When you go out on your own, one of the first challenges is working out what to charge for your work. Sounds easy, right? Think again. Do you charge by the hour, the project, the month, or the day? And do you charge what you want to earn, or what people will pay — or what you’re worth? And what’s the difference?
Working out your worth is a tricky business, and one that requires research around the marketplace regarding what and how people are used to paying and what consultants are charging. In conjunction with this is the trickiest piece of the puzzle — determining the value you will provide to your clients.
Most professional services charge by the hour — consistent marks of time roughly multiplied by the amount of work that needs to be done. However, is one hour of selling on the phone the same value as one hour of facilitating a strategy? Just change the rate, right? If so, then how much, when, and for how long?
The other, and perhaps harder, thing to do is to put a dollar value to your skills; being confident enough to say, “Yes, I’m worth that amount of money because of the value my business delivers to clients.” Over time this gets easier. These decisions are often wrapped up in reputation, demonstrated results, experience, and sheer chutzpah to put it out there — and then stick to it.
I’ve dealt with consultants who have “rack rates” but then crumble under pressure, and significantly reduce their costs. This damages your personal brand and can have long-term implications for future work. The same can be said for those negotiating salaries.
Then there is the perceived value linked to cost; cheaper is not always better, and some clients will pay more if feel they will get a better product.
I’ve determined my rates through thinking about all this and more. But learning to back myself and be confident in what I’m worth has been the greatest outcome of all.
So when you’re trying to determine how much to charge, always remember to ask yourself: What are you worth?
This story originally appeared at PCMA