If You’re Gonna Be Self-Employed, Charge for These Two Things

August 8, 2011

in Business

 

self-employed

Time and expertise.

We all say that we charge for our time and that we charge for our expertise, but do you ever wonder if you’re giving away too much, free? Are you ever surprised at how much know-how other people will give away totally free of charge on their blogs? And if they’re giving it away there, they’re giving it away on Quora and LinkedIn and at their local networking meetings and over the phone and by email, too.

I made some mistakes early on by not figuring out in advance what I would charge for and what I would give away free. If you’re new to the self-employment world, start off on the right foot by rightfully charging for the expertise you’ve developed over the years and the time that it takes you to disseminate it.

Patrick Schwerdtfeger talks about three types of content you want to create as a business owner, in his book Marketing Shortcuts for the Self-Employed. He suggest that your beginner and intermediate content can talk about the what and why of your particular focus freely, but the “how” should always be part of advanced content and you should charge for it. Whether you charge for it in the form of an ebook, a consultation, a seminar, a webinar – whatever you decide – it needs to come with a price tag.

After reading from that book, here are some things I’ve committed to doing:

  • Categorizing content into beginner, intermediate, and advanced levels
  • Creating a range of advanced content, starting with something as low as $10 (such as an ebook) that will answer common questions
  • Paying attention to when I’m giving away advice that should be charged for. Taking notes is the first step to dealing with it

What I’ve Learned Since January 2010

I’ve lost out on a lot of money over the past year and a half as a self-employed person. The thought doesn’t even cross my mind to suggest to someone that they set up a consultation with me for my expertise. Schwerdtfeger suggests not playing the hourly charge game and instead creating packages with set fees that are based on the value being delivered. I’m guilty of giving away too much free advice and also playing the hourly charge game.

I’ve definitely learned some hard lessons but also learned some good ones. One time, with a brand new client, I put together a proposed list of packages based on her needs. At the last minute, I decided to add another one – this one was three times the cost of the others but also provided that much or more in value. What do you think happened?

She chose that new package – the one that cost three times more than the others. That pleasant surprise taught me a lot about why we need to focus on creating the best possible services for our target markets and value (price) them highly, rather than trying to find the balance between what we think they can afford and the very least we can make to still afford groceries.

Would love to get your thoughts on this. Is it too late to stop giving out free advice? What do you do, just ignore requests? Tell people to take a number? :) Share your experiences!

Image: Ambro

Tia Peterson August 23, 2011 at 8:11 pm

@Brankica hahaha I so wish I could take credit for it, but the idea is all Patrick Schwerdtfeger’s! lol

Brankica August 23, 2011 at 7:50 pm

@Tia Peterson That sounds like an amazing idea. I actually think it would fit perfectly on one of my sites. I am so stealing the idea :)

I can even see parts of it working on my blog. Like recently I put 3 blogs posts in a free download file, then I added a few pages to that file and made the extended version opt in only gift.

Yes, I was right. You are a genius!

Tia Peterson August 23, 2011 at 7:34 pm

@Brankica Hey Brankica – Re: content separation – Not so much on bizchickblogs. This blog is more like a regular magazine. Just general conversation.

Here’s an example, though, of how I plan to put it in action. There’s a how-to post on my other blog today. It goes in-depth, but not so in-depth that someone could pick it up and run with it. What I plan to do in the time between now and when the post starts getting some search engine traffic is put together an intermediate piece of content – a template that allows people to create food marketing plans. So the post was the beginner, and the template will be the intermediate. That will require an opt-in. Then, the advanced content will be the various forms of food marketing services I offer and all of the advanced is marketed via the opt-in list.

Brankica August 22, 2011 at 1:18 pm

Tia, I love this. I recently realized how much of my time and expertise I am giving away for free. The worst thing is that people expect more and more. Well, I can’t find more time and I am neglecting my other business because I am helping for free all the time.

I am slowing down and going to implement some of these ideas you listed. Love them.

Let me ask about this beginner, intermediate and expert separation. Is that something you plan to do here with the content and charge for the expert level or is that something you are separating when it comes to your clients! ?

PS you know this is going into the round up this week, right :)

Tia Peterson August 17, 2011 at 11:40 am

@onhighheelsprez You’re welcome! It’s a good idea for people to just avoid doing this from the beginning! I can’t think of many things that are worse than feeling like you left good money on the table, which is often what I feel like after I have given too much away. I even feel like that after writing certain posts. It is definitely true that we have to first prove that we’re worth paying for, but a lot of that lies in testimonials and content like ebooks, articles, and more.

onhighheelsprez August 16, 2011 at 11:31 pm

LOVE this post! Newly-inducted self-employeds get very nervous when they start looking for clients (myself, included). It’s the balancing act between enticing potentials to come take a look without giving the whole kit and caboodle. I really like the different levels of service to be offered – that’s such a smart way to cast a wide net and still truly bring in the right kinds of clients. Thanks for great insight and your personal takeaway!

Tia Peterson August 15, 2011 at 12:10 am

@alishamiranda.biz Hi Alisha! What sort of queries are you getting? Are they queries for advice or queries for what services you offer?

I would be very careful with queries for expertise or advice. These usually come from people who are familiar with you. I have a hard time with it from people I know, too. Just remember that to offer the “what” and “why” is fine, you just need to be careful with offering “how.”

Tia Peterson August 15, 2011 at 12:05 am

@keepupweb Ooh good, Sherryl! I really want to read the book again (I’m already done, LOL) with another person or two, because I wasn’t able to compare answers like he suggests. I would love to do that with you.

I’m so done with trial and error and even though it’s scares me, I’m launching the new company with much more respect for my craft. I just have to put faith in my marketing efforts and believe in the product enough to not even consider giving it away, simply because it brings so much value.

I think in terms of men vs women, I don’t know very many men who give a lot away. Most male consultants I know are great networkers but are quick to try and establish a client relationship rather than have too many free discussions.

Tia Peterson August 15, 2011 at 12:03 am

@SarahArrow Me, too. This post along with a number of books I’m reading have convinced me to ditch the hourly pricing thing, go with packages, and price highly. Fewer clients, but in my opinion, the ones willing to pay more are always the easiest to get along with. Very ironic but it is true!

Tia Peterson August 15, 2011 at 12:02 am

@mylifestylemax Couple of typos in there. Hope you get the point!

Tia Peterson August 15, 2011 at 12:01 am

@mylifestylemax Your 2nd point is crucial. In his book “Book Yourself Solid” Michael Port talks about raising prices, and realizing that if you do, you make have fewer clients but you make more than (or at least just as much as) you did before and you have a lot less hassle AND more time for yourself.

Ooh, I feel another blog post coming on… lol :) You just gave me a great idea.

As for your question, the answer is that it’s really, really hard. I have done that in that past, too. All I can say is that now that I’ve launched a new company with all new clients, I just don’t get into those situations anymore. I rarely ever charge by the hour now; everything is packaged up and email communication is simply part of the package. If you are the type of consultant who offers her valuable time by answering unlimited emails, be sure to tout that as a benefit of working with you and make sure that you estimate how much time you’ll be spending doing that per client and factor in that cost. And then don’t spend more time than you estimated. Be sure to try yourself well and respect yourself by establishing personal limits. Be okay with saying, “I’ll get to her/his email tomorrow.”

Thanks so much for your comment!

Tia Peterson August 14, 2011 at 11:54 pm

@LindaEsposito Hi Linda!

Someone wise once reminded me that the reality is that most people with the money are not going to hunt around for something they could pay for. Once I wrapped my head around that, I became much more confident as a consultant. For me, DIY-ers are not in my target market. In fact, I actually have that as one of the things I am not looking for. So, I would try not to be too influenced by all of the info online. A truly busy person with the money to spend for your services is most likely going to pay someone for expertise.

Or another way to look at it is that a lot of people find info online, but learning how to apply it is a different story. So, there will always be room for coaches and therapists because information means nothing without application!

I also love that you yourself are willing to pay for what you need. I think there’s a bit of whatever you want to call it, law of attraction or something else, in that you will probably attract people who are like you. You hire out when you need something, and so will they!

Good point about the movies. You’re so right. And car washes and Lia Sophia jewelry and chocolate. lol :)

alishamiranda.biz August 14, 2011 at 8:46 pm

“Paying attention to when I’m giving away advice that should be charged for. Taking notes is the first step to dealing with it” — this is so me. I feel like so many people take advantage of the pick my brain offers and never know when they’ve crossed the line into consulting fees. I’ve been trying to distinguish this on my own rate sheet but am still finding it hard saying NO to queries. can anyone give me tips?

keepupweb August 14, 2011 at 10:29 am

Hi Tia,

I wonder if men tend to give away as much free information as women do. You know that this is an issue that I’ve been struggling with for years. I really do like the idea of sharing the “what” and “why” while charging for the “how”. I’m going to keep that in mind going forward. I also ordered the book that you recommended. Thanks as always Tia.

SarahArrow August 14, 2011 at 6:33 am

Hi Tia, what a post – well timed for me as well. Getting the packages right is one area that I am failing on at the moment. It’s back to the drawing board for me!

closetwriter August 11, 2011 at 12:06 pm

Tia, great suggestion. I will pick that up this weekend. Thanks for the suggestions.

@Tia Peterson

mylifestylemax August 11, 2011 at 11:51 am

Tia, this post has my name on in it. I’ve been a open book of ideas, support, advice, guidance and help to both friends and anyone who needs help in the areas that I am knowledgeable in. I have noticed a few problems with that: 1. it takes away time and energy from doing what I need to be getting on with..work from clients who have already paid…AND..2. If I put a price tag on this time and knowledge, they would either require a lot less of it, or…best chance..I would be earning more. I have recently got a new client where I bundled together my services instead of charging individually or by the hour and it’s the route I definitely want to head down. The thing I’m really struggling with is how to manage clients who are really poor communicators and cost me alot of time in wasted emails..1 liners..of the back and forth type that don’t really answer the questions I have. Any advice on how to deal with that?

LindaEsposito August 11, 2011 at 11:49 am

Hey Tia–thanks for sharing your experiences and the marketing tips from Patrick S. This is a tough one–I once had a consultation with an online marketing expert who suggested to give the good stuff away free, as people will think, “Wow–if this is her free stuff, I can only imagine how great the paid stuff will be….”

Another challenge is that so much of biz and life coaching and psychotherapy (in my case) info can be found free online. I like to think that others would realize how long it takes to troll through the internet for all the free stuff, but who knows??

I recently needed a tech question answered, and I could not for the life of me, find the answer despite the wealth of info and tutorials out there. By chance, I met a woman later that day who mentioned her huz was a tech-y and he would likely have the answer to my dilemma. If she offered his “service” with the caveat, “I’ll give you the name of the product you need, but you’ll have to pay $27.00 first,” you bet I’d have ponied up the cash.

Love the idea to break up the packages into categories and to charge accordingly. We also have to remember that people pay for what they find valuable. Despite the recession and all the economic woes of the past couple of years, Target, movie theater, and mall parking lots are always full…

Tia Peterson August 11, 2011 at 11:13 am

@closetwriter Hey Christina – I think that’s a very female way to look at it, which reminds me a lot of Mika’s book. There is helping someone out, and then there is business, and they can’t (probably shouldn’t) be mixed. I would say, mentally divide the feeling between giving someone a leg up because you love and care about them, and work that should be paid for.

This will help you not to include those kind gestures from a friend with giving someone who really should be paying you advice just because you don’t know how to get them to pay for it. I’ve been in that second boat so many times, and it leads to resentment and frustration.

I’m reading a really good book that I want you to pick up and read if you can. It’s called Marketing Shortcuts for the Self-Employed. It has really short, 2-3 page chapters, with checklists at the end of them. It will really help you pull together a plan to decide what you should charge for and what can be given away freely. The specific chapters you should read are 20-25 (all very short, so in all it’s like 10 pages).

Christina August 9, 2011 at 3:00 pm

Oh Tia! I am smack dab in the middle of this now. I offer A LOT of free advice to friends just starting out. For me it’s a double edge sword. I had so many amazing people who answered my questions, and pointed me in the right direction. However, I feel I am quickly learning to decipher between those that just need a quick clarification and those that will suck you for all you are worth. I do need to establish how much I will charge and when, just like you said. Thanks for bringing this topic to the light.

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