almost all of them make.
What is it?
They undercharge.
Almost every entrepreneur I’ve ever worked with did not charge enough for their services or their products.
The problem is that often what we are offering comes somewhat naturally to us. My friend the illustrator took a long time to become an expert, but now it comes kind of easily. So of course he shouldn’t charge a fair rate for something that comes so easily. But he should, that’s if he wants to maintain a business for years and years.
If you are selling something right now, I guarantee you are not charging enough for it. How do you change that? Here are 5 easy ways.
1. Ask a friend if you are charging enough. Get an outside voice to review your prices. And when they tell you the truth, listen and act on it.
2. Ask the client what their budget is. This one isn’t something I’d always recommend but if you’re grossly undercharging, here’s what’s going to happen. You were going to design something for $500. But first you asked the client what their budget was. In some situations, the client is going to say, “Our budget is $750.” At which point you will say, “Awesome” and enjoy an automatic $250 raise before the project even started.
3. Remember why you are charging money. Don’t feel guilty for charging for a service. This isn’t a hobby, this is your livelihood. Would you rather disappoint your family with your ability to pay the bills this month or disappoint a client?
4. Test your prices. Where does it say you can’t run a few experiments with what you charge? You don’t have to raise them all at once or for every client. Start small and be smart.
5. Be honest about your hourly rate. If you’re spending 50 hours on a project for a client and charging $300 you’re making less than minimum wage. If you’re charging double or triple that, you’re still not earning enough. The problem is that you enjoy what you are doing. In most cases you did it for free for years before you started your business. Those years are over. Charge the right rate!
Those are five things I’ve done in the past to get my coaching rate where it needs to be. Do I think you should jack up your prices out of the blue? Nope. But good work should cost good money.
If you’re doing it, charge for it.
Question:
Have you ever undercharged for what you do?