Stop Talking Down Your Rates: Lessons from an Entrepreneur
As an entrepreneur, the concept of setting your rate and sticking to it can be an endless personal battle. For me, I don’t know if it’s imposter syndrome, efforts to be accommodating, or just having empathy for my clients, but I have talked myself down on my own rate numerous times, which can be disappointing and frustrating. Here are some tips to keep in mind when you’re setting your price:
1. When you are given a budget, compensate yourself fairly within that budget
Last year, I had a client that offered me $15,000 for 3 months worth of work. They asked for my hourly rate- no problem, I was used to this. So I thought: Okay, I have 20 hours available a week to work on the project. I did a quick formula, and I had come up with $50 an hour.
I ended up getting things done in less than 20 hours a week, and I didn’t account for that in my rate. I delivered a quality product and finished with less money than I could’ve made. I left a good $6000 on the table because I only set my hourly rate at $50. Do you see where I’m going here?
If you’re able to deliver quality work quickly, your premium should be higher. You are, quite literally, talking down your worth if you overestimate your hours (and don’t compensate yourself for it!). Your clients are willing to work with you. Don’t settle for less trying to be modest, which brings me to my next point:
2. Don’t feel bad about what you’re charging
Clients know that you aren’t working for free- so why feel uncomfortable about charging them? Serious clients know what professionals charge. These clients take price points seriously.
For a different project, a client asked that I help them out for a certain amount of hours a month. Because it was a non-profit organization, I decided to give them some wiggle room (I always provide non-profits with wiggle room). I definitely believe in giving back, so instead of settling on my usual hourly rate, I charged nearly $20 lower and made sure I fulfilled my end of the contract.
Don’t have sympathy for people that can pay you! I know that’s really hard for some people to adopt- especially empaths. For me, a lot of times I really want to work things out, and I see the project as a great opportunity to help my region or my community. I come from the non-profit space, so most of my work relates to showing empathy to others. However, you have to remember you are delivering goods or services to people and you deserve to be paid fairly for your work, no matter the situation. Advocate for yourself!
3. Believe in the project and the product you are offering
This one is huge. You have to believe in the service that you provide for people. You really have to reflect on what you’ve done in the past and how it compares to the present.
I have to continually think about what I’m going to be providing and how I’m going to get things done. Personally, whenever I do projects, it’s never just me on the project. Like many entrepreneurs, I have tons of contractors that I work with for every single contract I work on. I’m constantly hiring people for specific jobs, overseeing their work, project managing, getting feedback- all of that is a lot for one person to handle.
When clients hire me, they don’t just get me: most of the time, they get me and someone else but at my rate. You really have to think of yourself as a packaged deal. What is the client getting with you?
4. Prioritize your work in a way that economically makes sense
Remember that you have to make enough money to sustain yourself. Take account of what your contracts are, how much time you spend on them, and how much you are getting in return.
Sometimes, there will be contracts that don’t pay you enough for the time that you put in. You will spend extra time asking questions; get emotionally connected to the work; you will try and try again to deliver what they want, sometimes to no avail. Conversely, you may have contracts that pay you at such a premium, for less hours. Prioritize your energy and your wins. Also think about what makes financial sense.
Make sure your work economically makes sense with your lifestyle. As much as we would like to purely follow our passions, we have to also be financially self-sufficient. If this work is going to take too much of my energy, put me in a position where I am always defending my choices, and the rate isn’t going to make sense…..then naw. I’ve had contracts that do that. And when that has happened, i looked back on the initial conversations about the budget, and said to myself, I should have gone with my gut. I knew this wasn’t going to be worth my time, and I didn’t listen to myself.
Setting your rate is a very personal and complex process. Just remember that there is nothing wrong with staying true to the value that you bring to a client.
If you ever want to chat about any of this, reach out to me!