Professionals who charge hourly rates often get stuck when they have to tell people what they expect to get paid. It is a very sticky subject and the words can literally get stuck in your throat. The only way to get through this is to practice. A lot.
When you are starting out, or if you offer a one-off service, you will need to tell prospective clients how much they will need to pay you to get access to your valuable time and knowledge. That said, you might take your hard-won experience for granted and may question the value you can bring, especially when you are new in your business.
Many of the professionals I work with have previously worked for a consulting firm. In this case, they have an elegant way to frame their pricing and get paid what they’re worth. What they might say is, “At <consulting firm> my billable rate per hour was $300 and in my business I am currently charging between $150-$250, depending on the size and scope of the project.”
Why does this work well? You have set the bar according to a respected source that your expertise is worth $300 in the market. You also have reminded your potential buyer that you were an employee of that consulting firm, which helps bolster your credibility. You have acknowledged that as a solo professional or small business, you don’t have the overhead of a big brand and can offer some accommodation in your pricing.
If you want to charge the same price that the firm billed you at, you can do that as well. Over time, you may have the confidence to do just that.
If you haven’t been a consultant at a firm before, you might want to say how many years of experience you have, for example, “I bring 15 years of experience in accounting and am currently charging …” I do recommend including “currently” because your pricing will likely change over time. Maybe next week.
Generally, this framing will be well-received by prospective clients.
But please know that you may experience someone who says, “I don’t pay that kind of money to anyone who doesn’t have a JD or MD after their name!” That is exactly what someone said to me and I responded immediately, “Well, I guess we won’t be working together. It was nice meeting you. Good luck with your job search.”
When you are starting out, or when you have been experiencing a dry spell, you will be tempted to drop your prices, thinking that it will get you more business. That is not always the case, and generally the clients you get are bad clients who don’t respect you or your expertise, and are constantly pushing the boundaries of your time commitment and the scope of the project.
What then happens is you start to feel taken advantage of and bitter. That is not fun. At some point you might want to offer the low-budget client a partial refund so you can get away from them, or they might ask for a partial or full refund from you – even though you have over given and over delivered – because they don’t respect you.
That is a miserable situation and I don’t want it to happen to you. Stick with your pricing. You’re worth it.
Photo by Sebastian Herrmann on Unsplash
