You’re Worth It

Not sure if you’re getting paid the right amount for a job well done? If you’re an entrepreneur, the fine line between nickel & diming and demanding more from your clients can put you in quite the predicament. Not sure where to start? You can begin by asking yourself: “What am I really worth?”.
Text by Dena Roché | May 16, 2018 | Lifestyle

Remember when you were stuck in your office cubicle dreaming of the day you owned your own business? Not only would you be free of your ridiculous boss, but the sky would be the limit on what you could earn. Fast-forward, and now you’re an entrepreneur, but instead of striking it rich, you’re paying rent, insurance and office expenses. When you look at the bottom line, you wonder why you ever left corporate America in the first place. Maybe it’s time to raise your rates.
I can practically feel your panic, and the death grip you have on the magazine right now. For most entrepreneurs, the thought of raising prices and asking for what they’re really worth leaves them in a cold sweat. “The first thing you need to do is to identify where your fear is coming from,” says Tonya Rineer, a Money Mindset Coach. Adds Dr. William Benson: “You have to really assess your money story and challenge your false beliefs,” says the acclaimed Beverly Hills-based Psychotherapist. “The way you do this is with logic.”
For example, if you fear that nobody would pay the higher rate, you can challenge that belief by admitting that you could be making false assumptions, researching the market and seeing that your competition is charging that and possibly even more, or realizing that the playground you’re currently playing on is too small.
Frequent South Florida performer Dan Nainan, a comedian who has performed for President Obama, appeared in an Apple commercial and on a TED stage, commands up to $20,000 per gig. But just a few years ago, he slaved for $200 in small clubs. So what changed? First, he confronted his internal beliefs that were saying he wasn’t worth a certain amount, and then he created a niche. Rather than be like every other comedian who told dirty jokes in a comedy club, he focused on clean comedy for corporate and foreign markets. “Salary is a function of your rarity,” he says. “There are only a few other comedians who do what I do.”
With a new act, he slowly started inching up his rates. “I realized everyone kept saying yes when I asked for more money,” he shares. “As long as they keep wanting to work with you, your rates are too low,” he says. “My only regret is when I asked for 20K, I didn’t ask for 25K!”
To raise your rates successfully, however, you must have 100% confidence that you deserve what you’re asking for. To bolster your self-esteem, remind yourself about all the education you have, your experience and the value you provide your clients. “Give your customers so much value that they would be literally crazy to even consider complaining about price,” said Miami-based Scott Fishman, Founder of Team All-American.
In fact, every day you’re in business, you’re becoming better at what you do and therefore should command a higher rate. “If you are selling a product or service for $50 and that will save the customer $1,000, then it is easy to justify the price to be $200 to the customer,” says Terence Channon, Managing Director of The SaltMines Group in Vero Beach. “New entrepreneurs especially, are quick to devalue their expertise by making price the leading factor.”
When you really drill down on a niche and become a top expert in an area, it becomes easier to command premium prices because what you bring to the client can only be brought by very few. “When someone already knows the benefits of working with you, they already have fallen in love with you,” says Rineer. “It’s like dating, they don’t want to start all over again. Sure they might gripe and groan or try and negotiate, but very rarely will they leave.”
If you’re still nervous about raising your rates, first change your pricing for new clients and see how the market reacts. With existing clients, give them warning that a price increase is coming and reiterate the value you bring to their business so they understand why you are raising rates. “A lot of time you won’t even get push-back because you’ve probably been undercharging,” says Benson. “But when you tell them about the increase, don’t say too much and don’t apologize.”
You can also help clients adjust to rate changes by offering different ways of packaging your service or offering a one-time discount on the new rate. If you do have a client argue over the rate, it could be a sign that you’re targeting the wrong market. “There are different types of people from the Groupon shopper who only cares about money, to the Value shopper who will pay more for added-value, to the Prestige shopper who actually wants to pay more money,” explains Benson. “It’s up to you to decide what group you want to tap into.”
What’s more, there’s a weird psychological phenomenon that the more expensive something is priced at, the more we inherently believe that it must be really special to warrant the price. If you price your services too low, it can subconsciously send the message that you aren’t competent or experienced enough. To make things easier, it’s helpful to have a company policy about raising rates. “You should always be increasing your rates because your expertise is growing and entrepreneurs also need cost of living adjustments just like employees,” says Rineer. “There’s no rule as to the percentage of increase, but ideally 10% a year is a good starting place.”
Setting your price is part art and part science and having the confidence to ask for what you’re worth is a priceless commodity. “Our own behavior over money is what limits our income potential,” concludes Benson. In the end, the message is clear: Changing your money story can change your tax bracket.