How To Pick Your Price
Recommended reading: Company of One, 100 Blocks a Day, 10 Minutes is 1% of Your Day, What is your time really worth to you?
Most people live fewer than 25,000 days. What are your hours worth?
There are three conflicting ways to appraise time. All are worthwhile:
- Your hours are worth whatever you decide they are.
- Your hours are worth whatever the market pays for them.
- Your hours are priceless.
Your hours are worth whatever you decide they are.
Never resent your clients. Don’t blame customers for being cheap. Take responsibility for your minimum rates. You decide what you are worth.
Always choose a minimum rate that prevents resentment. If you aren’t excited to acquire customers, you aren’t charging enough.
Your hours are worth whatever the market pays for them.
This table lists wage statistics for 140 million occupations. Everybody thinks they’re better-than-average. Expect to make median (not mean) wages. Most people work just as hard as you.
On the other hand, remember that consumers rely on price to determine quality of products. When you charge $50 for a hamburger, people assume you make $50 hamburgers.
Here is an algorithm for optimizing your rates:
- Decide how many hours you want to work per week.
- If you are providing services more than 80% of the time, double your rates for new customers.
- If you are providing services less than 50% of the time, reduce your rates by 10%.
If reducing your rates causes you to resent yourself or your customers, choose a different strategy:
- go more niche
- start a parallel service
- lower your standard-of-living
- improve your skills via deliberate practice
- demonstrate your worth more clearly
Your hours are priceless.
Money is fake.
Put your price tag on your muscles; never sell your soul.
You are more than a collection of skills.
When your heart is on the market, the pursuit of success corrupts you. Live your values. Don’t compromise quality.
This essay is part of How to Productize Yourself.