Are you undercharging for your services? It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. It can be hard to decide on a rate – charging too much and you potentially scare off customers but charging too little and you barely scrape by each week.
With rising costs across everything, it may be time to rethink your pricing.
Here are five signs that you might not be charging enough:
- Nobody ever questions your quotes – Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal.
Another indicator here is when you are spending a lot of time completing their work but the cost per hour charge does not add up.
For example – a client that is paying $300 for you to complete a project for them this week. It might seem like it’s fair.. but if you spent 25 hours to finish it, that would only work out to $12 an hour!
- You are run off your feet but you can’t afford to get help – When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you? That’s a big sign that your prices are too low – and something needs to change or your business will never grow.
- Your prices have been the same for two years or more – In most industries, prices increase just slightly each year. Leaving your prices flat for too long means you’re not keeping up with the market. Make sure you review your fees annually to stay competitive.
- You’re overbooked – When business is booming and there’s no room for new clients, it’s time to raise your prices.
- Clients don’t treat you as well as they should – When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time or services as something valuable, so they feel free to mess you around. Accepting a lower charge signals to them that you are willing to accept the low pay because you don’t have other options.
What should you be charging?
Finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates.
We can help with this – if we have clients in similar industries, we might be able to give you some indication of typical fees, so give us a call or drop us a note. We’d love to hear from you.
