I started my career in the creative service industry 20+ years ago, and I’ve heard everyone from freelancers to agency owners sigh about the same things over and over:
“I should just get a job somewhere because my income can’t cover my living costs”
“I feel like I’m on a hamster wheel and burning out.”
“We have a good portfolio, but we always seem to attract clients who aren’t right for us.”
But, inevitably, when I asked, “Do you feel you should have charged more?” — the answer was always a resounding, “YES!”
What makes us charge less than we should?
1. Imposter syndrome
Simply put, we think we are just not good enough. We question our competence and charging less seems like the right thing to do. Sometimes we think we’re not as “legit” just because we’re going solo or running a small firm.
2. We believe we can limit the effort
The classic “let’s work around the client’s budget”. I have written countless statements of work, thinking through every detail imaginable, in hopes of controlling the scope and output. But because so much of the work is often in the thinking, it’s very difficult to limit scope when it comes to ideation and creativity. So what happens? We charge 50% and deliver 100%.
3. We plan around the best case scenario
Nothing ever goes according to plan. Ever. Materials will arrive late, extra revision requests will come in, more meetings will be needed to get consensus…you know, all those things that don’t even surprise us when they happen. And they always happen. It’s natural to feel overly optimistic and excited to take on something new while overlooking reality.
4. We are afraid of losing the opportunity
We try to stay competitive in order to win the work. We worry about lost income and wonder when the next opportunity will come through.
Or, we feel like it’s hard to justify our seemingly “high price” when clients push back, which can then lead down a dangerous path explained in point #2 above — limiting the effort.
Or, we come across a dream project that we really, really want, and the next thing you know, we priced way too low.
5. We don’t charge based on value
My financial advisor charges me $5,000 for a consultation.
Do I care how many hours she spends reviewing my financials, talking to me and drawing up the personalized plan? Nope.
What I do care about is how much money she helps me save or make when I follow her advice.
Very often we only price our work based on our “costs” to produce it without considering the value we bring. Value can be time, money, opportunity cost, mitigated risk or even reputation, but your operating cost is not part of that value.
Why is it important to charge what you are worth? Hint: It’s not about having more in your bank account.
If you don’t charge enough, you are doing a disservice not only to yourself, but also to your client.
1. You become more focused and efficient
Juggling multiple projects all day long decreases your efficiency. When you charge more, you can reduce your cognitive load and cut down on constant context switching.
Since there’s a “base cost” associated with every project no matter the price you charge, the fewer projects you run at the same time, the better off you are, financially and emotionally.
2. You can delegate
When you charge enough, you can delegate. You won’t have to do everything yourself, because you can afford to pay someone else to take things off your plate that aren’t the best use of your time.
3. You can win better clients and projects
Clients who don’t want to pay your price or appreciate your value are typically more difficult to work with.
I have come across quite a handful of challenging clients when I ran BeansBox, and they all had one thing in common: they did not pay the price we would normally charge, but we ended up working with them anyway for one or more of the five reasons mentioned above.
A higher price almost always guarantees better clients. Someone who is willing to pay what you are worth values your ideas and expertise. They focus on the results and want to set you up for success.
4. You can do your best work
When you charge appropriately, you have the space to do your best work. You can delegate, increase efficiency by running fewer projects, and free up time to provide your client with the attention and care they deserve.
Doing your best work builds trust between you and your client, and that’s really the only currency that matters in the long run.
There is absolutely NOTHING wrong with making a profit doing what you enjoy. If you are providing a service as a professional and making a profit while you’re at it, then you are doing exactly what a healthy business should be doing.
All it takes is the first step — charge more, and your clients will thank you for that.
(This article was originally published on LinkedIn on November 6, 2020)