Pricing yourself correctly means you are setting yourself up to succeed. And in this blog post I want to encourage and help you to charge the prices that will make your business profitable. I will share my thoughts on how to price yourself correctly and share with you the resources that have helped me along the way. We are in this together!
“Women have always worked. They have worked unpaid, underpaid, underappreciated, and invisibly, but they have always worked. (…) We have to start recognising that the work women do is not an added extra, a bonus that we could do without: women’s work, paid and unpaid, is the backbone of our society and our economy. It’s about time we started valuing it.”
― Caroline Criado-Pérez, Invisible Women: Data Bias in a World Designed for Men
The importance of financial independence
As women we are programmed to put ourselves last. We often put our needs aside for our family or friends. It sometimes feels like a radical act to give yourself the time, love, space and money you need.
I noticed that when I became a stay-at-home mum that I found it so hard to spend money on myself. Being financially dependent caused me to feel so guilty for using money on myself. I would not buy new clothes or get my favourite perfume. I just did not touch the family money for myself, but only spend it on my child. This is something I still find hard to do.
I noticed that I needed to become financially independent. That having my own money would mean also having power. Don’t get me wrong, my husband did not block access, however it did shift the power balance between us, at least in my own mind.
Also, I want to have the power to leave the relationship if I need to and not be ‘trapped’ do to being financially independent.
“In the UK, women make up 61% of those earning below the living wage, and the Insititute for Fiscal Studies has found that the gender pay gap widens over the twelve years after a child is born to 33%, as women’s careers – and wages- stagnate. (…) This all leaves women facing extreme poverty in their old age, in part because they simply can’t afford to save for it.” ― Caroline Criado-Pérez, Invisible Women: Data Bias in a World Designed for Men
A BIG pricing mistake
This business, Portray Your Story, is not a hobby for me. This is my way to become financially independent, while doing something I wholeheartedly love. When I started my business, I based my prices on what other people were charging. A BIG mistake. When you base your prices on your competition you run the risk of failing you and your business. You do not know if your competition does this as a hobby. Perhaps they do not aim for financial independence. Or they might have a huge trust fund, or inheritance. What I am saying is that you do not know their financial circumstances.
How to make sure that you are profitable
As a fellow business owner, and a fellow woman who wants to see other women succeed. I urge you to charge correctly for your services or products. Your prices need to be set to:
– give yourself an income
– be able to contribute into a pension pot,
– to pay for further education (so that you can always give your clients something better)
– to cover your costs of running your business
So, let’s look at what you need to think about when setting up your prices:
1. Your working hours
It is important to first understand how many hours you can and want to work each month. Do not forget to give yourself any holidays and sick days by taking these of the total days you want/can work. Now ask yourself how much time you spend on client work. Some of your days and hours will be working on your business, like on marketing campaigns. Take of the hours you work on your business. The hours left are the actual hours spend with clients and with these hours you can calculate how much you need to charge to make a living. Find out how much time you spend on a client, so you understand how many clients you can handle each month.
2. Your cost of doing business
Once you know your hours it is then also important to understand the costs of running your business. How much do you need to earn before you make a profit? The cost of doing business is often much longer than you think. In this you need to include any training you want to do that year, and do not forget your childcare costs of course. I have made a simple Excel sheet for you to fill in so that you can start to understand your Cost of Doing Business: Cost of Doing Business Download. Do make sure you download it first before making any changes to the document.
3. Giving yourself a salary
Be a kind boss to yourself and give yourself the salary you want and need. You have to pay yourself much more than minimum wage so that you can cover yourself in times where business is slow, which often happens when you run your own business. When thinking of your salary it is important to include the taxes you will pay on it. Make sure you can pay your rent or mortgage, that you will be able to save for a rainy day and also pay into your own pension pot.
Money and mindset
Charging the correct prices can also mean you have to undergo a money mindset switch. I am worthy to have a good independent life now and when I am old. You are worthy of this too! It angers and saddens me that women, especially mothers, have less money than men. It upsets me that there is a big pay gap between me and my husband. However, I am determined to change this. Say this with me and notice what feelings are triggered: ‘Abundance is my birth right’. Just saying these words triggers a whole lot of resistance. I am working on my own money blocks slowly, but surely. And I recommend you to explore yours as well.
Further useful resources about money and/or mindset
I use Penfold as my pension provider. They allow you to pay in flexibly, which as a freelancer allows me to sometimes put a bit extra when I can or a bit less when times are tough. When you put in money in your pension you will automatically get a 25% tax relief top up each time you contribute into your Penfold pension. So, when I put in a £100,- I automatically get £125,- into my pension. I have personally very little pension saved so far, as I only started saving for it last year. I want to encourage you to start your pension and not let yourself be deterred by not being able to put much in there. Even if you can only afford to pay in £10,- a month, it is better than nothing! Just start with as much or little as you can and take it from there.
When you use my Penfold link to set up your pension we each get £25,- into our pensions! Who0hoo!
These two courses are specifically for photographers, but I do recommend investing in a course suitable for you to help you get your pricing correctly and to understand your numbers. The creative side of my business comes easily to me, but running a business does not come naturally. So, I made the decision to put my investments for my business here.
I bought Annemie Tonken her course ‘The Simple Sales Blueprint’ and I love the sales system she has set up for photographers. You will learn why she does her sales in this particular way, but also she will explain step by step how you need to implement her strategy. Which really haps you not getting overwhelmed. The course is even worth the money just for all the email templates you get with it and the tips on how to automate your systems.
The Togs in Business membership programme for photographers where you are taught about marketing and running a sustainable photography business. There is a step by step roadmap that starts you with figuring out your ideal client, helps you calculate your prices and helps you with your marketing. I have learned about creating leadmagnets, writing nurture sequences and content marketing. This is a membership I cannot recommend highly enough as each month there is a new training to help you run your business better.
It is not only important to be pricing yourself correctly, but it is also important to learn to handle your finances well. In his book Mike explains on how to deal with our finances so that we can run a profitable business.
Yes, this book has the worst title I have ever seen! It is extremely off putting, however another photographer and friend was so adamant for me to read it that I succumbed. And I do really believe that our past experiences and our thoughts around money can create internal blocks to pricing ourselves correctly. Denise in her book teaches you to break through these money blocks and I found it very useful to analyse my mindset regarding money.
This book is a must read to understand how biased our world is towards men. It will make you feel furious and empower you to not be part of any of her sobering statistics. We cannot fight what we do not know, so I do think this one of the most important books to read for any woman.
What resources have helped you with running a profitable business? I’d love to hear your tips so that we can help each other reach our financial goals.
This blog post contains several affiliate links, which means I earn a few pennies from qualifying purchases. It would not cost you anything extra! I would never recommend anything I don’t use and love myself, so it’s a way of earning some money through helping you with my articles and reviews!