What You Got Paid And What You Should Bill Are Two Entirely Different Things

Updated: Jul 3, 2019


Photo by Vitaly Taranov on Unsplash

One of the reasons I started my own business is that I realized my skill set could be valuable outside of the corporate context. I wanted the autonomy of working for myself and designing a business that could work for our family as it grew.


And so, despite hearing wisdom to the contrary, I looked at how much I had been paid in my last job, and I used that number to set my new rates as a freelance Business Manager.

I was making $30/hour in my last job, and that seemed fair enough to me, so I charged my first client $35/hour.


A few months later, this was the result:


~I had to borrow money from our family account to pay my quarterly tax bill.


~I was working harder than I had in my last job, and taking home a third of the salary (hello higher taxes, business expenses, and non-billable work).


~When I got twice as good at something and could complete it in half the time, I got paid half as much for that thing.


Don’t be like me.


My mistake is that I saw my value in relation to my past salary, and didn’t think about the fact that my actual market value in that role was GREATER than my salary + every single one of my benefits + the cost of the office space I occupied + the free sandwiches I got every once in a while. The company was making money off of my work, as they should - that’s how a company stays alive.


If I had been in a client-facing role, I would have been billed to the client at an hourly rate substantially bigger than my cost.


In addition to that, the experience I was gaining as I built my business was worth more than the hours it took to accomplish what I did for my clients.


Time is a terrible measure of value.


What do I do now?


I see A Squared as a company outside of myself...a company that needs to pay me and my team while also having the resources it needs to thrive.


A Squared will only thrive if I price according to my value to my clients. I want my presence in a company to fuel their success so that they’re making far more than they’re paying me - and then we both win.


There are a lot of smart people out there talking about pricing, so I recommend reading them, but I just wanted to share my story as a quick reminder for you: even if you are a solopreneur, you are a company. You might not be a corporation, but it sometimes makes sense to take an idea or two from their playbooks (and as a point of reference, a large consulting firm will charge over $100/hour for a recent college grad they hired the week before).


You can think about your value differently and charge accordingly.

Contact

ashlee@asquaredonline.com

406-351-0830

  • Facebook - Black Circle
  • LinkedIn - Black Circle
  • Instagram - Black Circle
Contact Us

© 2020 by A Squared Online, LLC. All rights reserved.