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.