Deciding how to correctly price a project or where to set your hourly rate can be a challenge for independent consultants. And charging what you’re truly worth can be a struggle for many. Sometimes consultants can fall into a rut of undervaluing their work and even worse, feeling apologetic or reticent to ask their full rate. As a consultant, your fees reflect your years of experience, talents and knowledge – all of which brings value to a client.
Charging what you’re worth isn’t just about the nitty-gritty details of determining your hourly rate. Our beliefs and attitudes about money are also at play, which can sometimes have an overriding impact on our approach to cost estimating a project. Often it’s our mindset – and psychological roadblocks – that hamper us the most when it comes to earning the money we deserve, as well as being able to embrace that and feel comfortable with it. Money and success are powerful constructs, and they can bring up deep-seated issues, insecurities and genuine fears that need to be faced and managed if we want to reach our monetary potential. Being able to handle success – and all that entails – is as necessary as doing the actual work itself.
The self-confidence to remain resolute in your pricing and negotiate effectively when it comes to drawing up the contract with a prospective client is paramount for a thriving, sustainable business. Concurrent with having the self-assuredness to assert your worth, it’s equally important to be able to accurately appraise your level of experience – and expertise – and what that commands on the open market.
Key points to consider
- Know your market – This includes not only thoroughly understanding your target sectors but also understanding the region(s) in which you operate and conducting a competitive analysis of other consultants offering similar (and dissimilar) services.
- Understand the influence of price on the clients you attract – Your valuation of your services – and overall worth as a consultant – can impact the quality of clients you end up attracting. Sometimes we are disillusioned about whether we can find the caliber of clients who would be willing to pay what we consider to be a premium rate. However, if we charge a lower hourly rate than what is congruent with our years of experience, we are likely to draw prospects to us who are more focused on budget – and penny pinching – and prone to undervalue the work that we end up doing for them. Clients who don’t pay as well also tend to require more handholding and management, which ends up depleting your time and energy even further – making it not worth it in the end.
- Set professional boundaries – It’s important to know your limits and what you will say “no” to as far as requests from clients or prospects, especially when it comes to rates and fees. It’s about drawing your line in the sand in terms of how you operate your business (e.g., whether or not you’ll entertain negotiating payment terms, rate reductions, etc.). The boundaries you establish set the tone of the working relationship and communicate your sense of self-respect.
- Appreciate the impact on your brand and morale – Properly (and fairly) valuating your work can also affect your overall brand and the image it conveys (e.g., highly specialized niche firm providing premium service in a particular area vs. simply a freelance writing business). Your company’s value – as perceived by yourself and others – inevitably also affects your own self-image and morale over the long-term).
Questions to ask yourself
- What is your competitive advantage? What sets you apart from your competitors (e.g., spectrum of services offered, highly specialized expertise in a narrow niche area, etc.)?
- What type of quantifiable results are you capable of providing to clients in your service area(s)?
- Are you targeting the right sectors where clients are willing to pay the rates you desire?
- Have you made efforts to position yourself as a thought leader (and respected expert) in your area(s) of specialization? This includes blogging (e.g., on your own website, LinkedIn, guest blog posts on others’ sites, etc.), public speaking at industry events, as well as doing podcasts and webinars.
- How are you managing your brand – and reputation – within the marketplace, including online?
- Are you conveying an air of confidence and decisiveness in your client negotiations?
- How are you coming across both from a personal standpoint and as a brand?
As solopreneurs, it’s incumbent upon us to power through any anxieties we may have or superfluous negative self-talk in order to grow, thrive and make the money we rightfully deserve. We need to dig deep and shore up the personal strength and courage to recognize our worth and claim it.
Image courtesy of Free Digital Photos | ponsulak