Last week we talked about getting into the mindset of getting paid, this week we are sharing our practical tips on how to actually get people to pay you. Once you decide you are ready to move from giving things away for free to charging money, you then need to figure out how to actually start charging and collecting money from clients.
Today we are sharing, from our experience, some steps you will need to take in order to move your business to the next level.
Knowing what to charge
First of all, you have to figure out what you will charge clients. Don’t just try to pull a number out of the air. As we talked about last week, you have to have an arsenal of tools that you can use to back up your fees. Both of us did a fair amount of research in order to come up with a starting range. Do a Google search of fees for your field, speak with others who are not direct competitors but in similar roles, you should be able to get a good idea of where to start.
Differentiating between a lead and a waste of time
Once you have figured out your fees and you have your arsenal to back those fees up, you are ready to address inquiries for your product or services. There will be quality leads and there will be inquiries that are a waste of time. It may take time to know the difference, but after a while you will be able to judge between the two, for the most part. In our experience we have learned to be careful with time management when it comes to trying to win a job. People will always try to take advantage of your time and expertise, but when it comes to creating proposals or talking details initially don’t spend 3+ hours on anything before even knowing you have the job.
If someone reaches out to inquire about your product or services point them to your website and send some basic overview information. If after you share your initial information they are eager to move forward then you can spend a bit more time on it. But wait until you have a signed contract or an agreement in place before you spend hours on anything. In time you will learn how to know if someone is serious or not. Pay attention to the language they use in their request and know who it is you are talking to, know what their job title is in the company. If at all possible, try to connect with the actual decision-maker vs. someone who is entry-level and has to run it up the ladder.
An important thing to note, no matter what field you are in it is important to manage your emotions when it comes to business decisions. Don’t make money decisions based on your feelings. You can’t get too excited or too upset about inquiries or rejections. Things can change quickly and you just never know. So try to stay level headed when making decisions.
Don’t be afraid to talk money
Money can be an awkward topic and people tend to shy away from talking about it, but when you are addressing an inquiry it is better to just be upfront about your fees. Don’t be afraid to let people know a ballpark figure right away so they know what to expect. It will save you time and effort in the long run if they don’t have the budget. Give a range if you don’t want to say a specific number, you can even offer a few price points for different types of work if you want to give the client some options.
Dealing with rejection
As an entrepreneur one thing you will need to get used to is rejection. Both of us have experienced our fair share and we just know to expect it. In fact, in our line of work as speakers, we get told “no” more than we get told “yes”. But that just means that the one who said “no” isn't a good fit, and that’s okay.
On the flip side, you also shouldn’t be afraid to be the one to say no. If budgets aren’t aligning or if you don’t feel good about the company or the situation--say no. You don’t want to say yes to something you aren’t comfortable with and then go through weeks, months, or even years working on the project that you hate.
Creating proposals or engagement letters
When it comes to creating proposals, keep it short. There may be some industries who require long, detailed statements of work, but for the most part keep it to one page. Put it on letterhead with your branding, don’t just have a blank Word document or something generic. Make it look professional and make it easy for the person you are talking with to sell you internally if needed. As we shared before, when it makes sense, give clients options and different price points to pick from.
Tips on negotiating
All entrepreneurs at some point will get low ball offers. Don’t take it personally and don’t get angry about it. Also, don’t give in and settle just because you may lose a sale. Know your worth and stick to it. Nobody dictates your price but you.
As mentioned in the last episode, one option when negotiating is instead of lowering the price, keep the price the same but add value. Depending on your industry this could be many different things: adding on 2 weeks for a client to reach out after an advisory, adding on a book signing after a keynote, adding additional content for a course, including bonus materials, etc…
Once you discount your rate for a client, they are going to expect that in the future. It is hard to go back. So keep that in mind as you negotiate pricing. Be prepared to defend your pricing if needed.
Another thing you may have to negotiate, aside from pricing, is payment terms. Some companies are willing to pay upfront for services, but a lot will have red tape and bureaucracy that will cause payment terms to be longer. We have had people tell us we will get paid up to 60 days after a speaking engagement. There’s nothing wrong with asking for the payment terms you want in the proposal, if a client has an issue with that they will tell you. And If you don’t agree with what they propose, negotiate.
Keep track of payments
It is crucial to keep track of money coming in and money going out. Use any tool that you find useful, but we keep it simple and we use Google Sheets to keep track. Whatever you want to use, just be sure you are keeping track somehow. Know when payments are due and know when they are paid.
How to raise prices
As you get more experience and improve over time you will come to a point where you need to raise your rates. When you get to that point and you have to communicate it to your clients, make sure you share your reasoning behind the increase. Do you have more endorsements, have you written a book in your field of expertise, did you excel at a huge project, did you win some awards, etc…
Make it very clear to your clients why you have to raise the pricing. As long as you explain it well, most people will understand. For those who don’t, even after you lay out your case, then you may have to walk away. Just like our advice to you when you first set pricing, know your worth and stick to it. Don’t be desperate and don’t settle for less than you deserve.
We hope you find these tips useful and that our personal experiences help you get started in your journey to making money as an entrepreneur. Be brave, be confident, know your worth and go make money!