A daily email about monetizing your corporate expertise. Give me ~1 minute a day, and I'll help you turn what you know into your most differentiated and lucrative asset.
💡 Let your inner critic choose your pricing model
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Disclaimer: You could talk about pricing forever. There are nearly infinite resources, podcasts, and courses on the topic. I even know a handful of brilliant experts who have dedicated their careers to consultant pricing strategy. All that to say, I don’t claim to have a magic bullet pricing approach. Instead, I’ll simply share a few tips and anecdotes that hopefully help you shape your pricing mindset as a soloist in the expertise economy. _______ If you’re just starting out on your own, perhaps writing your first proposal, one of the early questions is:
This happens for many reasons we can explore later, but for fun, let’s just play out what a reasonable hourly rate might look like... 💠..and what your thought process is along the way ​ Let’s start with a modest revenue goal: $150,000 💠Would be nice to make my old corporate salary ​ Divide by 2000 hours / year (50 weeks x 40 hrs) =$75 / hr 💠That seems low for me. Compared to what? I don’t know, but seems low. ​ x 1.5 because you carry your own costs (insurance, taxes, etc.) = $112.50 / hr 💠That’s like $1,000 a day! Nice! ​ x 2 because you need to spend 50% of your time on the business, and therefore are not ‘on the clock’ = $225 / hr 💠Ok, this seems like it’s getting high ​ x (12 / 10) to budget some time off (2 months) = $270 / hr 💠Seems like I’m getting greedy ​ x (4 / 3) to account for gaps between projects = $360 / hr 💠Who do I think I am? ​ $360/hr to simply replace a modest corporate income. ​ What if your revenue goal was $200k? = $480 / hr 💠Sheesh. ​ $250k? = $600 / hr 💠How the #$% am I going to pitch that with a straight face. ​ If this simple math exercise has made you question what you thought was a ‘good’ hourly rate? Wonderful. ​ If this exercise has made you reconsider self-employment? Don’t leave yet. There are many other ways to set your price that don’t involve selling your time. ​ If this exercise has shaken you out of defaulting to hourly billing? Excellent. You can thank your inner critic 💠And its arbitrary view of what you’re worth. 🙃 💡 -Wes |
💡 The Lightbulb
A daily email about monetizing your corporate expertise. Give me ~1 minute a day, and I'll help you turn what you know into your most differentiated and lucrative asset.