Self-employment is on the rise with 14% of the UK workforce now describing themselves as freelancers or self-employed professionals. Between 2008 and 2017 the number of freelance workers in the UK increased by 46%. In Yorkshire, 7% of the workforce describe themselves as self-employed.
The number of women working for themselves has also grown significantly, driven by the need to achieve a better work-life balance which is highlighted by the particularly rapid rise in the number of self-employed working mothers. Right now, one in seven of all self-employed people are working mums.
If you have made that decision to become self-employed then, the difficult decision of what to charge is one you'll be struggling with.
It is common knowledge that most professionals undercharge for the excellent service they provide. They end up working longer hours with less income because they do not charge the right price. They tend to have little confidence in the value they provide to their clients, so are reluctant to charge more. Others incorrectly assume that their clients cannot afford to pay more, never increasing prices due to fear of losing clients. However, charging the lowest price in your industry could do your reputation more harm than good and could potentially damage your credibility. A price that is significantly below market value sends out a message that is not always a good one.
Increasing your fees periodically is a great strategy. A 1% increase in fees is a 1% increase to your bottom-line. Contrary to popular belief, the price of professional services has very little to do with the cost of delivering the service and should have everything to do with the value that is being delivered to the client.
In addition to the increased profits, increasing your price delivers other benefits:
- It differentiates you from the myriad freelancers out there fighting for the same mediocre price points.
- It also forces you to develop and push yourself so that you are able to deliver value that matches or even exceeds the higher price you are asking for.
- Higher pricing also flushes out dead weight clients so that you have more time and energy to focus on your best clients, delivering even better value. This is particularly important if you are pursuing a freelancing career as a way of achieving a better work-life balance.
I am not advocating that you hike your fees overnight but a justifiable and well-planned increase will go a long way to helping you achieve your income target.
So how can you actually charge what you are worth?
- Believe that you are worth it
This is the first and biggest hurdle you have to jump in order to be able to charge what you are truly worth - not what your creatively deceptive mind is telling you, you are worth! The way to do this is to practice saying your prices to yourself and your close friends so that you start feeling comfortable saying it out loud. It will initially be uncomfortable but isn’t growth and development all about stepping out of your comfort zone? Look yourself in the mirror, tell yourself you are worth it and say that fee out loud! How does it feel?
- It's really not about you, it's about your clients and the value you bring to them.
It is time to stop thinking about the service you provide as a cost. You have to think about the results and benefits you give your clients. Your clients are investing in their lives and their business when they work with you. It is not really about you. Thinking like this takes the focus from you and places it firmly on your clients, where it should be. Remember, your clients are not simply buying your time. They are accessing expertise you spent a lot of money, effort and time developing. They are investing in a service whose impact oftentimes far exceeds any price they pay you.
- Put a plan in place
Make it easy for yourself by taking the guesswork out of implementing price increases. For every ten contracts or new clients why not increase your fees by as little as 0.5 to 1% for your next set of clients. It makes your pricing reflect and factor in your growing reputation and also applies some kind of logic to the way you increase prices.
After plucking up the courage to increase their fees, most professionals are shocked by just how receptive most of their clients. They wish they had had the confidence to do so earlier.
Source: IPSE Exploring the rise of self-employment in the modern economy.pdf
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