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Pricing for Profit: What Is Your Time Worth?

What’s the number one question that consultants, coaches, writers, entrepreneurs and anyone offering freelance services ask? The answer: How to price their time wisely so that they can acquire customers and turn an honest profit. Knowing what your time is worth is the starting point to determine your prices.

Ask yourself…

  • How much do I need to earn annually to live on? Divide that by 50 weeks (assuming 2 weeks for vacation each year) and then by 5 days in a work week. That gives you a rough idea of what you need to earn weekly. Now divide that by 5, and you’ve got your daily wage….divide it again by a 7 or 8 hour working day, and that’s a rough estimate of your hourly rate.
  • Do you have any specialized education, skills or experience that sets you apart? That increases your hourly rate. Those who can provide they have additional knowledge that would be hard for the average person to acquire can charge more for their time, because hiring someone with specialized knowledge SAVES time and money in the long run.

Specialized Skills Are Valuable

One mistake many entrepreneurs make is launching their businesses as jack of all trades. The problem with the jack of all trades approach is that you end up being so vague about what you can do for others, or you pile on so many skills on your resume, that people are reluctant to trust you. How can anyone do so many things well? It’s true that many people CAN do a lot of things well. However, by focusing your business pitch on a few highly specialized, rare, unique or highly-sought after skills, you add value to your work.  When you add value, you can charge more.

People Pay What They Believe You Are Worth

If you keep getting offers to pay you far less than you value your time, ask yourself this: are you proving your values to your clients?

People are always willing to pay more for:

  1. Results: Do you share with potential clients the results you have achieved on past projects? Why or why not?
  2. Value: Do you add something special to your services? A special touch, something that sets you apart from others? If not, what can you do to add value?
  3. Quality:  Quality always sells. Are you offering the very best quality of services you can possibly offer? If not, how can you improve your quality level?

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]Pricing is both an art and a science[/pullquote]. The scientific part is figuring out the nuts and bolts of your hourly rate. That you can do through deductive mathematics, or working backwards from an annual benchmark figure you have in mind. But from that point on, pricing your services become more of an art.  Adding value through specialized skills, knowledge and experience, adding quality and specialization to your service offerings can all help you add value to your customer relationships and charge prices that are both fair to your customers and profitable for you.

book cover Pricing Your Services

These and other tips are based on Pricing Your Services: 21 Tips for More Profit by Jeanne Grunert.  The book is available from Smashwords, Amazon and your favorite ebook retailer.

Jeanne is the president of Seven Oaks Consulting and offers marketing consulting, coaching and seminars, and marketing writing services for businesses and marketing agencies. Visit her marketing writing website for more information.

 

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