How do you feel about making money?
March 1, 2010Money—it’s a complicated, emotional subject. It’s so easy to get your self-worth tied up in it, so easy to get intimidated, particularly when you ask people to give you their money in exchange for your work.
Sit with that for a minute. You ask people to give you their money in exchange for your work. Does that make you uneasy?
It shouldn’t. It’s how our economic system works, for the most part—money in exchange for a service, or something you can hold in your hands.
When an employer rents your time, you show up, do the work, go home, and repeat the process as often as necessary (or, depending on your disposition, as long as you can stand it). There might be complaints. There’s not enough money for the amount of work, responsibility, or stress that goes with the job. There’s no hesitation about wanting more.
When you sell what you create, there might be some frayed nerves when it comes to asking for money, at least until you get used to it.
So what’s the difference?
There’s nowhere to hide
When you work for someone else, you get to hide behind their name. Even if you screw up royally and get fired, your employer has to take the heat and deal with disgruntled customers. They get to take the deep breath and put the prices on the tags.
When it’s just you and your business, that safe zone is gone. It’s your neck stuck out there—it’s you the customers are judging—your ideas, your talent, your heart and soul. It can be pretty damn scary.
If you don’t ask for too much money, maybe they’ll go easy on you. So all of a sudden, money isn’t an exchange of value for value. It’s about approval. And you might do all kinds of stupid things to get it, because disapproval is a mighty unpleasant feeling.
The truth is, the decision to pull out the wallet is a form of approval no matter who’s buying what. Someone says, “I’d like to have that.” You do it when you buy, too.
Take refuge in the marketplace
When you get emotions tangled up with money, you forget you’re part of an established marketplace. There are prices in your medium that are already accepted by buyers. That ground has been broken. Depending on what you do, the range can be wide, depending on skill and reputation. But those numbers can help you get out of your spin. They can help you to stop thinking about approval and start thinking about business.
Ultimately, the right price is the one the market will support.
How does that feel?
Adjust your perceptions
Whether you work for someone else or are self-employed, you think about making money. That rings particularly true for creatives, but the thought needs to be expanded. While the work you produce is always most important, you do much more than that. You run a business, which involves heavy responsibility and requires a varied skill set. You’re not playing at it. It’s not an amusing little hobby.
How do you feel about money? Think about how you earn it.
Over to you: Do you get hung up about money? If you sell with confidence, how do you avoid the money jitters?
Good column – and came at just the right time. I’ve been agonizing over posting my prices on my website for the acting classes and actor coaching that I am now doing in New York City. I tried to keep the prices low, telling myself that I want them affordable to starving actors. But I was barely breaking even when I figured in my costs. Now I see what I was really doing- the approval thing. If the market will bear the higher prices that I see on other coaches sites, then I shouldn’t under-sell myself. I guess it’s the fine balance between wanting to serve and wanting to stay alive.
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Stacey Cornelius Reply:
March 1st, 2010 at 10:54 am
That’s the big dilemma, isn’t it. When you underprice, “affordable” quickly becomes “starvation” for you as well. Then everybody loses, because you can’t sustain the business. Sometimes you can manage affordability by offering smaller versions of what you sell, or doing a payment plan, but it’s not always possible.
But if your clients see results, then it’s an investment for them–they get back more than they paid in.
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I HATE asking people for money!
I am totally hopeless at charging enough for my time and effort – actually I’d like to make that ‘was’ I’ve recently realised that it shouldn’t be my time I’m charging for – it is my skill and experience.
Now I’ve worked that one out, it is getting much easier for me to charge the correct amount.
One thing I have found is if you are confident with your own worth, no one bats an eyelid – it’s when you are unsure that the people question your fee!
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Stacey Cornelius Reply:
March 1st, 2010 at 11:23 am
Once you flip it to *earning* and respect your own expertise, it’s amazing how your thinking changes. Confidence is huge. Good for you for raising your rates.
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I’ve been doing a whole lot of thinking about my prices lately. Realized that I’m actually not even breaking even with my prices where they are.
And I never noticed it until you pointed it out – I am pricing for approval. I don’t want people to approve of the work, I want people to approve of the price. Wow. Interesting.
It’s the remembering it’s a business, and that I have skills and I provide value that’s hard for me. I definitely have a lack of confidence in that area.
This has given me lots of food for thought.
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Stacey Cornelius Reply:
March 1st, 2010 at 1:27 pm
Realizing you have valuable skills, and that you’re setting prices for the wrong reasons, is a huge step forward. Taking those first steps forward is scary, but important. It’s something you can build on. Brava to you, Sarah!
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What to charge is most dificult challenge I face. I make custom furniture, most of the time I make a piece and have to find a buyer for it. I know what items similar to mine sell for and I know that what I produce is better than the majority of what is out there, but I still face the fear that if I price the piece too high (what I think I should get) it won’t sell… I have had good luck selling at a resonable rate, but not enough to quit my day job. I like what Rachel Mathews said above:
“One thing I have found is if you are confident with your own worth, no one bats an eyelid – it’s when you are unsure that the people question your fee.”
This is definitly true. Every time I have made something for someone by commission, I have never had anyone balk at my price. I think it has a lot to do with my enthusiasm and air of confidence about the project. I, and all of us, need to transfer that energy into all of our work and every sale. It is not easy and I do get the feeling like I am putting my head on the block everytime I tell someone what the price is.
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Stacey Cornelius Reply:
March 1st, 2010 at 1:35 pm
I think that “head on the block” feeling is universal for creatives, at least at first. But if your work is better, your prices should reflect your skill level.
Sometimes you just have to take a deep breath and raise your rates, like Rachel did. Thing is, you’ll never know if you don’t try.
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So it sounds like we all agree that confidence in our own work and value is what gets people to “approve” of our pricing.
What, then, can we do to create that confidence? Customers balk if we’re unsure of our own pricing, so how do we gather the strength of mind to charge what we think we deserve and stick to it?
Simple experience is one factor and the best experience comes from success. Can we engineer our own little successes to strengthen our own reslove that what we’re doing is valuable and worth what we want to charge?
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Rachel Mathews Reply:
March 1st, 2010 at 1:06 pm
One of the things that helped me was to imagine I was a top London designer and think about how they would price a job – once I’d done that, I could see how ridiculously low my prices had been and I was actually embarrassed about what I had been charging!
Is there someone in your field you can emulate until you feel you do deserve more? Borrow their confidence.
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Stacey Cornelius Reply:
March 1st, 2010 at 1:39 pm
Borrow their confidence–love it. Great advice!
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I had another thought about this subject. When I was younger and fancied myself a professional photographer. I knew a guy who was probably the best photographer in town (Lansing, MI) He had a well known, established studio, anyway, he was sick and tired of doing weddings so he nearly trippled his price thinking people would not hire him. His wedding business doubled. I guess often people associate more expensive with better.
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Stacey Cornelius Reply:
March 1st, 2010 at 3:38 pm
That’s a classic story, Randall, and it’s true. If you do very good work, people will pay you for it. “You get what you pay for” usually applies to something cheap that didn’t turn out too well, but there’s another side to that coin.
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I’ve found that so much of what we think about money is based on scripts that we’ve picked up from others over the course of our lives. And thanks to the effect of consumerism, our money concept is very tightly bound up with our need for social approval. No wonder we get in a mess!
I once did an exercise where I wrote down all of the beliefs I had about money – and then worked out where they came from. It was really eye opening, and has really helped me.
With regards to building confidence – I’ve found that getting written testimonials from clients really helps with that, even if it’s for work you’ve done for free.
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Stacey Cornelius Reply:
March 1st, 2010 at 8:43 pm
Iain, great advice on both counts.
If you look carefully at your beliefs surrounding money, it can be a real eye-opener.
Collecting your applause is a great way to remind yourself that people do value your work. It’s particularly valuable when you’re feeling low.
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The thing that made the biggest difference for me in gradually standing firm in my prices (which are probably still a bit too low) was making sure to keep asking people to tell me very clearly about the value they received from working with me or from what they purchased.
My husband is excellent at this and he also showed me that when I actually got the great feedback, I still had to really let it in. If you get enough of these, you start understanding the truth of how much value you’re really giving and then it’s so much easier to charge accordingly.
But when we’re slinking around not charging enough, at first it can be as hard to ask for the feedback as it was to ask for the money! Train yourself to ask anyway after every sale…it’s worth it!
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Stacey Cornelius Reply:
March 2nd, 2010 at 6:45 pm
Susan, that’s an astute observation–you still had to let the praise sink in. It can take some time to believe you’re doing something worthwhile.
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i hate the money issue. I always feel people are secretly thinking im not worth that amount of money. I always undercharge. But, im getting there. I know how much work it has taken me to learn what i know. I also know how well i would do for a client so im gonna start charging what im worth and more importantly amounts that can sustain me
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Stacey Cornelius Reply:
March 4th, 2010 at 10:32 am
Vona, also think about the concrete benefits your clients will see as a result of your work. The culture sector here in Canada suffered some disparaging remarks from our own Prime Minister in the last federal election, that we were whining about money while attending “rich galas” (which most of us can’t afford to attend). The community responded with solid facts and figures about how much we contribute to the national economy–billions of dollars and thousands of jobs. It was an eye-opener for a lot of people, both within the culture sector and in the population at large.
When you focus on your contribution, it helps you understand what you’re really worth.
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The hardest thing for me to figure out is WHAT to charge! After working for a high-tech company for 17 years, I had no idea what to charge for a web site design. I know I don’t charge enough, and my husband encourages me to charge more. But in these economic times, I understand folks don’t have the budget for websites and want to convey that I understand that.
Tough to find that middle ground. And difficult to find what other companies charge, seems like lots of other web design companies are reluctant to share their pricing structure. Any suggestions??
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Stacey Cornelius Reply:
March 27th, 2010 at 2:26 pm
The sneaky, underhanded way is to do some serious industrial espionage and pretend you’re looking for a quote (you get a friend to play secret agent, or use a fake name with a Gmail account). I’ve heard of that being done, but I really don’t recommend it.
What you might try is talking to someone who does website design, but specializes in an area that’s of no interest to you whatsoever. If you’re just starting out, someone who’s been in the business a while might be willing to talk to you as an informal mentor. You can also look for design associations and see if they have forums for members to share information.
There are usually people in your field willing to give you a hand. Usually all you have to do is ask.
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Iain Gray Reply:
March 27th, 2010 at 5:04 pm
In the ‘old days’, before social media, when people were less open, I used to do what Stacey mentioned – do some social engineering and get a quote out of people.
However, it’s not the nicest of things to do, and I really don’t think it’s necessary now, unless you’re in a very closed industry.
As a web designer, a good start is asking around other designers to get a ballpark. However, you’re likely to find a BIG range of prices. Probably anywhere from $150 up to $1000 per day.
What I’d then to is pick a price you’re comfortable with, and see if your customers give you pushback. If they don’t, next time you quote, increase your price by 5 or 10%.
Keep doing that until a few people say you’re too expensive for them, and you’ll have found the level of your market.
I’ll wager one thing though – it’s probably around 50% more than you’re charging already.
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Sherri Reply:
March 28th, 2010 at 4:13 pm
Thanks to both Stacey and Iain!
What about “package” pricing? I have some inquiries who are looking for a really basic, static HTML site, maybe 2-5 pages max. Then there are folks looking for interactivitiy, shopping carts, the whole she-bang!
It seems like offering packages makes it easier for inquiries, and easier on me. What are your opinions on this??
Many thanks!!
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Stacey Cornelius Reply:
March 28th, 2010 at 6:57 pm
Beware the Siren song of packages…
If you offer packages, you have to keep control of what’s involved in the project, because as soon as the client wants a “few tweaks,” you’re back to doing custom work. If you don’t have wiggle room, or if you don’t make it crystal clear that extra features are extra money, your profit will shrink in a hurry.
You’d have to be very careful about how you market that, and manage expectations.
If you offer packages, bear in mind you will attract a certain type of client. That person may or may not be the type you want to work with. If it’s not, that would make it tougher on you in the long run. If you prefer clients who want a fast and easy solution (and are happy to let you be in charge), then go for it.
Either way, I’d focus on being the go-to gal for the people I’d most like to work with.