What happens when you under-price yourself? If you’re a freelancer, a solopreneur, bad things, very bad things. Pricing is something that I struggled with for a long time. If you’re like me, a big part of the reason you do what you do is because you genuinely like helping people. You genuinely want to help everyone that comes your way. Yep, I get it. You see what their needs are and know you can contribute something to help. It’s not pleasant to have to say no. You don’t want to leave them without the help they need. You want them to be successful. It’s hard sometimes to balance out our own needs, especially when it’s either challenged indirectly or quite aggressive directly.
Having someone say to me, “your prices are too high,” used to immediately sets off a chain of self-doubt. It reaffirmed all the nagging voices telling me I wasn’t any good in my head. All of that imposter syndrome and doubt that I had about my own talents or usefulness got pulled right to the surface and instantaneously confirmed — yup, I’m not worth it.
Are you already struggling with being uncertain about what to charge or what your services or products are worth? When you’re already asking yourself, “Am I overpriced? Am I over-valuing what I can bring to someone? and then you HEAR that very thing from someone, it creates all this extra validity to what you’re already doubting in yourself.
Getting past this self-doubt trap takes time and it takes practice. Like an good battle, you have to put up strategic defenses and predict the ways you’ll need to protect yourself. So let’s get you equipped for battle.
1. Under-pricing Can Set You Up for Failure
Pricing is something I used to think a lot about. Especially for a service business and a small service business like mine, it’s so critical to the survival of the business. Here’s an example: When I first started my writing business when the pandemic hit, I switched to just taking jobs piecemeal, one by one on Upwork to maintain an income.
Between a mortgage and supporting two children on my own, I needed to keep my head above water without depleting my savings further. I was 100% in survival mode. Basically I would take anything that came my way no matter how small the price tag. Oddly enough, that turned out to be a good place to start. It gave me the worst case scenario right away.
It was the most extreme situation and it was an awful experience for this type of service business. I realized, the option didn’t even exist to undervalue myself, even if I wanted to. Even if I chose to self-martyr myself and work all the time for peanuts, it still wouldn’t have been enough to sustain myself and my family.
2. Undervalued Work Isn’t Sustainable
So I was working for peanuts, 1000 words for around $10-20 an article. And here’s the crazy part. Let’s say you did an article for $20 on Upwork. Upwork takes 20% off the top, and then self employment taxes take another 30%. 50% is gone immediately. You’re left with $10. And, that thousand word article, which you thought you could do in an hour, actually took three hours to complete. So you just made a whopping $3.33 an hour. At $3 an hour there’s not enough fucking hours in a week to survive. Guess what you’d earn at the end of that hellish week? $240.
Take a look at websites like Upwork, Freelancer, and Fiverr, (which is even NAMED for how little a rate buyers expect) and you’ll see painfully low prices all over. It’s enough to make you think it must be what everyone else is charging, it must be what you HAVE to settle for. But at that rate, it’s easy to see how quickly anyone would crash and burn in exhaustion.
One important fact to remember: Anyone can post a job with any outlandish pricing offer. It does not mean they are able to find and hire someone. It definitely does not mean they got that job successfully completed. Yes, I’m looking at you Proposed Budget $3-6 an hour seeking a licensed medical doctor for content writing. Give me a second to collect myself from ROTFL.
Whether it’s a relationship or a job, there are people that will value you and there are people that will not. No matter how much effort you put into things, their value of you will remain the same. Your job is to find the people that do value you.
3. Undervaluing Yourself Doesn’t Make You More Valuable
And the extra crazy part? Accepting these low baller rates isn’t the end. You might actually get treated worse for accepting them by the client. Add in revisions, criticism, and demands. After all, they are the customer and the customer is always right. So add insult to fucking injury. I thought I would get thanked or appreciated for charging less. Nope!! Instead, I was undervalued, underappreciated, and got repeat customers demanding more for less in less time.
4. People Will Keep Undervaluing You Until You Don’t Let Them
Business is a huge representation of our internal strengths and weaknesses. It shines a light on all the best and worst qualities of our psyche, our mindset and amplifies them.
So, if I was the person in a relationship trying to have the other person love me when it was clear that wasn’t the case and they just kept giving me less and less (read my Relationship section for those tales!), it’s likely I might be the same with my business relationships. I kept trying to win them over by giving more and more.
In those relationships, perhaps I kept giving to feel like I was worthy of their acceptance and their attention and their love. Well, the same thing was happening in business, but just in a different format with money instead of love. I don’t think there’s any coincidence there. I’m sure there’s a huge correlation between how we value ourselves with relationships, how people treat us, and how much money we earn. The struggle of valuing your time, whether it’s for a person or a project, can feel quite the same.
5. Low Prices Don’t Make You a Better Person
I never had a client say to me, “I know I was asking for so much for so little. Thank you for doing so much for so little.” Side note: Now I charge premium rates and all of my clients share their gratitude and appreciation. See the irony here?
Why didn’t they appreciate those bottom basement rates? It’s not because they were bad people. It’s because they didn’t value the work from the start. I wasn’t valuing myself and that reveals itself like a neon sigh.
Anyone in business should experience both sides as client and provider. It gives amazing insight. I’ve been the person hiring someone. And I think it’s part of human nature to value people as much as they value themselves. It’s like the classic psychological experiment of filling expensive bottles of wine with cheap bottom shelf crap and people praising its vintage. Now, I’m not suggesting you fill your work with crap and triple your prices. But it is a known part of human nature that a higher price tag has implied value. And we all could use a little more of that in our freelance endeavors.
6. Too Many Yes’s Can Kill Your Business
Getting really, really comfortable and really okay with hearing the word “no” is one of the greatest gifts you can give to yourself in business. Getting cozy with rejection is a game changer. You’ll hear stuff like “you suck,” “you’re overpriced,” “you’re not worth that.” You might even hear that awful kind of mocking laughter that makes you feel so so small (check this guys out below from my Upwork account).
But those are all beautiful things if you can hear them in the right way. And there’s two reasons for that:
- They don’t know you. None of this has ANYTHING to do with you and everything to do with them. Would you really want to work with someone who chooses to be intentionally rude or demeaning, anyway? Those no’s save you from a world of trouble because they allow inappropriate prospects to filter themselves out. That saves you time and stress from going further into the pitch process.
- A wise person once said, “If you’re getting too many yes’s, you aren’t charging enough. Seriously, think about it. Keep raising your prices until you start hearing too many no’s. Until then? Sky’s the limit, baby.
Still feeling a little nervous? It’s okay! We bring a lot of our experiences to our approach to pricing and valuing the work of ourselves and others. I can’t tell you the amount of bosses who I’ve heard laugh at people over their quotes. I joined in at times. Not proud, but that was a symptom of my own to lack of confidence. There’s a feeling of power and self-validation in it. But it’s hallow. It’s just an easy power trip.
7. Some People Will Never See Your Value (So Quit Trying to Show Them)
I recall a plumber coming by to give a quote. My parents had this shitty pipe sticking out of the wall where the tub faucet should have been. They had tried and failed to replace the faucet some years before. They were finally going to get a real tub faucet because after years I guess they finally admitted to themselves that they couldn’t do it. So a plumber to comes over, looks at it and says, “That’s going to be $500, because we’re gonna have to break out the wall, we’re gonna have to go in from the other side in the kitchen to get to it. It’s going to take probably four or five hours.”
He left. And they just laughed.
“What nerve he had asking that price!” “He was trying to get one over on us.” Don’t get me wrong, of course there are people that are asking insane amounts of money and people that prey on people. But I would say more times than not, the person is just trying to make a profit and a living. And it’s funny because I almost got conditioned to not even think that I deserved a profit through overhearing conversations like this one. I so feared being the person my parents hated, the person who thought too highly of themselves. Boy was I wrong.
What I had do was taken the lesson that there’s shame in asking for your worth and internalized it. I didn’t see my parents as the ones out of line. I didn’t see my bosses as the unreasonable ones. That was a mistake.
We’re all in this to make money. There’s no shame in that, there should just be pride. Of course there are other rewarding benefits, but at the end of the day we all need a fucking house, we all need to pay our utilities and we all deserve some extra cash to do whatever we want with. Those are fair things to ask for.
8. Being Too Nice to Others Can Hurt You
I used to balk at charging someone for little things. Something that took me maybe 20 minutes to do, I felt guilty about charging for that. I would feel guilty for saying “well if my rate is $150 an hour, and that’s 2.50 a minute times 20 minutes is 50, so that’ll be $50. It felt like I was trying to nickel and dime someone. And then I thought about it in a different way.
Let’s say there was a $20 sweater at Target. Could you pick up that sweater and walk out with it without paying for it? Would Target be okay with that? And I think that’s a huge, huge thing because Target makes fucking billions of dollars. That sweater is a blip to them. I could say to them, “That sweater won’t mean a damn thing to you. You’ll write it off as a loss. It’s a business expense. I need this sweater to stay warm and you make millions, you won’t ever notice that $20.” How well would that argument with Target go?
You know the answer without even thinking. Yet, as a small business owner, with way way lower margins, I expected myself to eat those little costs? That is, only if I think I should. As business owners, we need to approach every dollar as seriously as Target does.
9. Numbers Don’t Give Mixed Signals, People Do
So much of business comes down to simple, beautiful numbers. Numbers aren’t ambiguous, numbers aren’t up for interpretation. They just are what they are. Really leaning into those numbers can take so much of the stress, drama, and confusion out of business. They shine this beautiful light on things and tell you exactly how many hours a week you have, how much income you’ll need to make, how much business you’ll need to bring in.
How much of your product or service do you need to sell to make $100,000 after taxes? Is that quantity physically possible at your current rate? If not, you might have to raise your rates. And don’t forget to include ALL of your businesses expenses. Can you believe it took me six months to pass the cost of Upwork’s service fee on to the client. Like for six months, I ate that cost! I didn’t even tell clients that I was incurring this cost! Now, I configure my price, add in taxes and service fees and quote the client. Make sure you do the same.
10. Focusing on Their Budget Leads to Nothing But Trouble
I used to balk at charging too much, imposter syndrome is something I constantly battled. “Am I really that good? Is my writing really that special? Isn’t this something that anybody could do? Couldn’t this client do it themselves? What do they even need me for?” One thing you don’t need to be is the absolute GOAT to deserve a living wage. You’re providing a service and filling a gap and giving your time. When I’m hiring a plumber, I’m not necessarily looking for the best in the country or the one that created an innovative new technique. I am looking for someone that is responsible and capable.
Back when I was accepting $10 for a 1000 word article I was doing so because I was basing my decisions on what I thought clients would pay. What if instead you based your rates on what YOU needed to be happy and comfortable? In the past few years of operating my writing business, I’ve heard a wide array of excuses for having a non-existent budget.
I always stay focused on this idea: it’s on me, the power and the responsibility is in my hands. If I accept a low paying job it’s not the client’s fault, that’s my fault. I’m not being exploited, I’m allowing myself to be exploited, I’m the exploiter. And that’s why, whether it’s in a relationship or with a business client, the power is yours to choose your worth to match your time and efforts.