What is an hour of your time worth? How about a week of your time, or a month, or a year? If you can only come up with a vague number or a ballpark estimation then you could be vastly underselling yourself, according to Lisa Messenger, author of Money & Mindfulness and editor-in-chief and founder of The Collective magazine. “I can often tell within the first conversation with a professional, entrepreneur or employee if they are earning less than they deserve to be,” explains Lisa. “There are a few common contributors, which I outline in my book, including self-doubt, creative shyness, childish hangups around money or a fear they’ll be seen as greedy or arrogant. Let’s face it, in this bargain-centric society no one is going to pay more for your services or skill set than they have to. It’s up to us as individuals to name our own price, so that you can reap the rewards.” So if you suspect your underselling yourself, heed this advice from Lisa. Here, she reveals her top tips for pulling in what you’re worth…
#1 Don’t Talk Cheap
“Are you pricing your products in a manner that is profitable for your small business, which will offer you a long-term future, and allow you to expand, prosper and thrive?” asks Lisa. “Pretty much anyone with no business training could have a one-hit-wonder company if they offered a product or service for a fifth of the price of their competitors. But, that company probably won’t be around to celebrate its 10th anniversary – or even the second.”
#2 Do Ask for More
“A few years ago, when my business was focused on book publishing, I upped my fees overnight after realising I was under-pricing our services,” Lisa reveals. “Of course, our new business model didn’t go down well with everyone, especially returning clients who were used to securing our services in exchange for a pocketful of small change. I learned an important lesson in the power of ‘no’ and focusing on the long-term picture. We did lose some clients, but we soon picked up others who didn’t think twice when we mentioned our fees.”
#3 Don’t Pick A Ballpark
“When I upped our fees, I didn’t just pluck a ballpark figure from the air,” says Lisa. “I sat down with a notepad and, over four hours, I logically, objectively and realistically wrote down how much work really went into our average projects. I looked at the margins other publishing companies added to their production costs (those that I was aware of) and theorised others. I thought realistically about how much I could shave off and calculated a fee that made us appear competitive without being mugs.”
#4 Remember, It’s Not Just 5 Minutes
“The most simple and powerful piece of advice I can give to anyone, whether you’re an entrepreneur, freelancer, office worker or somewhere in between, is to know your five-minute rate,” explains Lisa. “It might sound pernickety, but just think of all these five-minute sections as $5 bills. Would you just toss them out of your car window as you were driving? Knowing your five-minute rate will help you make logical scheduling decisions – should you hire a personal assistant or do your admin yourself, is the cost of getting a cab to that meeting justifiable because you’ll get there faster? There are many online tools that can help you calculate this.”
#5 Pick A Pretty Number
“Okay, I’m being a little tongue in cheek, but we’ve all bought something for $199 that we wouldn’t have bought if it was $200,” Lisa admits. “When the first Apple-1 computer went on sale in 1976, the story goes that it was priced at US$666.66 because Steve Wozniak was ‘into repeating digits’, and it was easier to type than the wholesale cost of US$500. It might not be the most logical way to make a financial decision, but I wonder how many people were lured into buying that computer because of this.”
#7 Let It Go
“There are still times when I think, ‘I should have charged more.’ Like when I realise a project will take more effort and time than I first thought. But I’ve learned to let this go and look forward. There are also times when I slash or waive my fees entirely because it’s a project that excites me or a charitable cause I’m passionate about. That’s the beauty of writing your own price tag – you can tear it in half when you want to. Just don’t let anyone else do it without giving your okay first!”
