I remember when I first launched my first business as a copywriter years ago, I had no clue what to charge. Without putting hard thought into what type of results my work gave my clients, I started out with an hourly rate that didn’t scare ME! I would still even stutter when I said to clients, “My rate is si- si- si- sixty dollars an hour.”
Deep down, I wasn’t confident in myself, so of course I wouldn’t let myself charge more. And of course, as a result I attracted lame clients, worked like a dog, and stayed broke all the time.
Well, things are VERY different today! As just one example, I have no problem sharing that membership in the Diamond tier of my Millionaire Protege Club is $100,000 and Platinum is $18,000, and there is an intense application process. (And we just closed 2009 membership to both tiers as they are full to capacity!)
And, here’s the best part: Because I take on so few clients now, at higher rates, and the bulk of my income comes from information products and programs, I not only attract more serious students, but I work LESS than I used to!
Obviously this shift didn’t happen overnight. Here are a few things you can do NOW to move in the same direction:
1. Become an expert in something.
Experts are more respected, get media attention, get paid more, and get less price resistance (meaning people are happier to pay you what you ask). I went from being a general copywriter to one who specialized in newsletters. Then in email newsletters.
Then I dubbed myself “The Ezine Queen” (a title which I no longer use but still sticks around ; )). I had no idea at the time how much that would help me get famous and be remembered. Did you know that Muhammad Ali became known as “The Greatest” because Ali himself said it? Yep — he just kept saying it, and then eventually so did the media!
There’s a reason people happily pay more to get to the wise man at the TOP of the mountain! (Meanwhile the man at the bottom can’t even seem to give it away.)
2. Raise your rates.
This may seem like a given, but you wouldn’t believe the resistance I get from clients when I poke and prod them about this. A few years ago, I hired a personal trainer for a few months who only charged $50 an hour. Honestly, because his rate was so low compared to other trainers in the area, I was worried he wouldn’t be that good. But I found he was actually a very knowledgeable and skilled trainer.
He often complained that his schedule was so jammed it was killing him. To make a living at that rate, he obviously had to take on clients morning, noon, night, and weekends. He was also disorganized, frazzled, and late most of the time due to his schedule.
He was such a good trainer I would have been happy to pay him $75 or even $100 an hour for his time. I remember suggesting he raise his rates, and he replied, “But Ali, then not as many people would work with me!”
Well of COURSE! (I wanted to whack him on the head with a 3 lb. dumbbell.) That’s the idea. Let’s say he decided to double his rates, and half of his clients dropped off. Why wouldn’t you want to work HALF as hard as you are now for the same money? This also opens up more time for you to work on new projects, like creating lucrative new information products and programs. (See #5.)
If you’re having trouble raising your rates across the board, bring in fresh clients at your new rate, maintain old clients at current rates, and drop the clients that are pains in your bum.
3. Restructure how clients can work with you.
For many solo-professionals, a much better way to approach working with clients is on a project basis, or “flat fee”. That way you simply assign a value to the *results* you’re giving them.
For example, my friend Lorrie Morgan-Ferrero is a copywriter who charges tens of thousands of dollars to write a sales letter. Does that price-out some clients who can’t afford her? You bet. But that’s the idea… she much prefers to work on a few projects at a time with stellar clients who truly value her work.
Another idea: Instead of taking on one-shot projects, work with clients on retainer (a set fee per month) or require them to sign up for a number of months with you. One trend in coaching and consulting right now is moving toward six-month or annual contracts with clients. Not only does it help guarantee your cash flow, but you attract better, more qualified, and more committed clients.
4. “Clone” Yourself.
Have you ever wanted a “Mini Me?” Or a whole team of them? Well there’s no reason you can’t. If you have a duplicatable system or process you use in your work, why not teach others how to do the same? Then have them work for you on a freelance basis, or consider “licensing” people to use your method or teachings.
Consider working with a team of other coaches and consultants. For example, one of my very early life coaches offered me this choice when I was interested in coaching: Be coached by her personally for a high fee, or work with one of her associate coaches at a lower rate.
Because I wanted her personal help, I paid her the higher fee and she did all the work. But if I chose one of the other coaches, I’d still pay her company, the associate would do all the coaching work, and she would keep a good portion of the fee. (Smart lady!)
5. Create and Sell Information Products
If you’ve read other articles of mine, you know I’m a big fan of transcending the exchange of time for money. You simply will never make the big bucks if you keep getting paid solely for your time.
Look at ways of selling your knowledge via information products such as ebooks, manuals, courses, audio programs, membership programs, and occasional live events. This has helped me QUADRUPLE my income over the past three years!
Instead of “work, get paid” … you want “work, get paid, paid, paid, paid, paid, paid, paid, paid, paid!” I may spend a good chunk of time creating a new product, but then it can sell forever. I may put a lot of effort into creating a one-time seminar, but I also record it and create a home-study version that can sell forever.
I hope you get the idea! There are many other strategies to restructure your fees and leverage your knowledge, but these are great ways to get started.
© 2003-2009 Alexandria Brown International Inc.
Self-made multimillionaire entrepreneur Ali Brown is devoted to creating financial freedom for women globally through the power of entrepreneurship. To learn how to create wealth and live an extraordinary life now, register for her free weekly articles at www.AliBrown.com