As a freelancer, coach or any service-based small business owner,you know that charging the right amount for your services is essential to your success. But how do you do it? And how do you make sure that your clients are still willing to pay your rates?

In this blog post, I’ll walk you through the process of calculating your rates, negotiating with clients, and handling objections. I’ll also provide some tips for getting paid on time.

Why it’s important to charge the right amount

When you charge the right amount for your services, you’re able to:

• Know you’re on track to reach your revenue goals

• Cover your costs

• Make sure each project you do is profitable

• Attract high-quality clients that are likely to bring your referrals and repeat business

• Build a sustainable business so you can pay yourself good, consistent money

The problem with undercharging is that it won’t get you to your revenue goals and you’ll end up working for less that you’re worth which is a sure path to burnout. 

How to calculate your rates

There are a few factors to consider when calculating your rates, including:

• Your revenue goals

• Your experience

• Your skills

• The value of your services

• The market rate for similar services

Once you’ve considered all of these factors, you can start to calculate your rates. Here are a few tips:

• Start with your hourly rate. This is the amount of money you want to earn per hour.

• Calculate your project rates. This is the total amount of money you want to earn for a project. To do this, multiply your hourly rate by the number of hours you expect to work on the project. Note that when you quote a project rate, it’s even more important to be clear about what you will deliver and in what time frame. Often project rates are dragged down by scope creep. That’s when the project keeps getting bigger and/or longer but the price doesn’t change.

• Add in additional fees. If you travel to and from the client site or if there are materials involved in the work, be sure to add these fees to your rates.

How to negotiate with clients

Once you’ve calculated your rates, you’ll need to negotiate with clients. With new clients, you can just introduce the new rates. With previous or ongoing clients, you’ll need to decide whether or not to continue to offer them your previous rate or inform them that your rates are increasing. This is where your confidence and flexibility will come in handy.

Here are a few tips for negotiating with clients:

• Be prepared. Do your research and know your worth.

• Listen to your client’s needs. What problem are they trying to solve?

• Be flexible. Be willing to negotiate on terms, or scope of work.

• Be confident. Believe in your skills and the value of your services.

How to handle objections

No matter how good you are at negotiating, there will always be clients who object to your rates. Here are a few tips for handling objections:

Objection: “Your rates are too high.”

Respond by explaining the value of your services. How are you helping them solve their problem? Why does finding a solution matter to them? What are the benefits of working with you? How will your services help your client save time, money, or headaches?

Objection: “I can get someone else to do it for cheaper.”

Respond by repeating your understanding of their priorities and pain points and then be ready with an answer of how you are different from the competition. 

For instance you could say, “Yes company X charges less but it takes them twice as long and often ends up costing more. My 10 years of experience allows me to deliver your results faster and with fewer revisions.”

Objection: “I don’t have the budget for that.”

Respond by asking your client if they’re willing to compromise on scope of work or terms. Are they willing to pay a retainer? Are they willing to pay in installments?

Tips for getting paid on time

Once you’ve agreed on a price with your client, it’s important to get paid on time. Here are a few tips for getting paid on time:

• Get everything in writing. This includes your rates, the scope of work, and the payment terms.

• Send invoices promptly. Don’t wait until the end of the project to send an invoice.

• Follow up with clients who haven’t paid. Be polite but persistent.

• Set up a direct payment system that works for you. This could be a PayPal account or a credit card processor. You can fold the associated fees into your rate.

By following these tips, you can ensure that you’re charging the right amount for your services and that you’re getting paid on time.