Archive for October 3rd, 2012

Dear Danielle: I Have No Confidence in Charging What I Need to Charge

Dear Danielle:

I have found your information on how to be an Administrative Consultant helpful and informative. I have a question for you regarding rates for my support. I have been trying to see what others are charging, just to see if I’m in the same range and not charging too much. I did the calculation from your Income & Pricing Calculator and my baseline is $50/hour. The challenge I’m having is feeling comfortable with my per hour rate. Is there any way to overcome this? —RD

I know everyone does this when they’re new, but the last place you need to be looking when it comes to determining your pricing is your colleagues’ sites.

Hear me loud and clear on this:  It does not matter what anyone else in the industry is charging. (In fact, most are earning poorly because they aren’t charging enough whatsoever).

The only two important ingredients in determining your pricing are:

  1. you and what you have to offer in relation to
  2. your target market and their needs, goals and challenges.

When you deeply know and understand those things, you’ll find it much easier to command your fees without flinching.

Charging poorly can have detrimental, even devastating, effects on a young business.

Your goal in business is to provide value (not cheapness) to your clients and earn very well for yourself so that you can stay in business. You can’t take great care of clients unless you take great care of yourself first and that means charging profitably.

Looking at what (little) others may be charging as your guide will keep you in the poor house, potentially put you out of business, and contribute nothing toward increasing your confidence and savvy as a business owner.

The other thing I would want to tell you is not to charge by the hour.

Billing by the hour is an archaic, UNbeneficial way to bill that cheats both you and the client.

In fact, you actually make less money billing by the hour.

Instead, learn how to price and package your support by value.

It’s a WHOLE lot easier for you, it’s more convenient for clients and makes it vastly easier for them to say yes to working with you (all of which are outlined in the guide).

Lastly, confidence is a journey.

Your confidence will absolutely affect how you valuate your fees.

What you feel comfortable charging at the start of your business will be much different a couple years down the road. That’s because when most of us start out in business, we tend to be stuck in employee mindset to one degree or another.

Many new business owners aren’t aware that when they were an employee still working a job, their employers actually paid far more than what they saw on their paycheck.

They don’t realize all the other costs involved. They don’t understand that business and employment are two completely different animals, and that in business, it’s a whole other dynamic with entirely different standards, protocols and mechanisms involved in pricing.

And because they aren’t sure of themselves or how clients will respond, and still think of themselves as an employee rather than an expert, they are timid about pricing confidently and boldly.

Eventually, though, they begin to develop certain realizations. Their view of themselves changes. Their professional self-esteem increases. They get an inkling that they aren’t charging enough when they are slaving away ‘round the clock and still not making enough money. They think taking on more clients is the answer—until they see that they end up making even less than before!

Some people are confident right out of the gate while others take a bit longer to get there. The good news is that the longer you’re in business, the more your confidence will increase. As you work with clients, the more you begin to recognize the value of the work you do when you see how it improves their businesses and helps them move forward, overcome challenges and achieve their dreams. Your confidence in charging more professionally will grow from there.

Whatever your confidence level is right now when it comes to pricing, it’s perfectly normal.

At the same time, I encourage you to step outside your comfort zone. Experiment. Take a risk in your pricing and see what happens. Most people find that clients don’t bat an eye and wish they’d stepped up in their business a lot sooner.

Oh, and one more thought: the idea that you need to charge less just because you are new in business is complete and utter rubbish!

You might have a learning curve when it comes to successfully running and managing a business, but that doesn’t make your administrative skills and years of experience any less valuable. And a business simply requires that it be solvent and sustainable.

So while my goal for you is to price boldly and profitably, I realize that sometimes there is a bit of a journey involved in getting there.

That’s okay.

I’m gonna keep educating, coaching, encouraging, urging and reminding you, keep you thinking on your toes, and sometimes even chiding you and giving you a little kick in the pants now and then. 😉

You’ll get there!