Know Your Worth: 5 Steps You Need To Take Now
Do you have a hard time figuring out how to charge for your services or products? Well, if you’re like most female entrepreneurs and business owners, chances are you’re not charging enough. Women as a whole still earn less than men. In fact, the women’s-to-men’s earnings ratio has been in the 80-81% range since 2004.
We believe women are still earning less than men because, as a whole, we don’t ask or charge for our value. So if you’re in business for yourself, here are five tips to help you increase your fees and charge what you’re worth!!
1. Track You Time
Benjamin Franklin once said, “Time is money” and that got us thinking…how much do you actually get paid per hour? Does that sync up to how time you spend on projects? How do you invoice for your time?
Try to use a time tracking program (Ie: Toggl) to truly track your time per project and overall time spent on business activites. With that information, you will know how much your getting paid per hour per project and per hour working on your business as a whole!
2. Calculate How Much Business Revenue You Actually Need
Most people start businesses so they can be in control of their income and lifestyle goals—but that dream can quickly fall to the wayside if there are no clear business revenue goals in place. The first step in charging more for your services is to get clear about how much gross business revenue you actually need. We hear a lot of women say they want to have a million-dollar business. And while I do believe you should aim high, instead of just picking numbers from the sky, make sure your goals are in direct relation to the type of lifestyle you want to live.
Maybe you only need $75,000 in gross business revenue to allow for the life you want. So then why aim for a million-dollar business if that’s not really what you want or need? To calculate your own business revenue goals, simply reverse-engineer your goals for the year by figuring out how much net income you need to support your ideal lifestyle and fund your financial goals. Then add in any personal and business taxes and business expenses. This becomes your business revenue goal for the year.
Once you’re clear on your business revenue number, you can begin to review how much you’re charging and increase your fees, if necessary, to reach this goal.
3. Do the Math
Once you know how much business revenue you need, figure out how many clients or customers you can handle. For example, if you're a service-based business, you decided you need to make 250,000 per year and you know your team can handle only 100 clients per year to ensure you're providing the level of service you want and still maintain your ideal lifestyle. Therefore, your minimum fee would be $2,500 ($250,000/100 clients = $2,500).
You can also do the calculation another way. For example, let’s assume you sell purses and you need to sell them at $100 to be profitable. You figured out that you need $75,000 in gross business revenue to support the lifestyle you want. If you do the math, you’ll see that in order to reach this goal you need to sell 750 purses. Now, you can create a marketing plan to reach that target. If you do the math and don’t feel comfortable charging the amount you need, then ask yourself how you can add more value to your services to become comfortable charging more. If you still don’t feel comfortable charging more, then what do you need to implement to sell more units. However you decide to slice it, make sure the math adds up.
4. Practice, Practice, Practice
Once you have your fee or price set, practice saying it aloud. Pretend you’re on the phone or in a meeting with a client and state the fee you’ve determined for your product or services. I recommend role playing and stating a fee that is three to five times higher your actual fee so you get comfortable quoting higher numbers. For example, if your service fee is $500, then practice charging $1,500 during your role play until you get comfortable with that number. Then when you actually charge $500 in real life, it’ll be no big deal.
Sometimes our fears around charging a higher amount can take over and make us feel that charging more is so difficult, or that we’re not worth the higher price. Remember, it’s just a number. If you believe in your product or service and the value you’re bringing to your clients, then you should be able to stand behind whatever price you feel matches that value.
5. Have Confidence and Stop Doubting Yourself
At the end of the day, as long as you truly believe in your products or services and the value you are bringing to people’s lives, you should feel confident charging the appropriate amount for it. As women, we sometimes doubt our value and self-worth, and that is often reflected into our business fees or prices. But nobody wants to work with someone who doubts herself, so stop it! You don’t need to compare yourself to others. Just believe in yourself and your work. Once you do, your customers will, too.