How to Set Your Rate and Get Paid What You’re Worth
That surprising, yet flattering, message had me thinking about setting a rate. How do you set a rate that represents your worth? How do you know when it’s time to increase your rate? Should you negotiate? That’s why I’m so excited to introduce you to Meg K. Wheeler. A former CPA, Meg left the corporate world a decade ago to become her own boss. Now, she’s a financial coach who helps online business owners master the art of money-making.
To help, Meg’s sharing her tips for setting a rate that reflects your worth:
Do Your Research
As kids, we were instructed to never talk about money. It makes sense, doesn’t it? Nobody wants to divulge every last detail of their credit score, student loan debt, and salary. But, when it comes to being your own boss, knowledge is power.
“Do your research; don’t just pick a price because it sounds good,” Meg says. “Research what your competitors are charging, what is standard for your industry, and make sure to factor in the cost of your time and any other inputs.”
In addition to charging for inputs like materials or extra labor, Meg also recommends factoring in overhead expenses like your monthly rent and WiFi bill.
This all sounds great, but how are you supposed to know what your competitors are charging? Ask your freelancer friends about their rates to get a better understanding of the market. Or, if you’re still a little nervous to talk about money, check out resources like Clockify and The Balance. (The Internet can be a very magical place.)
What’s Best For Your Bandwidth?
Another factor you might want to consider is your bandwidth. As someone who loves what I do, I’m eager to take on new projects. However, taking on more work means I’ll have less time to watch movies with my boyfriend, cycle to a throwback playlist, or watercolor while listening to my favorite true crime podcast — a.k.a my new quarantine hobby. Whether you’re writing a quick blog post or creating a startup’s marketing campaign from scratch, more work will equal more time working.
It doesn’t matter how passionate you are about your career, your free time is sacred. (It’s something I’m starting to learn, too.) You can’t put a price tag on quality time with your family and friends, but how much money is worth putting your free time on the back burner?
Re-Evaluate on the Regular
Your business is always changing, so why shouldn’t your rate follow suit? Meg recommends re-evaluating your rate every six months — and increasing it as you see fit.
“Adjust for your skills, experiences, and proven results,” Meg says. “I’ll adjust up for any added skills or proven results. I will also adjust up if I offer additional benefits or services.”
Meg also recommends increasing your rate if your bandwidth is at critical mass or if you want to balance your schedule. Why work for 40 hours a week when you can make the same amount of money for less time?
Communicate With Your Clients
Sure, presenting a potential partner with a higher rate seems easy, but negotiating with a current client? That sounds downright nerve-wracking. According to Meg, it’s important to negotiate your rate with your current roster. The key? Clear, efficient communication.
“For my best clients, I will hop on a phone call and communicate the price change to them,” she says. “For most clients, I will send an email that outlines the change in a clear, concise manner. Don’t over-justify your change, but do include a sentence or two that explains the price change. For example, you’ve gained an additional skill or have seen greater proven results for your clients. This simple explanation goes a long way to helping your clients understand the change.”
Since your new rate will impact your client’s bottom line, give them two weeks to one month notice before implementing these changes in your invoice.
Know When To Walk Away
So, what do you do when your client gives you and your new rate some pushback? Take a deep breath; it’s going to be okay.
“If you have clients that push back, consider what they say, but don’t jump just because they balk at your price,” Meg says. “I’m very particular about who I will make adjustments for, and I rarely ever do make them. Most of the time, I stick with my pricing and my clients respect it.”
While some companies might have a legitimate reason for pushing back on your new price, take this time to consider your relationship with your client. How long have you been working for them? Are they a low-maintenance client? Do you like the work? If you can’t find a reason to make a price adjustment, you can always walk away.
“If your client doesn’t respect you for raising your prices, they are worth losing,” she says.
Hustler of the Week: Stephanie Wong
Congratulations on the Bright Collective! What inspired you to create this community?
I’ve always been passionate about branding and wellness, so I wanted to create a place that supports other like-minded entrepreneurs. This could be branding, website design, social strategy, and more. I’m also a big believer in collaboration, so I wanted to include other creatives that could be of service. I want the Bright Collective to be a one-stop-shop for all your creative needs — from launching your brand to growing your business.
What is your favorite part about being your own boss? Least favorite?
Hands down getting to create my own schedule! I love that I can take long, mid-day breaks without the pressure of being on Slack. My least favorite part is probably taxes and all the admin stuff. I’m recently self-employed, so there’s a lot to learn in this area.
You also teach yoga classes! How do you balance the two ventures?
I’m still fine-tuning the balance part, but teaching two classes a week has been a great cadence so far. (You can check out my schedule here.) I love that yoga gets me off my computer, activates a different part of my brain, and gets me more into my body. So far, it’s a great combo.
What is the best lesson you learned when launching the Bright Collective?
The whole process is more rewarding when you’re collaborating with other people! Going freelance or working for yourself can be isolating at times, which is why I love the Bright Collective. It’s super collaborative and makes celebrating the wins that much better.
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