Is It Time to Reconsider Your Fees?

by Chris King

I was delighted with my freelance living in 2007. Others were telling me what a "bad year" it was for them - less work, less money, and hard times. With my "portfolio career" of seven different part-time careers, I was always busy and making enough money to cover expenses - so busy that I even quit one of my part-time jobs. I enjoyed everything I did and everyday so much that I felt like a success.

That was until the woman who prepares my taxes pointed out that, on paper, I had not made a profit - again. This happened because with all of the different careers, I spent most of what I earned on business expenses. She correctly pointed out that it is time for me to make a profit - and not by reducing my expenses, but by increasing my fees. In the following article, I will address the area of fees - what and how I am learning about earning enough - for free agents, independent professionals and freelancers.

Even if we love what we do, we need to earn a living. As I mentioned in the introduction, I was delighted with 2007- I loved what I did and was comfortable. I realize now, however, to get ahead - and not to have the IRS think that what I am doing is a "hobby" - I need to re-evaluate my fee structure. As Dana Cassell writes in her excellent book How to Set Your Fees as a Freelancer or Independent Consultant, "One of the most important questions you'll face as a freelancer or consultant is how much to charge for your work. Too high, and you could price yourself out of business; too low, and you'll be cheating yourself. This clearly requires some thought." In her informative book, veteran freelancer Cassell gives you the benefit of her experience, packing pricing formulas and strategies, tips, and live links to additional resources in this concise yet indispensable guide to help arm you with the information and insider wisdom you'll need to maximize your earning potential. I have purchased this immediately downloadable book, and have revised my pricing already.

You are worth more than you think you are!
These are the words my tax preparer said, and I am sure that it is probably true of many free agents, independent professionals and freelancers. I feel that we often don't appreciate how "good" we are at what we do. We don't consider our background experience, our education and the time we have taken to get to our level of expertise. We are afraid that when we tell a prospective client what we charge, they will gasp and run the other way. Some will, but I have actually found that many feel that, "You get what you pay for." If we price our services too low, we may be downgrading our credibility. A lot of freelancers I know who have started charging more than before, because of time constraints, have found that they are hired even more often after the fee hike. We all just need the courage to "do it."

There are many different ways to figure how to set our fees.
When we are setting fees there are several different approaches, from hourly rates, project rates and one time fees (for example: for a workshop, presentation, special report, e-book or tele-seminar). And, if you have several different careers as I do, you may set different levels for the different types of jobs. For example, I can charge quite a bit more for my web design and development than for the fitness classes I teach and the storytelling programs I do. In this case, I must consider the "going rate." Unfortunately, as a speaker I can charge more than double what I do as a storyteller - this is due to client perception and the type of client who is doing the hiring. I always consider the client, especially in the area of web design, desktop publishing and writing. If it is a group - my niche market is small businesses and non-profits - that is struggling and will give me great exposure and testimonials, I charge less than if I were working with a huge corporation. This is an area where I need to reconsider charging the smaller groups more and revise my whole fee structure.

Be strong enough to turn down a job even when you need the money. We've all been there. Times are tough, and we aren't sure where the next paycheck is coming from. We are offered a job that will be long on hours, but short on pay. I know how hard it is to say, "No." But, all I can say is that it is not a good idea to compromise yourself or your fees in times of panic. If we are patient and believe that the work will come (and, of course, we are constantly marketing ourselves so potential clients know about us and what great stuff we do), it will. I know this from experience.
So, reconsider your fees. Charge what you are worth. And have a happy tax preparer for your 2002 taxes. I plan to!

Epilogue: It is now 2004 as I review and re-feature this article. Yes! I did make my tax preparer happy by showing a profit in both 2002 and 2003 (and, even though this means a payback to the government, I plan to have another profitable year, this year).


P.S. Please send me questions and ideas for future articles. Or any other FEEDBACK for that matter!

 

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