Let’s get to the point, yeah? MONEY.
You need it to have a business (otherwise you’re just running a REALLY time consuming hobby, which is cool if that’s what you want to do, but then don’t bitch about not making any money).
When you’re first starting out, the money part of your business can be suuuuper stressful. You’re totally broke, so you’re frugal as hell and won’t even spend $10 on your business. And at the same time, the thought of asking your clients for money is terrifying. You sound awkward and nervous and so not professional (and yes your clients can smell it). And nevermind the fact that even if you DID try to ask confidently, you have no idea what you should actually be charging.
So what’s a gal to do? Gotta spend money to make money, but gotta make money to spend money.
You have to start somewhere.
It’s like the chicken and the egg, except I doubt whether the topic has ever sparked any in deeper questions about how the world started.
I want to walk you through some of the most important things to think about when you’re just getting started with trying to figure out what the hell to charge.
First of all, you have to have a service. If you’re still stuck there, I’m the bomb (do people still say that? I do. Bringin’ it back) at helping you figure out what to actually offer.
But we’ll assume that you already know what you do.
So what to charge? This is a BIG question and there are lots of different opinions on it. And this is my blog, so you get my opinions.
Here’s what you need to think about when you price:
1. How long have you been doing what you’re doing? If it’s your very first rodeo, I’d suggest doing it for free (yep, that’s right, I love working for free), so you can make sure you’re actually GOOD at what you do. Testing things out for free also takes the pressure off, AND lets you get valuable feedback and make the necessary tweaks to your service before you ramp up the price.
You can plan something all you want, but at the end of the day, it might just not work out the way you had planned (it’s like dating the guy who looks good on paper, and then turns out to be the guy who sneaks you into the movie theatre so he doesn’t have to pay – it’s always the rich ones who are the cheapest, right?). So testing your services for free or Pay-What-You-Want is always a good way to start.
2. What amount feels good to you? Yes, this is a legit method of pricing. It doesn’t matter what anyone else charges (most people price their services based on their own insecurities about money anyway), you have to feel good about what comes out of your mouth when you tell your clients your prices.
At the end of the day, you can’t charge a number that makes you vomit when you say it out loud. You also can’t slap a price tag on something that makes you resent your clients because they’re stealing all your time and you can barely afford to pay your rent.
Choosing a number that feels good to you is mega important.
3. How much money do you want to make? It’s almost SO obvious of a question that we often overlook it. When I left on my 7-month rockclimbing trip last year, I decided that I wanted to make $250/month from my business. In fact, I decided I’d be STOKED if I made $250/month. I mean, I created something and people were paying me for it – at the beginning, that alone was incredible!
Don’t think about your longterm money goals here. Look at the next year and decide how much you’d be thrilled to make. And as much as I loathe the word – choose a number that is realistic (ie. If it’s your first year of business and you have no prior marketing or business experience, I wouldn’t be gunning to make $150k next year).
If you want to make $30k, and your service is $100, you can then do some math and figure out how much you need to sell to meet your make-money-money goals.
4. How good is your website? Seeing as I’m hanging out with the amazing Lis Dingjan from The Identity this week, I’ve been all up in the world of websites and you guys – you NEED a good site if you want to charge premium prices! No, you don’t need a perfect site, but you do need to at least look legit (which means no photo with your partner cut out of it, no wordpress.com URL, no header image that is all stretched out because you couldn’t be bothered to figure out how to make it fit.)
Once you’re clear on your business (your WHY, WHO, and HOW), it is 100% worth it to start to invest.
And since we’re on the topic, let’s step away from pricing and talk about websites.
Here are some of my favorite website resources for every website budget:
The Shindig – DIY your own basic website with this free video (one of the first things I ever made in my business! You’re welcome to laugh at me, but it gets the job done). I walk you through how to set up hosting, integrate wordpress, and install a free theme.
Small budget ($0-$100)
Medium budget ($500-1000)
Brandburst is another excellent option (yes, I’m biased). You get a full messaging session to get mega clear on your WHY/WHO/HOW, a perfect tagline created for you, and a full color and font palette to fit your unique brand… and then everything is put together into a fully designed header. It’s the perfect get-started package.
If you hop into the community, there are frequently designers in there taking on new clients at lesser rates.
Big budget ($5000-10000)
Hire a designer to do a proper job for you. It is WELL worth the price, but only if you are really clear on what you are doing. The worst thing would be to invest and then change your business so much that your website doesn’t work for you anymore! A custom site will run you $8-10k and up, with some designers coming in at just under that if your site doesn’t require complicated functionality like e-commerce etc.
If you want to charge premium prices and rule the world (ok, maybe just rule your market), you have to have a good website. Start where you are and invest when you’re clear on your business.
Ok, website rant over… back to pricing.
At the end of the day, it’s up to you what you charge, but taking the above into consideration will help you take the UGH factor out of setting your prices.
Pricing doesn’t have to make you want to puke. You should be able to tell your clients what you charge without feeling like a total fraud (and if you do feel like a total fraud, investing in more training or getting more experience is probably not a bad idea.)
And remember, getting PAID is FUN. In fact it’s one of the funnest parts of business, because it not only lets you do fun shit like fly to Holland and then Morocco and then Paris on a whim (I’m writing this while on the tail end of that adventure), but it actually lets you have a bigger impact with your business by investing back into your work, so you can reach more people and save the world even more.
And who doesn’t want to save the world even more!?