Why is talking about money so excruciating? As much as we say, “it’s just business,” there’s a lot more behind that little dollar sign than we’d like to admit.
Talking about money can leave us feeling guilty because we think we’re charging too much, frustrated because we feel we’re charging too little, or we’re resentful because we’re being asked for discounts or extras. How can we take the emotion out of money matters and bill like a boss?
Knowledge is Power
It’s important to take the time to understand how we provide value to our customers. Without this knowledge, it’s hard not to think about what we charge them as anything more than arbitrary, a means to an end. If we don’t know what our customer truly wants or needs, then why should they choose us over one of our contemporaries? If we don’t know what goes into our business expenses or what the market looks like then we can’t control the longevity of our business. While it might hurt a little to get down into the nitty gritty of pricing, ultimately this knowledge will help us take control of our financial situation and feel comfortable talking about money with our clients.
Know Your Worth
Your pricing tells a story that helps your client trust you and positions you relative to their world view. When you see a car being sold at a lower price than expected, you may wonder what’s wrong with it. In the same way, pricing yourself too low can make your customers uncomfortable and it can devalue your credibility. That being said, it’s important to give yourself credit where credit is due. What do you provide your client? Are you a service or a solution? While your time is an important consideration to make, you aren’t just selling hours, you’re fixing a problem with your years of experience and effort. All of that counts for something.
Know Your Money Mindset
Many people have a complicated relationship with money. Often it’s dictated from their childhood or even events that happened later on in their life regarding their finances. The result can be living with a scarcity mindset that can lead to anxiety around spending anything or overspending as soon as there’s money to be had. While this can be frustrating to untangle in the average person’s budget, it’s important for freelancers to take a hard look at how they regard money as they plan their business. That scarcity mindset can cause us to devalue ourselves by setting our prices too low in an effort to secure clients or throwing in extras we will spend our personal time delivering in an effort to keep them. While this may seem to work for a little while, it can ultimately lead to burnout.
Instead, we want to try to shift that mindset toward abundance. A person with an abundant mindset knows their value and invests in it. They take responsibility over their finances by setting reasonable limitations and know that there’s plenty of work for themselves and their competitors. Ultimately these things lead to confidence that your clients can feel.
Know Your Customer
What do they really want? What is the pain point that they’re finding and the reason behind their concerns? They may say they want a website, but they may mean more than that. Could a better website mean more revenue or clients? What is the value of that to them?
Getting to the heart of what your client’s needs are, can help you understand how to best serve them, but it also shifts your clients focus away from price. Ultimately if your service allows them to achieve more, what is that worth to them? Probably a lot. It can also get them excited to start fixing the problem they didn’t realize was such a concern. By asking questions, you’ve turned yourself from an expense to an investment.
Know Your Numbers
It’s not all emotional, it’s time to look at the cold, hard facts.
What do your materials cost? What’s the cost of your overhead? What is your cost of living? How much do you want or need to be working? How many projects can you responsibly handle? What’s the standard expected in the market I’m in? While it can seem overwhelming, when you take a look at those concrete numbers you can begin to see the real scope of your potential workload.
Knowing your value and how your business provides that specifically can also take the sting out of comparison. The value you provide is different than the value your competitors offer, and the clients are likely different as well.
Other Things to Consider
Revisions & Extra Work
It happens, you show a finished concept and the client wants some adjustments. Sometimes though, clients can get picky. Is the customer always right? To a point. Making adjustment after adjustment can be time consuming and wear you down after a while. Your time is valuable. Try to outline what is expected regarding revisions ahead of time. Is there an extra cost or a cap after a certain point? Try to get your client to have a clear idea during your first round of adjustments so you can move your projects along swiftly.
What about additional client requests? Your client may feel it’s just part of the project while, it’s really something you hadn’t discussed. While it may seem like it’s not a big deal, it’s important that you are compensated for all of your work. It’s prudent to have a clause in your statement of work that addresses how additional work, outside your original agreement is to be billed.
Boundaries & Downtime
When you’re freelancing there’s an illusion that all hours can be work hours. However, that’s not necessarily balanced. While there will be times you may have to work late into the night, sectioning off time specifically allocated for work is healthy. It’s also important that your clients understand these boundaries, that way they know when to expect you to interact with them and no one gets burnt out or frustrated.
Speaking of burnout, freelancers are allowed to take vacations. You may even need a personal day now and again. That’s ok! This may be something you have to plan in advance in your budget, but it’s important to have that wiggle room so you can keep providing your clients the exemplary work they deserve. While you should be mindful of any looming deadlines or obligations, generally, when you’re transparent with your clients about your needs, everyone benefits.
When you step back and evaluate your approach to billing you may find there’s more stability to be had. You deserve every cent you make! Take control of your pricing structure by assessing your value, asking your clients thoughtful questions and being transparent about what’s expected. These principles will help you find your confidence and be assertive when it comes to discussing money matters with your clients.