One of the many challenges I have faced in the last couple of years as an entrepreneur is setting a rate that is both beneficial to me and affordable to the clients I hope to work with, and from countless of conversations with others in similar industries, I’m not alone. “What should I charge?” “Is this project worth X amount?” Money makes a lot of people uncomfortable and it seems entrepreneurs in creative professions are experiencing higher rates of discomfort when it comes to money.
This discomfort then leads to a huge disparity between what one person charges for the same project another would. Not only is this causing issues for those setting their own rates, it’s also leading businesses who seek out the services of these entrepreneurs to severely undercut the value of what’s being delivered. The phrase that irks me most from prospective clients—and it happens often—is “I could get X for [insert insanely cheap cost here] somewhere else.” Or another fan favorite, “my wife’s boss’s nephew said he could do it for free, can you?”
While I’m all for negotiations in getting the best value for the cost you’re paying, it’s insulting to the people who are skilled in the work they do, so much so as to make an entire living out of it, for a person to come along and say what is being offered isn’t of value to them. Which leads to the worst problem of all: entrepreneurs who listen and eventually slash their prices to accommodate to these people just to get some money in the door.
This ultimately causes the service as a whole being devalued. The reason why a prospective client is able to ask for a logo design for $20 is because someone along the way has delivered it for that cost. It’s understandable if you’re just entering the market, trying to break through and make a name for yourself, or have little experience that you charge a lower rate. However, for those who have been working for years and have refined their craft, your prices need to reflect that. Not only does this help you earn your value, it allows the market path to be paved with better rates for those who follow in your footsteps.
The race to the bottom does not have benefits. If you’re experiencing issues with getting potential clients to pay your rate, there are a few things you can do:
Educate them – Even though it can be uncomfortable explaining why you deserve a fair rate, some people don’t actually understand what that entails. “Yes, Joe Schmoe can provide you a logo design for $10, however as a person with 7+ years of experience with graphic design and branding, I can create a concept that speaks directly to your target audience and represent your business in the best way possible.” Think of it this way, a steak is a steak, but do you really want to get that T-bone at a truck stop or from a place with a Michelin rating? You get what you pay for.
Stand your ground – I believe that many people convince themselves they need every possible client who approaches them, so to ensure they get the work, they agree to prices well below their means. If your rates are researched and in line with market value, Stand. Your. Ground. I firmly believe people who try and nickel and dime every transaction and drive your price down to a fraction of what it’s worth will be the most difficult clients to work with. And at the end of the day, is that price cut really worth the extra time you’ll spend on the countless iterations from your difficult client? If a client is going to be challenging, make sure you’re getting paid for it.
Get off Fiverr, Upwork, etc. – You’re literally competing with others to see who can charge less.
Walk away – Unless you truly need money to get by and pay bills, if all of the above don’t work and a potential client is still trying to underpay you, it’s time to throw in the towel. This one is very difficult because turning down money, even if it’s only a little, can still be hard. However, think of it like this. By saying no to low paying jobs, you’re creating space and time for better ones to come along.
BONUS – Have OPEN conversations with others in your industry about rates. Being shy about income is for the birds.
With such a huge shift of people making the transition to an entrepreneurial lifestyle, let’s all work together to make sure we’re creating a space that allows us all to thrive. And let’s not forget, community over competition, y’all.