Mostly us small business people want to make sure we get all the work we possibly can. We are growing our businesses and we want to be successful. We need to make money to pay our bills and look after ourselves and yet pricing a piece of work can be fraught with all sorts of prickly issues which can catch us out.
- What if I charge too much and price myself out of the job?
- What if I charge too little and end up reducing my hourly rate to close to minimum wage and hating the job/client?
I wonder if it is a case of such extremes? Is there somewhere in the middle where a price can be agreed which suits both parties and enables you to do a good job of which you are proud and keeps the customer satisfied?
I think a question we often forget to ask our potential client is “Do you have a budget for this project?” This will help you decide whether or not you can do good work within that parameter or whether you are better off declining to pitch at all.
If the budget is smaller than you would like, what are the other options? Reducing the quantity or quality of what you can deliver and making it perfectly clear to the potential client what compromises that would entail in reduction in service. It might be just what they are looking for – cheap and cheerful, and for you it might be a quick job and a fee paid fast too. In fact, you could make that one of your conditions for a cheap job – pay in advance and I will deliver what we agree by a speedy deadline.
Sometimes we have to manage the expectations of our client. If you know their budget you might also know that if you cannot do it for that price, someone else who will. That way the potential client gets a chance to compare the two standards of work. My experience is often that when someone opts to pay cheap, they get cheap and still come back to you later for what they always really wanted and decided not to afford at that point in time. Nothing lost except a bit of time.
It’s often good to review the way you decide to pay the price for something. When do you pick cheap/affordable/luxury and why? And then look at your client’s other spending choices; for example, do they have underpaid staff who are not very able? What assumptions are we making, if any, about what our client will choose to afford?
What if you are too expensive and lose out this time? How bad is that really? It leaves the time free for you to be doing other work for people who will choose to afford you or for marketing your own business for the right sort of clients. If you cannot agree a price with this client it helps you to understand who your ideal client is, one who is happy to pay what your services and skills are worth to their business.
Not everyone wants cheap. Never assume that. But also take the time to work out what you are worth. Get some help with that if needs be.
If your price seems somewhat top end to you and you fear your client may not choose to afford that this time, what help could you offer them which would make it easy to pay you? Instalments and payment plans for example. Or doing the work over a period of some weeks and months which fits with their cash flow. There’s more than one way to make this work.
Pricing isn’t simply a matter of over or under egging the pudding. There is a bit of a science to it, some questions you can ask to clarify the brief and the budget and some creative ways you can still find a good match and get the contract. And if it doesn’t work this time, there’s plenty more work out there. Stay abundant and use this opportunity to get comfy discussing the thorny subject of money. Your client may be relieved its all out in the open. Asking you to quote didn’t mean all financial negotiations have to be guesswork happening behind closed doors. It isn’t a sealed bid. It isn’t a test.
In the end it comes down to the value you create and your own concept of what you are worth. Both grow with time and experience.