A common rookie mistake I’ve seen many creative service-based entrepreneurs make is insufficiently charge their clients! It’s surprising how shocked people are when they recognize the value of their work doesn’t correspond to their income goals. I’ve recognized that we tend to not gravitate our full attention to finances when it comes to our services. Here are 3 signs you’re undercharging for your services and need to make a move on focusing on your monthly goals and targeting better clients.
1. You have to take on too many clients to hit your monthly income goals
Based on the amount of money you want to accumulate, take into account how many clients you attract and the volume of work. Try to refrain from concentrating on what you THINK people want to pay and focus on how much you WANT to make. It’s vital that you think realistically in order to execute well for your clients.
By simply using an ROI calculator you can have a tool that helps you avoid undercharging for your services. If you put into perspective how much time it takes to finish and the value of that service, your pricing should reflect both the time and effort. If the cost of service doesn’t reach your monthly income goal based on the amount of clients you have, you’re most definitely undercharging!
2. You can’t support yourself financially based on the income of the service you offer
Profitability is the lifeline that supports whether a company will be able to grow it’s business and be able to survive. If you can’t afford to live off the income you make based on your services, you’re undercharging! Relying on the income of family members such as your parents, significant other, or friends is not strategical. It’s essential that your business is profitable in order to display that you can make a living from your work. You can’t get to profitability if you’re undercharging!
3. Attracting difficult clients who you dread
If you happen to come across difficult and demanding clients, prepare for them to walk all over you! 9 times out of 10 a tough client is someone who you’re undercharging. Even worse, the work you do for them is time consuming and draining. When people correlate price to value they don’t take into account it’s worth. Make sure you’re focusing your energy towards those who will cherish your services and won’t constantly take you for granted.