The Price is Right can lead to success

As a freelancer, one of your business tasks is to determine your pricing. It’s amazing how hard this actually turns out to be for new business owners, myself included, and how often we get this totally wrong.

When business is slow, or you’re starting up and trying to grow, my first thought was, “If I lower prices, I’ll get more business, and I’ll be able to make the money I need to survive.” This seemed pretty reasonable, at first glance. Sure, you might pick up a bunch of customers, which means working more hours (for less money!) and still not making enough. How did I go wrong?

The Price Is Right

Pricing yourself right isn’t necessarily figuring out the lowest price you need to offer to get the most customers. Matter of fact, as a whole we’re pretty awful at judging the value of things: so much so, that a whole game show was created around this fact that has run successfully since the 1950s!

Sometimes, pricing yourself too low will only cause your downward spiral into failure. The challenge is to identify just the right price that will allow your business to thrive, and that can mean setting it much higher than you thought was appropriate and higher than you’re probably comfortable with.

Juli Monroe at 1to1discovery.com tells a story about how setting the right rate by raising your prices could actually lead to the path of business success. (Full disclosure: I may have been the client she spoke to a few days ago. Maybe. 🙂 )

Do you own your own business, or do freelancing work? How did you set your rates? Did you struggle like I am in the beginning? How did you overcome this and get to the right rate — or, are you still struggling? Share your story with me in the comments!

Comments

  1. When I started my coaching business, I researched average pricing for coaching and set my rate at the low end for a business coach. I figured with my lack of experience at the time, a lower rate was appropriate.

    No complaints. I did pretty well at that rate, but after a year, my coach challenged me to both change my rate and reduce the number of hours a month I worked with individual clients. (I’d been meeting 4 times a month, and I knocked it back for everyone to 3 times per month. Now it’s mostly 2.)

    I raised my rate from $100/hour to $125. It’s still a very reasonable rate for coaching services. I just read a blog post from someone who charges $250/hour, so I guess I have room to grow it again if I want.

    • Dossy, Juli – I struggle with this, mostly because I do not freelance full time – I do it whenever an old client needs me – and I get a call. However, one certain ond client seems to recommend me to colleagues, friends, and family – and I have no clue what to charge.

      Someone in my position, with my experience is worth – on the full time freelance market, between 90 and 150 dollars an hour, and more for specialty work, but generally for this one ex-client, I tend to charge him what I used to almost 5 years ago – $50-$75 an hour.

      The fact that I do not freelance full time makes it harder, but as a full time employee and a single parent, my time is worth more than what I have been charging, but I am afraid to insult my ex-client and his friends and family by charging more than I charge him.

      One wonders whether I should bother – but I always can use the extra money – to go on vacation, or buy my son something really nice – or to just fix things around the apartment…

      So yes, I struggle with this too.

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