Working For What You're Worth vs. Just Working
As a long-time veteran in operating a business, I have been asked by numerous individuals who are just starting out the age-old question, "How much should I
As a long-time veteran in operating a business, I have been asked by numerous individuals who are just starting out the age-old question, "How much should I charge?" I never have a simple answer, as there is none.
I cannot magically pick a number out of thin air to tell an individual a specific dollar amount of what they should charge. There are many factors that determine the value of one's services. I usually respond to the question with a question, "How much are you worth?"
Several years ago, I was offered a position in a busy law firm where I had once served as a temp on a one-month stint to assist them in getting caught up with their work. A few months had passed when I ran into one of the partners in the firm who was looking for a secretary.
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He approached me about a full-time job opportunity as his paralegal. I had been working on my own for a few years at the time and was not really interested in getting back into the "9-5" office routine, but I never close the doors to any opportunity until I fully investigate it. I agreed to meet with him the following week and discuss salary and benefits, as well as what the job would entail.
During the meeting, he asked me how much it would take to get me to sign on with his firm. At the time, I knew that I would not accept the position for any less than $15.00 per hour. When I confidently tossed out this figure, the look on his face was definitely a Kodak moment! After quickly gaining his composure, his response was one I will never forget.
He said to me, "Personally, I think you are worth $30.00 per hour, but I am only authorized to offer you between $7.50 and $8.00 per hour." At that moment, I knew that the door of opportunity was closed- this time for him, not me. As I left his office, I must have smiled all the way home.
This lawyer's comment to me made a profound impact on the future of my business. It was then that I really began to assess my skills, abilities, experience, training, and discover the worth of my services.
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Certainly, if you offer products, you must price your products by factoring in cost of materials, production, overhead, and other expenses. When you are selling services, it may not be quite as simple.
Therefore, in addition to factoring in overhead and other expenses related to your business, you must be able to place a value on the specific services you offer. The following factors should be considered in establishing your worth:
1. EXPERIENCE. How long have you been doing what you do? An individual who has gained five years of experience as a consultant would certainly be expected to charge more than an individual just starting out in the field.
2. EDUCATION/CREDENTIALS. How extensive is your educational background? Are you designated as an expert in your chosen field? Do you hold any specific credentials or certifications?
Again, the individual who has worked to attain a formal education and/or credentials that hold him/her out as an expert would be more valuable to his/her clientele.
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3 . DEMAND. Are you in demand by your clientele? Do you have a following of satisfied clients? Do you consistently generate new clientele? Do your existing clients frequently refer new clients to you?
My best advice to anyone seeking to establish a pricing structure to his or her services is to do your research. Visit businesses on the Internet that offer services similar to yours.
Many contain pricing information. Gain a better understanding of what services these individuals are offering and how much they are charging for them. Next, take inventory of the services you are offering. Write down them down on paper and include how much you are currently charg
ing. Subtract your overhead and other expenses related to your services. Remember, these costs come right off the top before you make any profit. How much are you actually generating in profits off of your services?
Is it enough to cover what you are worth? If not, evaluate all the factors discussed above in determining your worth and decide where you fit in.
There are many entrepreneurs who are working for much less than they are worth because they feel their potential clients will not pay higher prices.
There are others who can testify to the fact that by establishing prices based on their worth they have been able to become more successful, generate more profit, and gain a loyal following of clients who expect to pay for professional and quality services. Stop working just to be working. Working for what you worth are far more rewarding in establishing the level of success you want to achieve!