You’re ready to start moving on that big bold dream of yours.

YAY!!

You have a potential client lined up, but you don’t know what to charge.
Or should you even charge yet? I mean, you have no experience!
And how awkward is the conversation about rates? You don’t want to scare them away, but should you really be doing work for free?

The short answer is NO. You should not be doing work for free. Not now, not ever.

You can, however, redefine what you consider payment.

If you’re just not ready to set rates to your service,
then make sure you get value in another form.

This can be anything from credits for work in a publication you love to haircuts for you and your family. If you’re working with another entrepreneur, maybe you can exchange services. If you’re working with a small business, they can pay you in the form of credit for their products or services (um, free restaurant food? Hell YES!).

So how do you know if it’s a fair and valuable exchange?

• Know the value of their offering. If you’re providing a service that would cost them $150 with anyone else, then what you get in return should have a comparable value. So maybe instead of one haircut, you get two or three in exchange for your mini session.
• Does the exchange actually bring value into your life? What I mean by this is, does the service or product you get in return actually bring value to your life? Maybe a client wants to exchange for tax preparation services, but if your husband is a CPA then this exchange doesn’t actually bring value to your life.
• Do you feel happy about the exchange? Both parties should be amped to work together, and should feel comfortable about the values being exchanged. If you’re not happy with it, figure out what needs to change to make you happy. You don’t want to go into any project with bitterness or uncomfortable feelings!
• Is the project something that can benefit your business? When doing any sort of exchange, I also try to make it something that fits with my business goals. If you’re a photographer wanting to break into newborns, then exchanging for a newborn session will bring more value than doing a product shoot. Align the project with your business goals and you’ll be even happier about the arrangement!
• Does the arrangement warm your heart? Sometimes, you do things just because it’s a kind and loving thing to do for someone in need. My suggestion is that if you do a project purely to help someone in need, do it for free. These are not business arrangements, they are loving gestures to fellow humans. Putting some sort of value on it will only make it ‘business-y’.

Doing projects and taking on clients with alternative arrangements like bartering can be a great way to gain confidence in your value. You get client feedback, you build a portfolio of work, and you gain professional experience that will make you more confident about setting a dollar value.

When you begin to set a price to your services (which I recommend doing as soon as possible!), do some research to get a feel for ranges. Some tips for finding your rates:

• Be realistic about your expertise level. If you’re in the first year of business, don’t compare your offerings to someone who’s been in the game for 10 years. Compare the quality of work delivered, the level of experience, and the success of the other person (at least what you can gather online).
• Research for your geographical area. Markets can vary widely from city to city, state to state, and country to country. Get familiar with your local market. Reach out to fellow pros to see if they can offer any insight. Ask potential clients the price ranges that they’ve seen during their search for a service provider.
• Plan for growth. Don’t get discouraged if your rates feel low compared to seasoned pros. You should be constantly re-evaluating your rates as your business grows! Sometimes this means increasing with each new client. Sometimes this means increasing once a year. Just know that your rates in 3 years should be very different from your rates now. There is no shame in starting at a rate that makes you comfortable and growing from there!
• Check out this piece about how to find your rates.

So when do you know it’s time to RAISE your rates?

• When you’re more knowledgeable about rates for comparable pros. As you gain experience and connections, you’ll learn more about the sort of rates that others charge. These will give you a baseline to compare yours, and from there you can decide how you want to compare.
• When you’re getting frustrated because you work, work, work and barely make ends meet. When this happens, you either need to streamline your processes to decrease your time for each client, or you need to raise rates to compensate for how much time each client takes up. There’s just no other way around this unless you want to outsource (which you probably can’t do at that point because you’re struggling).
• When your business growth feels stagnant. Maybe you have happy clients and things are humming along, or maybe you’re doing okay work but aren’t feeling fulfilled. These are good moments to take things to the next level. There’s a big feeing of risk involved with this type of move, but it’s absolutely necessary if you want to move your business up a level and keep growing. Growth can be anything from being able to afford to hire staff to changing your clientele to a higher price point (less projects at higher price points) so you can work a bit less hours and have more life balance.
• When your business is declining. This one is tricky, because it just depends on the situation. Often, though, when things just aren’t clicking for your business, it may be that you’re not committing to any one audience. You’re speaking to many people and your price point is neither here nor there. You have two routes to take - either you grow on volume or you grow on quality. This means that either you capture the price-shopping crowd and streamline your process so that you can quickly handle as many clients as possible, or you capture the high-end market that may be more difficult to reach but results in less projects that are much higher price point. Use this simple exercise and diagram to help give you clarity.

So there you go! Step-by-step advice on how to begin charging clients when you’re not confident, how to figure out what you should charge, and how to know when you should raise your rates.

I’d love to hear about how these work for you! Drop me a line to let me know.

xo
Natalia