How to Charge What You're Worth
If you're like most mompreneurs, you've spent at least some time pondering how to charge what you're worth. Today's guest post highlights what to focus on to make sure you're getting what you deserve. Tuesday, April 4, 2017, was Equal Pay Day in the United States. This date represents how far into the year women must work to earn what men earned in the previous year. Equal Pay Day was started by the National Committee on Pay Equity (NCPE) in 1996 to highlight the gap between men's and women's wages. In 1963, President John F. Kennedy signed the Equal Pay Law, which makes it illegal to pay women less than men for the same job based on gender. At that time women were paid 59% of men’s wages. In 2000, women were paid 74% of men's wages. And a 2016 study shows that white, non-Hispanic women make 83%, Black women make 66%, and Hispanic women make 60% of men’s wages Although there has been progress, it’s clear we still have a long way to go.
Close the Gap for Yourself
Why don’t women charge what they are worth? FEAR. Fear that they won’t get the work if they price too high. Fear that they are not worth it. Fear that if I say, “My rate is $150 an hour,” the client will laugh in my face. STOP right now and repeat after me: I earned it.I deserve it.I am worth it. When you have your own business, you are in a unique position to close the pay gap. On Equal Pay Day, I posted the statistics above in my Facebook Group. One of my members posted, “Working for myself has helped me personally bridge the pay gap. I’m in a field dominated by men, but can charge the same as them for the same work. I hope more women can find this path to equality!” A similar gap exists in leadership. Although women hold 52% of professional level jobs in America, they are only 14.6% of executive officers, 8.1% of top earners, and 4.6% of Fortune 500 CEOs. Women have a vested interest in changing the ratio of women leaders. Do you remember the Golden Rule? “He who has the gold makes the rules.” The pay gap and the leadership gap are intimately linked. Don’t we really owe it to our sisters to do our part to close these gaps? Don’t we really owe it to ourselves?
What Does It Take?
1. PreparationDo your homework and understand the implications of your rates. How do they compare with the competition? A higher rate may lengthen the sales cycle. A lower rate may leave money on the table. Do some benchmarking. Consider how to price your professional offerings. 2. Set Your RateBe deliberate about setting your rate. If you have no idea where to start, 80% of the independent consultants out there charge $150/hour. Now you have a starting point. Be confident. Be deliberate. Don’t appear desperate (even when you feel desperate). 3. Role Play Your Pricing DiscussionPrepare ahead for pricing discussions and questions about your rates. Role play answering these questions so you project confidence. Do it with your partner, your kids or even your dog. If nothing else, look at yourself in the rear-view mirror of your car before you go into the meeting. This is why it's so important to role play your pricing discussion. I can’t stress this enough. If you don’t practice it, you may not sound confident. And the first time you’re feeling desperate about landing a project you may find yourself spitting out a lower number and leaving money on the table. You’ll be kicking yourself for long time.
Keep in Mind
It doesn’t pay the mortgage or the health insurance or the college tuition. Smart people with good ideas will come out of the woodwork looking for your free expert help. Make a rule now that you will never work for free. That doesn’t mean you can’t skim a business plan for a buddy or bounce around ideas over a glass of wine. But never do real work for free. Make that a rule and stick to it. I promise you will thank me.
If people want to monopolize your capacity, they should pay more not less. If you want FedEx overnight, do you pay less? Of course not, you pay more.
Value pricing and performance bonuses can offer a lucrative upside. Equity trade can also offer some upside but never work for all equity. Always require at least 2/3 cash payment for your services. In the early days of my business, I didn’t charge enough. I was afraid that I wouldn’t win the business if my price was too high. Once I finally start charging what I was worth, my clients never batted an eye. Just think of all that money I left on the table. STOP right now and write this on a sticky note: I earned it.I deserve it.I am worth it. Put it on your monitor or your bathroom mirror or your phone case and say it every day until you believe it. Confidence is more important than research. Your only finite resource is your time. It’s precious, you can’t warehouse it, and you can’t make more of it. Start charging what you are worth and do it now!
Where do you stand with your pricing? Share your comments below.