You’ve heard it over and over, especially if you’re in the online business world… it’s a phrase that seems to feel so powerful when shouted from the rooftops (or into a podcast mic). But in reality, it’s a terrible way to think about money.
Have you guessed it yet? It’s “charge what you’re worth.”
I’m sure a lot of the business folks you look up to have used that phrase. But frankly, I really hate it. Because my value as a person is not tied to how much I charge for my services… and neither is yours!
I understand the heart and the intentions behind using this phrase. I do. But it’s still a problem. Because it ignores the fact that your products and services do exist within a market. Being smart about pricing means understanding your market and where your work falls within the business landscape. And answering those questions has NOTHING to do with your personal worth.
Instead of trying to put a dollar amount on your worth, you should be putting a dollar amount on your WORK’s worth. And, in particular, what your work is worth to your client.
The first step to figuring out what your work is worth is to survey the business landscape.
How much experience do you have and what unique qualities do you bring to your work? How does that compare to similar businesses out there?
Analyzing what others in your space are offering, and how they’re offering it, can help you assess appropriate pricing. But you don’t have to feel locked down into setting your prices based on other people… if you want to charge more, for example, identify gaps in what they’re doing and fill those in your own unique way for your ideal customer. Adding more value means adding more zeros to your proposals!
Now take a step back and assess where the value of what you’re doing translates into pricing for profit.
Does your product or service help someone make more money? How much is one client worth to them? If you’re a web designer whose work typically increases online conversions by 50% for your clients, some quick math can show you what your work is worth to them. Build that value into your pricing.
Are you helping someone create something unique, like an amazing wedding experience? Are you helping someone live a better life in which they are happier, wealthier, or healthier than they were before finding you? Does your product provide a solution for your customer that they’ve tried to figure out on their own for years?
The value you’re adding to someone’s business or life matters!
Sometimes you can put a number to it, like our web designer can, and sometimes you can’t. Either way, there’s value to what your unique abilities are bringing to your customer’s life and business. So make sure you account for that in your pricing structure.
What if you’ve done all of this and you still feel like you can’t charge what you need to for your business to make sense?
Well, first you’ll want to dig deep and make sure it’s not just fear talking. However, if you’ve studied the business landscape, calculated the value your unique skills or product bring into your customer’s life, and your work just isn’t quite there, never fear! Keep at it, but just adjust your business plan a bit. Perhaps you do need to build up a stronger portfolio of work or case studies before your work is actually worth the price you need to charge to be in your business full-time. In this case, just set the best prices you can and pick up some odd jobs or become a part-time barista until your work is worth what you need to charge to be full-time.
Sometimes you have to build up your body of work or iterate on your product a few more times before it’s worth what you want to charge.
The important thing is to be real about your work’s value and where it stacks up against others in your industry. And then put your head down, work hard, and please, for the love of all things money, don’t tie your personal worth into your work! Charge what your WORK is worth – no more, and no less.
If you liked this post, be sure to check out this other one all about the pitfalls of going from penniless to profitable. It will help make sure you don’t give into fear as you rework your pricing!