As an entrepreneur, certain things are easy and straightforward. Then there are those things that you are not so sure how to go about them, such as setting your rates. You see, your rates will have such a significant bearing on your business. If you set them too high, there is the risk of losing clients, and if you set them too low, you will not be able to cover your operational and overhead costs. This makes setting your rates as necessary as starting the business itself. You will need to go with prices that don’t hurt the clients or hurt you. Here are some keynote points to follow when setting your rates as an entrepreneur;
Calculate how much your salary needs to be to pay the bills
The first thing you need to establish is how much do you need to pay your bills. This should form the basis of your rates. As an entrepreneur, you need your gig to be paying your bills comfortably. The rates should somehow be moderated as you don’t want to be in a position where you are overcharging your clients.
There are instances where a client wants your service, but your rates are putting them off. You can find common ground where you can agree to lower your rates and, in return, get much-needed experience. This could also mean there is the possibility of more work in the future. You can be flexible enough to lower your rates for individual clients to build your clientele and customer base. However, please don’t set your rates too low that it hurts you. You should always be compensated for what you are worth.
Remember that your value comes from expertise
What makes people hire you is the expertise you bring on board. This should significantly impact your rates as your value increases as your skillset increases. Focus on improving your expertise, and it would help a great deal if you choose to specialize in one area. Please choose an area in your industry that you feel is your stronghold and master in it. This will significantly improve your value, and you will be paid for what you are worth and not just the hours worked.
Check what your competitors are charging
What’s the average rate in your industry? What others are charging will give you a clear picture of what your rates should be. If you feel you offer more skills than what your competitors are offering, then it is safe to set your rates slightly higher. The difference should not be too much as this will scare potential customers. If you don’t have any other skills, it is safe to charge the industry’s average rate.