Pricing questions are often one of those things I see most often within the freelancing and small business communities – especially amongst female founders. As one myself, I have definitely struggled with pricing myself & my services, raising my prices and gaining confidence in general around talking about them or what they were in general. So I really wanted to take the opportunity to share some tips on how to gain confidence with your pricing as a freelancer or small business owners. Personally, I know these have helped me but I also want to be transparrent and say I’m still not 100% perfect and 100% confident all the time – but I am way more confident then when I started.
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1. Know your numbers
The biggest step in gaining confidence with your pricing is by knowing your numbers! Don’t just pick a price out of thin air and hope for the best – that lacks knowledge, strategy & hurts you long term. As a freelancer / business owner ( & human), you need to make money in order to survive. When I say numbers, I mean as many numbers as you can figure out and know. That includes your hourly rate, how many hours a project takes, how many client communication hours are needed, how much are your cost of goods sold, your business expenses, your living expenses, your employee expenses, how many clients you need, your overhead expenses, your ingredient expenses, your taxes, etc. The more you know, the better informed you are about what you need to make and charge for your services.
As a side note to confidence building, knowing your numbers also ensures that you are actually making money from what you’re doing rather than losing. For example: You sell cookies and you charge $1.50/each ‘because you felt that was a good price’. But your ingredients & overhead expenses cost you $1.60 per cookie. You are losing money. Or as a freelancer – you charge $1000 for a design project. That project takes ends up taking you 80 hrs to complete. Your hourly ends up being $12.50/hr. The last thing you want is to lose money with your offerings but in order price well, you have to know your numbers.
When you know all your numbers, you can better price and understand why the price is the price. That helps you gain confidence when dealing with potential clients because you know what it takes, you know why you charge what you charge and it’s not some random a** number you chose. You’re not price gauging, you’re not losing money, it’s an informed decision you made for your business.
A few resources:
– Do the Math Spreadsheet by ILoveCreatives
– Quickbooks (get 50% off)
– Toggl (time tracking)
2. Do Research
Just like knowing your numbers, it’s important to research the industry you’re working within. This helps you better gage the pricing within your space and know where you stand within it. There will always be a range and you have to find where your numbers (from tip #1) and your dream clients match up. As a designer, I see pricing from a few hundred dollars to six figures for a project. There’s nothing wrong with either route, but it should line up with your clients, your numbers & your capabilities.
You should also be researching your target market and getting a better understanding of what will be of most value to them. Again, there will always be a range and there will be clients that don’t have large budgets and some that do. Reach out to business owners you’d like to work with, go on FB pages, ask around and get their thoughts.
Know your target market, know your numbers, know your competitors and know your industry. Knowing & understanding where you live within that is powerful and helps you gain confidence. At the end of the day, you have to put your stick in the ground and say, this is where I’m putting roots and I’ll grow from here.
3. keep learning
Often times I feel like when fellow creatives worry about pricing, it’s because they lack confidence in their skills or their work. First off, you’re probably f*cking amazing and second off, if you aren’t confident in those skills – keep learning! The more you know & the more you hone in your skills, the better you become overall and the more valuable you become. And with that knowledge, you’re going to gain confidence. Confidence in your skills will translate into confidence in your prices.
A few resources:
– Skillshare (get 14 days of premium free)
4. Stop worrying about ‘charging too much’ and focus on the roi
One of the biggest tropes is that we worry too much about charging too much rather than focusing on the value we provide and potential ROI for our clients. It took me a long time to understand this and get over it but now I can confidently say, I do a f*cking good job, so pay me. I know that what I do in terms of design work & products are valuable and will only help grow someone’s business. And I know that the return on investment in evident – especially if they are ready and willing to grow.
You have to approach your work as trying to be a benefit to your client or customer. And truthfully, there will be people who see no value in what you do and others who see tremendous value. It’s not your job to change the mind of someone who doesn’t value you, it’s to work with those who do value your work or products.
When you know how your work can benefit your client or customer, when you know how the ROI can increase, etc. you’re going to gain confidence with your pricing.
5. Provide different pricing levels
I have a lot of respect for people and how they make their money. I’ve worked minimum wage jobs before and I definitely know the value of a dollar. One of my biggest challenges was feeling ‘bad’ if I charged too much because I didn’t want to take away from someone who maybe needed that. One way to get over that is to provide different pricing levels and ways of working / buying from you. This can be a range of services or product offerings that hit different price points. I have custom design packages, template restyling and a template shop. I know, I’m doing my best to help people with different price points get what they need.
If you aren’t 100% confident that everyone will need your high priced package, then provide lower priced options. You can direct people based on their budgets and needs to the right package for them. You don’t have to be the least expensive with every offering or product you sell and you don’t need to be the most expensive either. Again, run your numbers and then do what will work best for you and your business.
6. At the end of the day, it’s just a number
You’re not going to be for everyone and your pricing won’t be for everyone. That is okay. You are making an informed decision about what to charge based on numbers, value, ROI & research. If that doesn’t work for someone, that’s totally cool. There are over 3 billion people in the world, there are PLENTY of potential clients & customers out there. Don’t stress. It’s a number and a number that can change based on what works for you.
At the end of the day, pricing can still be a stressful topic and discussion. But when backed up by knowledge, research and skills – you can have the confidence to price your work / products well. These are my tips on how to gain confidence with your pricing as a freelancer and these are what have helped me personally gain more confidence.