Though some people go into business because they have a great idea for a new product, if not an entire line, many entrepreneurs make a wonderful living by providing services instead. These are the plumbers, web designers, landscapers, and online marketers of the world.
While it’s great to do what you love for a living and help others along the way, many of these service-based professionals struggle with setting their rates. After all, if you price too high, no one will want to hire you. But if you price too low, either you’re getting the jobs no one else wants or you’re working all day and night to barely support your family.
One way to avoid either of these scenarios is to put yourself in a position where you actually command higher rates as a service provider, and here’s how.
#1: Specialize, Specialize, Specialize
Have you ever noticed that, when you go to your family doctor, the rates tend to be much lower than when you see a specialist? That’s because people are willing to pay more to go to someone with the exact knowledge needed to solve whatever medical issue they have.
Well, the same is true in other types of business as well. The more specialized you are in your field—the more you know about your particular niche—the more you can charge for your services because you have knowledge others don’t have.
If you don’t yet have a niche, business management expert Chris Ducker recommends that you conduct keyword searches to see which niches have the most hits and how much competition exists in these areas. Keywords with a high number of searches but fewer results are areas you may want to specialize in.
#2: Highlight Your Expertise
The next step is to show your specialization off. “If you want to price high, you need to show the rest of the world that you are an expert, a thought-leader, and one of the best in your field,” says Russ Ruffino, founder and CEO of Clients on Demand.
Makes sense because, as we just discussed, the more knowledge you have, the more you can charge. But how do you do this?
According to Ruffino, the best way to highlight your expertise is with a 45-minute webinar. So, think about some of your customer’s biggest problems and create a webinar that provides the information needed to solve them. This makes you their go-to person for that type of issue, putting you in just the right spot to effectively close the deal.
#3: Don’t Base Your Pay on the Clock
If you currently set your prices based on an hourly rate, you may be doing yourself a big disservice financially because there are only so many hours you can work in a day. However, by changing the way you quote your prices, you can command a higher rate without changing any other aspect of how you work. All you have to do is quote per project instead.
Double Your Freelancing shares that the pros of this approach are:
- You can charge based on how much value you provide the client;
- He or she knows the exact price up front; and
- If you get the work done faster than expected, your true hourly rate can climb pretty quickly.
Just be careful that you’re clear about what your price includes (and what it doesn’t) so you don’t get stuck doing work you didn’t agree to.
When you specialize in one specific area, highlight your expertise, and quote per project instead of hourly, you can begin to command higher rates, making your price perfect for both you and your customer base.