Guest post by Jesse Michelsen
In light of J. Money’s recent job scare and his resolve to creating his online empire as he put it, I thought I would discuss creating value in yourself.
I work in the computer industry and used to run my own computer repair shop. One thing I have found over the years is that computer repair people will either overcharge drastically, or just the opposite. A buddy of mine that does a lot of freelance stuff told me his price structure and I was baffled at how low it was. I thought my prices were really low and I would never work at the prices he told me.
When I asked my buddy why he charged so little, he told me that it was because the tasks were easy and he didn’t feel right about charging a lot for something that was easy. This is when my boss voiced up in the conversation and said, “if it was so easy, why didn’t the customer do the job themselves?”.
That really rang true for me and got me thinking about how often services are devalued by others, and what a disservice we are doing to ourselves when we devalue our own skills.
Here are a few ways that I have learned in doing freelance for a few years to show your value to potential clients:
One thing I used to do when I first started freelancing is I would go into a situation that would introduce unknowns. I would encounter something I didn’t have a price for so would be uncertain what to charge..this would show in my face and in my voice to potential clients and made me look like less of an authority on the subject.
Go in prepared with a price list for everything you can possibly think of doing. Make a fall back price as well for unknowns, so that you can at least confidently say how much you will charge.
Selling is all about confidence. Many sales people at retail chains know very little about what they sell, but they can confidently tell you to buy that product, and most people listen. When selling your own abilities, you know exactly what you can and can’t do. Tell the client exactly that. Confidently state your abilities, and your prices.
Honesty is so important. If you make a mistake, a client will understand if you tell them just that. If you shift blame and don’t take responsibility, you will be the one that looks bad in the clients eyes regardless of how the situation pans out in the end.
The freelance world is far different than the corporate world, and even the side hustle world. You have no corporation backing you, pulling for you, or putting work in front of you. You have nothing to fall back on but your ..backside if you fail. The worst thing you can do is show potential clients you aren’t worth their time by devaluing your skills and services.
Remember, if just anyone could do it, they wouldn’t be calling you.
My name is Jesse Michelsen and I created Personal Finance Firewall, a place where I discuss raising a family and living life to the fullest, while all the time being smart with money to create a better future.
(Image by afroboof)
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Oh my gosh, your friend’s story of not charging much because it is easy really hit home. It can be really hard sometimes to not feel almost guilty for making x amount of dollars if you see others maybe working harder than you or whatever. But if you have a skill that can be marketed and there is demand, then charge what you can!
One thing I have also noticed is some companies can wear you down so much that you feel like you could never go out and get a different job or make more money. They make you devalue yourself, and that can be a very toxic environment.
Exactly, supply and demand! If you had a product that was in high demand and you were selling it, you wouldn’t sell it for way under the market price. You would match competitors and your buyer wouldn’t have any complaints.
The corporate boot is a good point too. That’s a great reason to dabble on the side as much as you can so you can get a feel how other companies operate and know how you would do in a different environment.
Rock on my friend! That’s the attitude that gets the price you deserve. Everyone has value and it just takes realizing it to bring out your full potential.
Another good point is if you are always undervaluing your work, and getting paid very little, you will have no motivation to improve your skills.
Great points J :)
Good advice coming at a good time for me personally.
I am a real estate investor and manage all my own rentals. While i know what my time is worth there (ask the tenants and they will tell you, nothing…lol)… I have been approached by another investor who has asked me to manage his string of rentals. I am supposed to give him a price. While I want the job and don’t want to over-bid i also don’t want to be working for free. Being a landlord can often be a demanding and frustrating job one that some days all the money in the world does not seem to make it worth it. But i have to realize that my time is valuable and what i can bring to the table has some value too. It’s a confusing position to be in as i would rather have him shoot me an offer and we can go from there.
This is such a good point. The tasks themselves may be easy but the customer isn’t paying for your time. They are paying for the knowledge that you have accumumulated (and that they probably don’t have)
As a landlord myself (I have my hands in so many pies.. ) I can understand completely where you’re coming from. I can also see why the other investor contacted you, I would pass on those duties if I was willing to pay someone else to do them! But you’re exactly right, your time is valuable and you will have to come up with a ballpark to go from. There are sites out there that can help you estimate the cost (google can help, Dice is one but there are others for specific types of work)
For example, on average, a landlord is paid $49,000 a year and a property management company that handles everything from rent collection to lease renewal to repairs charges on average 12% of rent per year (that includes renewal fees).
Honestly, I would go with a percentage structure because it will be a set fee each and every month, regardless of what you do and it may help balance the time you are working for “free” and the time the properties are self managing.
Exactly Neil, it’s the skilled labor, not the time. You don’t pay a lawyer for his time, you pay for his knowledge of the law and negotiation skills which are developed over time.
I do this to myself all the time. This is something that I constantly battle and my wife really pushes me to value myself correctly.
Hi Jesse – Thanks for your post. What exactly do you do for your consulting? Cheers, Sam
Thanks goodness for wives, mine does the same thing! Their loving support cannot even be measured.
I do all kinds. Right now I am doing system administration, and do web design and software development consulting on the side. I also do some system administration consulting where I advise and perform network, server and system upgrades.
Great points. I had an especially hard time determining my freelance rate. After my first few clients, I realized that I was providing something of real value to them and have since raised my rate. I’ve yet to have anyone flinch at my rates because I’m still a bargain since my overhead is so low.
Good for you Corrin, it’s hard to find that sweet spot but you can push the envelope a little and see what others think.
Oh that is so true. It’s way too easy to not charge enough or not believe enough in yourself. I think part of that is because things that we’re used to doing are easy for us to do — but they might be baffling to someone else.
It’s funny, they say do what you love and the money will follow but if you don’t charge up to your full potential, you really can’t sustain doing what you love. You will have to get another job and do what you love on the side, which is never as good :)
Loved this one bro, seriously great work :) Appreciate you jumping back on to respond to comments too – you are awesome!
Computer repairs is one of the most awesome ways to start a personal, solo business. I absolutely love computers, and I’ve been looking to study more ins and outs with it once I get myself a newer and better computer. My old one will sort of be my Frankenstein’s monster. ;)
Solo self employment is a tricky thing since there’s little room for cushion. Combining that with a side hustle is usually the best fallback, though.
Man, I’m glad. I started writing on a couple ideas I had and none of em really fit your blog until this one so I’m glad you liked it. And the discussion was pretty interesting here, so why not :) you have some awesome readers!
It is a great business. Not everyone has the mind to do computer work and everyone needs computer help now. When I ran my business full time, I did everything from networking to consulting on upgrades to training.
If you are considering going at it full time, an awesome book on the subject is: Start Your Own Computer Business ( http://amzn.to/dbwefc )
I read it and took a ton of ideas and advice from the book when I started my business years back.
Hi J.Money, I really appreciate u taking the time to write and share this article.The issue about “How often a freelancers service is devalued” struck a chord with me. I am a singer/performer. I cannot count the amount of times potential customers ask me to reconsider my price. Time after time it is the same however I know my worth. And eventually the right client knows that too!
Keep hustlin’, my friend! You’re worth every penny! :)