This is the first list-post of mine, although I had sworn I’d rather die than ever make one. But I thought it would be a service to future readers who are looking for more direct advice from my experiences – how to use them to help themselves. So here goes!
This one is about how to set the prices when you are just starting out delivering services as en entrepreneur with your own company or freelance-act.
The question above all is:
Where does one draw the line for how much or how little to deliver to a customer in terms of quality?
There’s good customer service, of course. It is that which makes you deliver that something extra to gain or retain a customer.
Then there’s also the act of doing yourself a disfavor by selling out – delivering too much and gaining too little in return. For whatever reasons …
Obviously there are few absolutes, because each person and company and financial situation is different. Very different. Each market is different. But overall, I’d say there are some good guidelines on how to find your ‘right price’.
Things to remember, then:
1) You always have options to gain new income, unlike with a normal job
It may be stressful to be an entrepreneur, but there are always other customers. Always. I’d do well to remember that as well.
2) Entrepreneurship is about results
Before I went independent, I had a cozy ‘job’ by temporarily attending the same work-space as other want-to-be entrepreneurs. While we were receiving our insurance payments. It felt cozy, like I said. But when I feel like that – at any time – it is damn important to remember that feeling cozy doesn’t matter as an entrepreneur. Only results do. And at that time, I was not an entrepreneur and not delivering results. And even if I had been truly independent, and not received any support I could still have fallen into the same trap for a while, like when I work a lot for others to please, or out of fear, or boredom, or perfectionism, without actually getting compensated, or without getting anywhere.
3) I won’t have life style so high that makes me ‘need’ to set certain, very high price-levels
I’ll find out through experiment my ideal prices and offers. In short. What I will do and what I won’t. And for what level of compensation. Other things I will regret doing for that price, and still other things I would like to repeat – like my historical talks: 350 bucks for 2 hours of enjoyable work – let me have more of that! But aside from food and shelter for ourselves and our son, I bloody won’t be constrained by having to chase a certain kind of client with a certain size of wallet, not because I’m more interested in them or a better match with my skills. But because they are able to pay my rent for an apartment with three extra rooms I don’t use.
4) Education doesn’t matter – only insofar as you can use it to deliver value
Deliver value. Real value. And if you don’t think you can then find out how you can.
5) It does not help to think small to ‘protect yourself’ against failure
I thought it would help me to think ‘it is easier earning a small amount than a bigger amount’ when starting my company. Because those first few thousands of dollars would be hard, and more dollars would be even harder. But it made me feel depressed and demotivated to think of earning only 3000 dollars a month. However, I have found out that if I imagine a goal of 6000 dollars a month I feel *much* more motivated, – although I know with my rationality that it will be twice as hard. To a certain level, the reward is more important than costs of having to work harder. The level of 3000 also reminded me too much of all the time I have been struggling to achieve just that – survival – level of income per month. Perhaps that is the real answer to why I am motivated to leave it behind – however much I have to fight for it.
6) Know your deal-breaker
I also had to decide very clearly, what is my definition of a deal-breaker with regard to a difficult client. Even if it hurts financially. Even if it is frightening. But if you don’t know exactly what it is that will make you stop and take a new, in the short term more frightening course, like quitting a job or a big client, then you become even more frightened. The courage to make that decision – and later stand by it, making it real – that is an act. Courage is action. And deciding what my deal-breaker is with regard to this particular client is an action. An important action. And once that decision is made, no going back, then the fear of actually carrying it out is lessened.
7) Know your ideal-customer
More often than not, my ideal customer has already started doing some website-stuff themselves. They recognizing the DIY-need, yes, which goes with limited funds and a small bootstrap business. But they are also not afraid to tackle with it. And skeptical enough to avoid throwing hard-earned money away on any sharks who want to sell them expensive and bad solutions. So, they actually take the time to google and look at reviews and think of themselves. They have some faith in their own authority. What’s important here is that they have drive and some courage, but also a definite need for help to take the next step, and a realistic view of where their own capacity ends and mine begins. These are often the best customers.
8) Don’t waste time reading about the actions of others. Take action yourself!
Well, I can tell you what is a waste: Reading about Steve Jobs’ success (until he died) or desperately looking for a new project which will give you success quicker, instead of finishing the one you are at.
The advice in this post is a composite of the first 15 post excerpts in the category “Entrepreneurship” from Dec 2016-March 2017
Here you can also find direct links to the posts themselves and read them as part of a narrative about the ups and downs of a fledgling entrepreneur (me).