How to put a price tag on your skills and value what you’re worth
One of the areas entrepreneurs struggle with most is learning how to place a value on what you’re worth to a prospective client. This is especially so when you’re in the service based industry. The key to this is thinking about what value you create, not how much your hour is worth.
Start by thinking about how your skills translate into revenue and profit for others. This way, you can better figure out a rough number for what your skills are worth to other people. Your skills should be able to translate into some sort of value add which has a tangible dollar value.
If you know something or can do something with ease that your client really needs then it all comes down to what it’s worth to them to have you take care of it in the best way possible and in the least amount of time. Spend time interviewing people to find out what makes them tick and what's most important.
Rinse and repeat
The best way to gauge the market value of your skills is to put them on the market then adjust your prices based on the response you get. It's a basic premise, but a lot of people are afraid to start, because they don't want to risk setting their prices wrong. If you go too low, increase prices with each new client. If you go too high and don’t see results, then consider doing a sale or finding a market prepared to pay what you’re worth.
While normally not something advisable, in this instance it’s good to look at what other people are earning and keep tabs on what industry rates are. You can Google search salary listings, speakers' fees and anything else that relates to what you do. Pick a few key people you’d like to emulate and see what they've done and how they've reached that point. Put all that together and you get at least a ballpark of what you could charge. Use this as a benchmark only, as ultimately, only you can value what your skills, knowledge and money you’ve invested in getting them are worth.
The price is right
Speaking to the above point you do want to think more about value than price. Making price your strongest asset is risky and hard to sell. Think about the value your service can provide. How much time or money can you save people with what you offer? How can you help them enhance their own offerings and grow faster? People understand costs when they relate to their own bottom line rather than yours.
Target market counts
Who you sell your skills to and where you position yourself will have a huge impact on your perceived worth. Think of it in terms of products: If you see a watch for sale at a flea market you will expect to pay around $5, yet if you see it in a boutique store you would be prepared to pay over $100. Applying that to you, if you want to increase your value, position your skills in a boutique marketplace where people expect to pay more.
Spend some time
Find out what your clients are already spending. If you plan on selling your skills to someone it is always valuable to know what your client is already spending on related services. Let’s say you’re nutritionist catering to the corporate world, then find out what their proposed budget is for outside consultants and what their current health insurance is costing them! Prove your value.
Proof is in the pudding
Ultimately people will pay you what you’re worth if you provide amazing work consistently. Always deliver over and above. In return you’ll get more referrals than you can handle and can then adjust your prices accordingly to meet the demand. Focus on what you do best and don't try to be too broad with your skills. Take a few skills and make them awesome where you are the "expert" in that area.
Remember don’t sell yourself short. Think about how much your time is worth, the costs you have to cover as well, what makes you different from everyone else, and the value you provide. Don’t forget about the costs that you have to cover too. Go get em!
is a Kiwi Entrepreneur and Adventurer dedicated to finding creative ways to help you run your business from anywhere. She focuses on using online tools, social media and outsourcing to create more freedom in business and adventure in life. Her blog The Suitcase Entrepreneur
features articles on all aspects of running a virtual business, a wealth of resources, biz and travel tools plus a large dose of inspiration, insight and intelligence.
Did you find this article helpful?
0% said yes