It is April. The days are getting longer – we are going to work in the light and coming home in the light. The spring flowers are wonderful, the tree blossom is fantastic and we are all looking forward to Easter Eggs and Easter Bunnies. The children are already on holiday and if you are a working Mum you are juggling all the usual chores, all the pressures of a new tax year and child care. Or maybe you are a working Dad taking your share of this busy three weeks.
So, with all these different roles; all these different skills you are exercising; all the business demands you are meeting how do you value your time?
If you work for someone else, it is easy they assess the value of the job; they assess your skills and make a bargain to pay you £X. Ever thought how much that is an hour? Go on do the maths: divide your annual salary by 52 and then by 5 and then by 8. Then plus that figure up by 15% to cover NI, employee benefits, pension contributions, office costs etc. 15% might not be enough!
Now ask yourself are you delivering the results to justify that figure? Are you giving a full hour’s work in return for that pay? How would you improve yourself to be worth more? Do it and then renegotiate!
This is all quite straight forward if you are an employee – just do it every year to check out where you are.
What if you work for yourself? I find my clients can do the maths so far but then when it comes to putting that value on their time to invoice it they have a real blockage. It is more like find a number and then half it and take off a further 10%. Yes, I can bring myself to ask for that and the client might pay it.
So, when I ask why were you/are you worth that to someone else but not now you work for yourself I hear all sorts of answers. Like:
- It’s what the industry pays
- It’s what the competition pays
- It’s the rate for the job
- It is laid down by the trades union
- It is laid down by the professional association
- It is what the margins justify
- I am not the one doing the asking
- My skills were quite rare and my boss knows that
- I was quite good at what I did
Now put your previous hourly rate alongside the level of experience you currently have. Experience means that you work faster than an apprentice, a trainee or someone newly qualified. You solve problems differently because you have solved them before; you avoid expensive mistakes and pitfalls. You are a seasoned professional so you can find answers and create solutions that a newbie cannot. Clients pay more for creative solutions whether it is the design of a building, an elegant website or a gorgeously iced cake. And maybe because you work for yourself you work more consistently – for more of the 60 minutes in that hour.
So, be objective, these are the factors that dictate how you value a person’s time. Put a value on your working hour. I doubt very much that it is less than £50.
The next task and the most difficult one is to believe it. What happens if you don’t believe it – you undercharge. And what happens then? It becomes easy to find customers; they are pleased with your (bargain) work and your (rock bottom) prices so you get very busy; but you do not make any real money. You are then trapped: you think if you put your prices up you will no longer be busy but if you do not take the risk you will never make decent money. So, what do you do?
My job is to get you to think about this. And to get you to believe that you are worth the right figure and then to use it as you calculate your prices. This can be quite tricky as most self-employed business people think that other business people buy only on price. The truth is we do not. When we buy, we evaluate:
- Will this do what I want?
- The quality of the product – how durable is it? How long will it last? How robust is it? How much maintenance will it need?
- Is this good value?
- How creative is it? Is it ahead of the game or behind it?
- Does it give me more features than I originally thought I wanted?
- Will I get delivery when I want it and how I want it?
- How will it make me feel? Do I feel this is quality or bargain basement?
- Am I forming a long-term relationship with this supplier? And if so, is this an outfit with whom I want a long-term relationship.
If we only bought on price why did Woolworth fold and why are John Lewis a huge success?
And what makes your business any different? Only how you feel about it. Often my job is to help clients believe in themselves and what they do. Once you believe you can ask for your price confidently and get it.
So, this April ask yourself whether you would employ you? Are you good at what you do? If yes, why undersell yourself? Give your clients an opportunity to understand how good you are and what a great bargain they are getting for their money. Remember clients are as suspicious of something that is too cheap as they would be if something is too expensive.
None of this is original. We instinctively know about worth. We are good at putting a price on a product until it comes to ourselves. Do not fall into the trap of undervaluing yourself – your work is good quality and worthy of a good price. Good work is never expensive; but always good value.
If this has been interesting, please share it. If you are thinking of working with a mentor, please chat with me about what you are hoping to achieve. I might be the right person for you or I can help you find someone who is. In the meantime, life is good; let’s live it to the full and be the best we can be.