How Do I Determine How Much to Charge?

How Do I Determine How Much to Charge?
There really is no easy answer for this question. The best advice is
to research what at-home workers in your geographic area are
charging for services similar to those you intend on offering, and
then determine what pricing strategy works best for you.
Don't Underprice Yourself!
Consumers today are savvy enough that price is generally regarded as
equated to quality, that is, the more you pay for something, the
better the quality is expected to be. If you think that a strategy
of underpricing your services will be a sure way of bringing in more
business than you can handle, think again. Consumers are likely to
consider services that are priced well below the average for the
same or similar services is an indication that your services are
inferior to those of your peers or that the product you have to
offer is not of good quality.
On the other hand, don't adopt a policy of charging the highest rate
you find when you do your research. You must definitely consider
your geographic location, who is likely to contract with you to
provide your services, and generally "what the market will bear" in
your area.
Set your rates somewhere comfortably in the mid-range of what you
find being charged for the services you are going to offer. If you
find that work is coming in, and keeps coming in, then you can post
a rate increase at some reasonable time interval. If no work comes
in at all, you can offer reduced rates for a limited time to attract
business.
By setting your rates mid-range, you have some negotiation room for
contracting with a client who wants to hire you, but hesitates
because of the price. You can be a hero and offer a one-time
reduction of your rates in order to accommodate your client's
budget. You might be able to get the job, and then convince the
client to continue to use your services at your regular rates.
Review Your Rates on a Regular Basis
Don't make the mistake of never raising your rates! At some regular
interval, you should review your rates and increase one or all of
your rates, according to the current economy.
If you allow yourself to get into a situation with any client for
whom you've worked for more than two years (or more) and have never
raised your rates, you might find it very hard to explain to them
why you are suddenly raising your rates 30% in year four of your
relationship. Better to raise your rates some small percentage every
year and keep pace with the economy than to risk losing the client
because suddenly you find yourself working at a loss (or at no
profit) and need a drastic rate hike to compensate.
Should I Require a Deposit or a Down Payment?
Generally, if you are contracting with a known business entity that
has been in business and has an established history (either in the
community, the state, or nation), then a deposit probably is not
required (and may be a deal breaker when it comes to landing the
client).
If you are contracting with an individual (that is, providing a
service to a non-business entity), and getting paid is going to be a
matter of getting a personal check, then you might want to request a
small deposit and explain that you will not commence providing the
service until the deposit has been received. Even if you ask for
$10, you are getting your prospective client to commit to paying
you. (My personal rule of thumb is that if an individual balks at
sending a deposit, then this is someone who might just end up not
paying me at all.) This is strictly a matter of personal preference
and judgment. It is your business, you must run it as you see fit.
How Will I Know When I Will Get Paid?
Being paid, how and when, should be something that is addressed in
your first contact with the client. Get a clear explanation of how
payment is going to be made, make note of it in your records, and
then ask your client to confirm the process.
If you are working for a large company, you will likely have to wait
out their normal accounts payable processing cycle. If you are
working for an individual, especially if another at-home worker has
subcontracted work to you, you might have to wait for your client to
be paid by the end client before you can be paid.
These scenarios should be addressed during your first conversations
with a prospective client. Don't be shy about having the "How will I
get paid?" discussion! Handle it in a business-like manner, and
before you accept the job, be sure both you and the client have a
clear understanding about when the work will be done, how much it
will cost, and when you will be paid. I prefer to tell a prospective
client what my expectations are for being paid, rather than to ask
them how they plan on paying me. The discussion continues on until I
have a clear outlook on how and when payment will be made.
Things to Remember When Deciding How Much to Charge
Research the market. What are your peers charging for the same or
similar services?
Set your prices at mid-range, and then adjust them accordingly
Review your rates on a regular basis, and increase your rates if/as
supported by the economy
Have the "How will I get paid?" discussion with every prospective
client prior to agreeing to do the workJan K., The Proofer is freelance proofreader and copyeditor. Visit
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