If You’ve Never Priced Yourself Out of a Job, You’re Not Charging Enough
What if offering a better price than all your competitors wasn't the best way to go? What if simply being the cheapest wasn't a way to success?
Meagan Fischer, the owner and web designer at Owltastic tweeted this story:
Real thing that just happened to me: I quoted a client a rate, and the project manager responded with "how about we triple that, so it better matches what we've paid our male designers for the same work?" 1. This client is heroic. 2. Female designers: ASK FOR MORE MONEY.
It's a good lesson for all of us. Fischer was undercharging and wouldn't have known had a kind project manager not brought it to her attention.
It's hard to know what to charge in the freelance and contractor world. There are lots of people out there who will tell you how to calculate your salary based on what you'd earn as an employee or taking what you'd like to earn and figuring out the hourly rate it will take to get that, based on the number of billable hours you can put in. It's great advice, but it forgets one thing: the market.
There are some jobs that pay more when you're an employee, and there are some jobs where contractors get a premium (even after taking out the expenses of being self-employed). You can't just assume that all things are equal among all professions.
Additionally, multiple people offer the same services but come at it from different angles and with different experiences. Some work faster than others.
It all boils down to figuring out your market and then setting a price. And, as Kaminsky says, if you never lose based on the price you're charging too little.
In the past 8 years as a soloprenuer, I've had to figure out what to charge. I've undercharged and regretted signing the contract. (I still did an excellent job, but realized too late that my bid was way too low.) I've bid on things where I've worked up a figure and had the project manager come back and say, "we were thinking about 1/3 of that figure." But, after years of experience I have my rates, and while I'll happily accept more, I don't ever accept less.
Yes, I lose some jobs. But, that's a good sign.It means I'm competitive, not a sucker.
So, if you land every job you bid on, it's time to take a look at your fee structure and raise your prices. You're better than that. Remember, people are willing to pay for quality. Most of the time. (Sure, I got a request last week to write three articles for "exposure" from a magazine I'd never heard of. My answer? Here are my rates, get back to me when you can pay them and we'll talk.)
Now, if you never or rarely land a job, your rates are too high. We all understand that. But, take a look at what you charge and see if you're earning what you deserve.