Question: How can I begin to figure out what my skills are worth to other people?
Question by: Tiffany
Start Selling Them!
"The best way to gauge the market value of your skills is to put them on the market, then adjust your prices based on the response you get. It's a basic premise, but a lot of people are afraid to start, because they don't want to risk setting their prices wrong. If you go too low, increase prices with each new client. If too high, have a sale and see how it goes. Rinse, repeat."
What Does Your Industry Earn?
"I keep tabs on what other people in my industry charge, but closer tabs on the people a notch above where I currently am. I look at salary listings, speakers' fees and anything else I can find. And I keep tabs on what puts those people a level up — what they've done and how they've reached that point. Put all that together and you get at least a ballpark of what you could charge."
Talk Value, Not Price
"Never think about pricing strictly in terms of competition. Making price your strongest asset is risky and hard to sell. Think about the value your service can provide. How much time or money can you save people with what you offer? How can you help them enhance their own offerings and grow faster? People understand costs when they relate to their own bottom line rather than yours."
Consider the Delivered Value
"Don't charge for your time, but based on the value that you can deliver. If you show me how to save $1 million in IT expenses annually, you can charge me $500,000 for it, even if it only takes you a short amount of time to deliver that value! Customers will also pay for the perception of security -- guarantees and testimonials from past clients can help enormously here."
How Much Depends on Who
"Who you sell your skills to and where you position yourself impacts on your perceived worth. Think of it in terms of products: If you see a simple T-shirt at a discount retailer, you expect it to cost around $10. If you see a very similar T-shirt at an upscale boutique, you may pay $100. To increase your value, position your skills in a boutique marketplace where people expect to pay more."
Experiment and Build Upwards
"For starters, get a range going from low to high: what feels too low (not worth your time) and what feels too high (you feel uncomfortable saying it to a potential client)? Pick a number in the middle (or even skew low) to start; find a client at that rate and deliver incredible value; then raise it with the next person (and so on)."
Think About ROI
"When servicing others in any way, there is usually a tangible value that can be analyzed by the client. Consider that value you are bringing and quantify your work so that the client would theoretically be making a positive ROI on your relationship. Then, as you gain more experience and get better at your craft, you can elevate your price as results improve."
Supply and Demand
"Services root down to supply and demand. How many people provide the same skill set? What kind of demand is out there for your service? Do some research and adjust your price according to the results."
Don't Sell Yourself Short
"A huge problem that I see with a lot of young entrepreneurs is that they completely underestimate their value and their skills. Don't worry about what other people charge and take a look at how you value yourself. Think about how much your time is worth, what makes you different from everyone else, and the value you provide."
Factor in Your Costs
"You should take what you're thinking of charging and double it. People don't often factor in expenses and costs they will have to cover in order to provide products or services to a customer. In addition, you have creation, preparation and followup time that you need to factor into your pricing accordingly. Finally, don't forget the value of the time and money you've invested in yourself as well."
Forget Your Skills
"People aren't paying for your skills; they're paying for your results. For example, people aren't paying me for my system or support or accountability or methods. No, they're paying me to get the body they want. Once you realize this, it makes a world of difference. Focus on the end result you're providing. Once you get people thinking about that, you become far more attractive."
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. The YEC leads #FixYoungAmerica, a solutions-based movement that aims to end youth unemployment and put young Americans back to work.