One of the most important decisions you face as a business owner is how to price for the work you do. It’s about finding the right balance so you don’t charge too much and scare clients away or charge too little and undervalue your work. We’ve put together some signs that you may be undercharging and how to fix it.
While it might seem great that business is booming, a sign that you’re undercharging is when you have no more room for new clients or you feel that the work you are doing is not worth the money you’re making. You could look at increasing your prices so you have more time to take on projects that give you a better return.
You’re not taking home a salary
Business owners usually make sure everyone and everything is taken care of first. Bills, marketing and your employees. You should make sure there is enough after these payments to bring home a reasonable salary for yourself. If you find there’s not much left at the end for you, its time to charge more for your services
Your prices have stayed the same for years
In most industries, prices increase slightly each year. If you can’t remember the last time you raised your prices, then it’s time to increase your rates. The cost of living is constantly on the rise and so is the cost of running your business – your charge-out rate needs to keep up with your business.
Finding the right charge-out rate can be difficult and may take some time. Do your research, ask around and find out what your competitors are charging. If this seems daunting, start small and set higher prices for your services for new clients. If you’re worried about existing clients, raise those prices incrementally, giving them plenty of notice.