I don’t like to be misled. Like I was when I grabbed a mesh bag containing four avocados at Trader Joe’s Sunday morning. I saw the RIPE label on the skin and thought, “Great! I’ll use these tomorrow to make that salad I love.” When I got home and cut the avocados loose from the bag and gave them a squeeze, I knew they weren’t ready to be used yet. That’s when I noticed the small print saying “when soft”. I had been manipulated and misled by the large red print. I resented it.
Gaining our customers’ trust is important and anything that disrupts that process can create ill-will.
You are not alone if you have given an estimate or proposal for your goods or services, only to realize a few days or weeks into the project that you have underestimated your own time and value. Welcome to the club! This is part of the learning curve in entrepreneurship.
If there was one book that had the exact answer for how to price a job, it would be an all-time best-seller. The fact is, no one can say for sure what YOUR time is worth except you. And, you have to figure it out as you and your business grow over time.
A client recently shared with me that she had undervalued her creative services and asked how she might go about collecting the shortfall from her client. I recommended against this as a practice or even one-time happening. I am not in favor of passing along your learning to the person who is paying you. We, as business owners, are responsible for the cost of our own education. My friend Terri Lonier* calls it “tuition” and says “there’s no good way to ask for that money.”
Here’s the growth challenge. Rather than underbid a job, take the time to calculate your anticipated hours labor, materials and overhead. Be generous with yourself, as you know that things always take longer and that unexpected occurrences will pop up during any project. Account for those in your budget.
The risk here is stating your true anticipated cost upfront. The amount may be surprisingly high to you, but you’ve got it justified by your carefully considered mathematics. You may be pleasantly surprised by your prospect’s acceptance of your estimate.
If you believe in the saying, “Pay me now, or pay me later” you’ll appreciate the wisdom of asking upfront for what you really deserve rather than trying to make it up with explanations and pleading after the fact.
While I know that pricing can be a tricky issue, it’s better to gain clarity around your costs before, rather than after, the deal is made. Like most customers, unhappy surprises produce resentments.
*I had the privilege of being interviewed by Terri for her online newsletter. Here’s today’s issue.