Starting your entrepreneurial journey will be exciting, scary and so many other emotions. When you decide to take that journey wondering what to charge for your service will be a big part of your business structure. Your price and profits will be the determining factor to just how well your business is doing. You want to make sure you keep a few vital pieces of information in mind:
You want to make sure that you are not undercharging yourself. You may think if your rates are lower than most of the competition then that will immediately bring in lucrative business, and even if it does, it can do more damage in the long run. Let’s say you are a website designer, you charge $150 for a 6 page website. If you charge on average $100-$150 less than your competitors, you may bring in a good amount of clients. However, over time you will realize that you are doing more work but getting paid a lot less, even if you bring in more clientele. And let’s say 1 year into business, you decide to raise your rates to $300 for that same service. A lot of clients may not be happy with such a large price increase. Realistically you would have been better off starting off with that $200-$300 in the first place. It is important when you are in business to work smarter, not harder. That is what will bring you the best results.
When you are a new business owner, you will find plenty of people who will want to take advantage of you being a new business and will offer to severely underpay you, if pay you at all. In the new influencer- era, there are plenty of people who think they can replace a paycheck with things like exposure. For example, my social media has 2 million followers, so if you create a 1-minute social media video your work will be seen by 2 million, giving you more exposure and more potential clientele instead of paying your $500 rate. Try to avoid those at all costs. You will find yourself will high visibility but barely making 5 figures annually. Exposure or free marketing does not pay the bills. And it will be tempting to work with bigger brands and be able to attach yourself to something that could be very high profile. So, if you find yourself wanting to take on a project for less or money, do these two things: #1- limit the number of times you do these projects, two or three times a year tops and stick to it. #2- still try to negotiate some type of paid fee. If you can’t get a monetary fee, try to negotiate how they can be beneficial to your business.
Another thing to consider is not to overcharge. It is important to understand where you stand in the market in terms of the quality of service you offer. If you have been doing your craft for about a year, you probably should not charge the same rate as a competitor that has been in business for ten years. You would hate to get a reputation of charging a large amount and not being able to live up to the quality of service you provide. That will damage your reputation and make it hard to recover from that label. Research will be your best friend in determining your prices. Conducting short surveys to your target market on social media will be a great way to get answers from potential clientele of what they expect to pay for certain services is a great strategy to determine prices. It’s important to know your worth and add tax.