Freelancing means learning new stuff: Up front as you begin, and continually as you build professional skills at everything from communicating by email to pricing your services. “What should I charge clients?!” is one of the biggest challenges I have seen freelancers struggle with. It causes many to feel really uncertain, distressed, anxious, and in many cases, really unsure about themselves and their abilities!
Pricing services causes this much emotional trouble? Really??
Yes, really. And it is because there is a ton of stuff going on in our minds about what different prices mean. During 15+ years of being in school and in our part-time and full-time jobs, we learned to be great employees. However most of us never learned to be great at employing ourselves. So we don’t actually have a mental model for what our work is worth and this causes us uncertainty when faced with the challenge of pricing our services as a freelancer..
Pricing challenges are in our heads
I have heard the following many times, including in my own head when I started out freelancing my training, consulting, and coaching services:
- “But I couldn’t charge clients that much money. I would feel guilty!”
- “But I don’t know how much work it will be, so I must charge per hour!”
- “But I don’t want to lose a customer by charging too much!”
- “But I am not very experienced, so I should charge a low price!”
- “But what if I can’t deliver on the promises I make for that package price?”
- “But every customer is different. I can’t charge a package price!”
- My favourite: “But I wouldn’t pay that much, so I couldn’t charge that high for a package!”
Can you think of one or two more that are not on this list? Our mind spawns “But…!!!” objections to seeing things in a new way and changing how we think because we are human beings. It is just the nature of our minds to find reasons to reject things that are too new or big, particularly when we don’t have experience at something (ie freelancing!) and a solid mental model to work within.
Let’s break these “blocks” down analytically, then look at the deeper stuff in our heads that may be driving these beliefs and blocks. This will give you the understanding you need to either blast through them or dissolve them with courage and the decision to see yourself and your freelancing work in a new way.
As a freelancer you are really running your own business. You must charge prices that reflect not only the value of the work you do (Part 3 of this series will address this), but also the fact that you need to make a living doing this work.
Four things to internalize to help you overcome pricing beliefs:
1. Your package prices must include all the time you use for:
- Finding clients.
- Proposing a package to them.
- Waiting for them to decide if they want your services.
- Doing the work.
- Communicating with your client before, during, and after the project. Yes, the time, focus, and effort it takes to think about the work and communicate with clients about it.
- Invoicing your client.
- And your package price must include time for you to do your accounting, banking, learning new tools and skills, networking, etc.
You are not just charging a client for the actual hours of work you do for them, but also for all the effort and time before, during, and after the client work is done that contributes in some way to the overall value you offer.
Can you see why you can’t just charge by-the-hour for the “work” you do?
2. Employees do a narrow set of sub-divided tasks in a physical workplace that has all its costs paid for by the employer. As a freelancer you do a wide range of tasks for a project and for your freelancing business. And you must include a cost for your “overhead” – everything that goes into your business life: Your “office” space, transportation, accounting, billing, technology, internet, and more.
Again, can you again see why you can’t just charge by-the-hour? Employees have to pay nothing to do their jobs and are usually trained for a narrow set of tasks. You, on the other hand, must pay for everything and do a wide range of tasks! So you must charge more for the services you offer.
3. Your freelancing client needs a solution, as discussed in Part 1 of this series. You must deliver that solution. If you do not charge a high enough price your client will not believe that you are “professional enough” to do it. To them, their work is “high value” and is usually something they can’t do, which is why they need an external freelancer. You must charge them for this “high value”.
4. The MOST important fact to internalize: You are NOT the client. What you would pay or what it would be worth to you is irrelevant to your pricing. What your client will pay for a package of services that provides a solution to them has nothing to do with what you would pay.
This is so important that I will give you an example:
Let’s say you know how to build web sites. You could whip up a WordPress template-based web site, including putting in some stock photos, pre-written content, and doing some CSS tweaks in…oh, about 4 hours. If you were to charge a client $1,250 dollars for a “web site package”, you might say to yourself “I can’t charge that because I wouldn’t pay that huge price for the work myself! That’s over $300 per hour!!”.
Do you see the problem? Your client can’t build web sites easily and quickly. In fact, they don’t know WordPress at all! And they don’t have the time to learn how, nor do they want to learn how. The simply want a nice looking web site. To them, $1,250 is GREAT value for the relief of not being able to do it themselves, for having it done quickly by you, and for a professional looking site that you could do better than they could do it!
Give yourself the biggest pricing gift of all as a freelancer: Remove yourself from the pricing equation. The prices you charge clients have nothing to do with what you would pay. The prices you charge are only, and always, about what your client perceives as value to them.
A real example:
Summary: Use this “analytical tear-down” to push as many pricing objections out of your mind as you can! This is war – a war against your own mind, which wants to keep you focused on a preprogrammed “employee” mental model. Win this war and you are well on the way to being a successful and well-paid freelancer!
The Deeper Stuff in Your Head
This part is actually shorter but likely harder to deal with than the analytical tear-down. You see, deep in our minds are fears, traumas, and uncertainties that affect our confidence, willingness to learn and grow, and ability to make decisions and make stuff happen. Yes, we all have them, but few people talk about them. Thinking about that “buried stuff” makes us squirm. Talking about it makes us feel even worse.
So how might we resolve a conflicting message we perhaps heard all through our growing up years from a parent who said:
“The only way to success is by getting a good job! You MUST get a good job or you will be a failure”.
This is an example, only, but our subconscious is littered with learned “truths” that are both not “true” and linked tightly to our emotional states.
This is where courage comes in: Freelancing takes courage. Offering to help a client is about you stepping out strongly in the world as a independent professional. It takes courage.
Whenever one of the deeper beliefs, traumas, and uncertainties arise to your conscious mind and begin to sap your confidence, enthusiasm, and energy, are you willing to find the courage to challenge it?
“I choose to believe that I can be successful as a freelancer, for however long I choose to. Other people’s beliefs about a job being the only way to success is their truth and their reality. My truth and reality are different. I can and will be successful at freelance work.”
I make it sound easy, and for many of the things in our head it is actually very doable to “blast through” and re-write your ingrained beliefs. However, there can be stickier and more challenging beliefs, traumas, and blocks to transcend, and there are techniques for dealing with these. If you are stuck with one or more sticky challenges, hire a good coach to help you get free of it.
Every freelancer faces a number of barriers in their own mind that must be overcome in order to be successful. Are you willing to overcome what is “in there” in your own head?
A mind free of “But, but, but…!!!” is a key part of freelancing success!
Action: Do this right now
Stop what you are doing. After reading each of the following questions, focus on something in the distance with your eyes for a few minutes. What comes into your mind? Can you analytically blast through any objections or courageously declare to yourself that you won’t be held back by deeper stuff?
1. What beliefs make you feel strong and confident? (feel free to write these down if it feels good to do so)
2. What beliefs and “truths” other people told you make you feel weak and scared?
3. Can you find the courage in yourself to face the negative stuff in your mind and decide not to have your emotions, thoughts, confidence, and motivation be impacted by it?