Are You Pricing Your Time or Your Worth?

Self Worth


I worked with a client who offered web design services.  He was busy and had enough clientele but never seemed to have enough funds in the bank account to operate smoothly. He came to me with cash flow problems.

I requested to do an analysis on his clients, his services, and his pricing. I also updated his bookkeeping so I could look at his financials in depth.

What I found was that his Cost of Good Sold – COGS (products/inventory/project-related costs) were too high for the amount of income. The business overhead (rent, utilities, insurance) was also too high for the amount of income.

What this told me is that he was charging too little. The income did not cover his COGS and overhead expenses.

This is a typical example of marketing pricing instead of value. This client was hard-working, knowledgeable, and had rave reviews from customers. He was successful in every area, except the financial area.

Pricing Your Time AND Your Worth

The client charged by the hour. When marketing himself and quoting prices, he was only considering the time it took him to complete a task. He wasn’t considering the years (thus expenses incurred) it took to acquire his knowledge and expertise to be able to perform these tasks so quickly. He was also not considering the value these completed tasks brought to his customers (efficiency, better branding, professional image which landed them more customers, and so on). Most importantly, he wasn’t taking into consideration the project costs paid to have the tools available to perform the tasks, nor the overhead expenses he paid for just to stay in business. You can’t be in business without insurance, office space, equipment, and all that goes along with having a business. Those expenses must be part of the pricing equation or there won’t be much of a profit, if any at all. You’ll be working just to pay bills. Sound familiar?

When marketing yourself, you must market your value.

What do you bring to the table? What can you offer your customer that others can’t? Will your product or service generate more sales for your customer? If you were a door-to-door salesman selling their product/service you would be paid commissions on every sale. How is a creating a website for them- that will do the same thing- different from that? A professional and functional website with the latest technology will bring more business, more revenue, and a better reputation.

Consider what you’re providing not just during the 15 minutes or 5 hours of work, but consider also the results of the work you’re doing for them. Time is precious and we spend a lot of it in our businesses. Add to that the time and expenses paid for professional development and education to get to where we are.

When you focus on pricing and make your prospects and customers focus on pricing, that’s all they will see.

It all comes down to self-worth.

However much you value yourself and what you offer, that is how much prospects and customers will value you.

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