Don’t sell yourself short: Know your value. How to make more money doing the same amount of work.Posted Tuesday, November 8, 2022
Think like a boss. Define what you do.
As a Contractor, you’re your own boss. When you think about what you do, think like a boss. Don’t fall into the trap of comparing what you do to an employee role, because as the boss of you, you’re now a business serving a particular audience.
A job title is a good start but it isn’t a definition of the services you provide.
Start to establish your personal brand definition by asking:
- What service do you offer? (e.g. Software Development)
- Is there a sub-set of development you specialise in? (e.g. Software development for the financial services industry)
- Think about the clients you want to provide your service to. (e.g. Multinational Companies or SMEs (each has discrete buying power and price points)
- Think about which department you are selling to. (e.g. Are you selling to upper or middle management? Company founders?)
- Who else provides this service? If you were a software developer specializing in financial services, focusing on multinational companies in Ireland, who would be your competition?
- What do the people who do what you do call themselves? Think about independent professionals in your field you respect and consider successful. What do they focus on? What services do they provide? What strengths do you share with them? You may even consider reaching out directly to some for advice.
Make sure you’re charging what you’re worth
While there’s less scope here for fixed term contractors on daily/hourly rates, it’s still worth making sure you’re not agreeing to payment terms that are below market value. Check job boards and talk to colleagues to get an idea of the going rate for your skillset.
You should always know what your skill set is worth per hour. Benchmark yourself against others in your industry. You’ll find plenty of information on day rates in our sector analyses in Ireland’s Project Economy 2022. A simple Google search of salary surveys will also help.
Talk to others in your industry, recruitment consultants and even current clients. Asking current clients questions such as “What’s your budget?” or “What are your expectations of what you would pay?” can be helpful. Connect with professional associations and network with other independent consultants in your field. Rates don’t have to be specific; your research is meant to help you find a range of rates
For freelancers and others who charge by project or outcome, make sure you’re pricing the ‘value’ of what you do. Never look at a job and say, that’ll take me 10 hours and at €1 an hour that’ll be €10. Look at the job and say “only because of my X years’ of training and my Y years’ of experience, I’m capable of doing that in 10 hours, but I’m not going to charge you for the time it takes me, I’m going to charge you for the time it saves you. The cost for that work is €50”.
Understand that people buy your skill because it will solve a problem, fix an issue or allow them to do something better, or more profitably. Understand their driver for asking you to do this work. And use that.
James Ashford’s book ‘Selling to Serve’ has a lot of content on pricing. It’s aimed at accountants and bookkeepers, but so much of it is relevant across all businesses. Jon Brooks also has some good pricing theory. He’s focused on recruitment agencies, but if you’re delivering a service, there are some great nuggets in there for you too.
Manage scope creep
We all know what it is. It’s the little bits and pieces added onto the job that will take extra effort, or time or increase risk. Because you’ve already agreed a fee, and you hate having discussions about price, you think, ‘ah, I’ll just do that so the client is happy and it’s a good fee I’m getting anyway’.
NO! DON’T DO THAT!
You’re under-valuing yourself and you’re teaching your client bad habits.
When was the last time you went to the supermarket, filled up your trolley and paid €150 for everything in your trolley? You’re just about to walk out the door and you remember you forgot the butter… and the eggs… and the jam. So you run back, grab them and throw them in your shopping bags. It’s okay to take these few extra bits and not pay, because I’ve already paid €150, right? Most supermarkets would call that theft.
If your client wants to put more in their trolley of products/services you’re providing, be confident to say ‘Yes, no problem. I can do that. Let me take a look at what extra work is involved and I’ll let you know how that changes the price’.
Don’t work for free.
Now, how are you going to make sure you take action? You are the only person earning money for you. Make sure you’re not leaving anything behind.