Do’s & Don’ts of Charging What You’re Worth

In response to a recent column several reputable independent contractors wrote to say that covering your costs and charging what you’re worth is not “nickel and dining” your client. We couldn’t agree more!! One of the most common reasons small and home-based businesses struggle is that they chronically undercharge. Don’t make that mistake.

• Don’t discount your prices for fear of not getting enough business or feel embarrassed to openly charge a fair fee for what you offer. Establish yourself in a specialty where you can excel at what offer and charge accordingly.
• Don’t forget to cover your out-of-pocket expenses direct and your indirect costs for overhead and benefits in the fee you quote. Take advertising costs, office expenses, travel, health insurance, vacation and sick leave and retirement benefits into consideration when setting your fees.
• Don’t forget you need to add on a reasonable profit so you can expand and grow your business.You can both charge what you’re worth and never leave customers feeling like they’ve been nickel and dimed.

Do quote fees openly and clearly upfront and get agreement, preferably in writing before starting to work.

• Do explain the way you work so the customer concludes why  to do the work in a ‘cheaper’ way actually would be expensive and not achieve what they want.
• Do calculate all costs and profit in any fixed fee you quote.  Or if you will be charging a fixed hourly fee plus costs, make that clear up front at well.
• Do let a prospective client know beforehand if you will be charging a fee for your sales call, initial consultation or proposal development. Don’t surprise them with a bill.
• Do discuss any possible additional cost increases that you foresee arising with your clients and obtain their authorization before proceeding.

Never sell yourself short. Value what you provide. But, remember, the only surprise your clients should have when they get the bill is what an outstanding product or service they got for the agreed upon price. Adapted from an earlier Costco column

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