Business, CPD, ELT, Freelancing

How much should I charge?

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In my post Now What? (part 2), I left you with this FAQ that I’ve seen on several groups I follow. It is a common issue for freelancers in many fields, not only in the ELT industry.

0.43 seconds. This is the time it took to get the staggering number of 11,300,000 results to the question How much should I charge? 

You can tell by that figure that there are thousands of blogs and articles offering advice. So I asked myself, what could I possibly say about that?

I decided to take a different approach. I’ll start talking about 3 pretty common, yet BAD, ideas that may tempt you when you set your price, and why you shouldn’t even try them.

Then, I’ll share my recommendations on the subject, and what I say when someone asks me that question.

pexels-photo-374918.jpegBad Ideas

1: Pulling a number out of thin air.

If you charge per hour, I bet you’ve started with a number, either based on how much a colleague is charging, or a number that somehow makes sense to you, and stuck with it.

Here’s the thing, you shouldn’t pick a random number based on a few hunches without analyzing your costs, your niche, and doing some planning, otherwise your price will be off and you risk losing money in the end.

 2: Reducing your rates too much to compete in your market in order to secure more students.

You have a full schedule and feel happy – at first. You’re teaching 10 -12 hours a day to make enough to live comfortably. After many months doing this, you’re exhausted. Now you realize that working so much has a cost, and the pay doesn’t seem to cover it. Guess what? It never will! That’s why you need to get it right from the start.

3: Not being prepared for a meeting with a prospect.

When you meet a prospect student, you have to be prepared. You have to know all you can about that person. Where they’ve come from, where they are now, and where they wish to go. Without this preparation, you may seem hesitant and lacking in professional authority. They will see that you are hesitant, unprepared, they may ask for a discount and you will either say yes or you will lose that student because you didn’t prepare.

How can you find out about the student’s needs and goals? You have to do a needs analysis. I like to do it during my initial interview, preferably in English, unless the student is a beginner. I don’t charge for this interview. It’s a way to introduce myself, offer my services, and to get to know the student. (more on that later)

Remember, you have a business now – closing deals is part of your job.

So, now that you’ve seen some bad ideas, let’s answer the main question. For that we need to see the bigger picture.

Think about the value you offer, your costs to deliver it, then

put a price on it

Try doing it as an exercise. Just like when you’re creating a lesson. It’s like with any other planning. You need the elements and then you put all the parts together. Grab a piece of paper and jot down a few things: Think about your value, how much you’ve invested in yourself to get where you are – the courses, degrees, etc, the costs you have, and then finally decide on your price or rate. Here’s a quick explanation:

Your Value

Your experience, the investments you’ve made on your CPD (courses you’ve taken, books you’ve purchased, professional events you’ve attended, etc.), all fuel the solutions you develop and bring to your students! If you deliver results, testimonials will follow. This is worth a lot!

Your Operational Costs & Unpredictable Expenses

We have fixed costs (utilities, rent, subscriptions, etc.) and variable costs (wages if you have a secretary or assistant, materials you print on occasion, etc.)

Unpredictable expenses: Any business will have those. Replacing or fixing old equipment, purchasing new materials for class, furniture, etc.

Look up the terminology: variable costs and fixed costs. It will help you. Think about creating a business plan if you don’t have one yet. (Check these links on my post. They may help you.)

Your Market

Are you restricted to a city? A country? Are you global? The larger your market, the more people you can reach, and more importantly, you’ll be able to reach the right students who are more willing to  pay according to your value. When you expand, you can choose your students. Not the other way around. You need to know your market in order to realistically determine your price.

Your Niche

Identifying your niche will help you see your place in the teaching market more clearly. It is easier to put a price on something that you can easily describe. For example, if you teach IELTS preparation courses it’ll be easy to say how long it’ll take them to get their target score and all the specifics involved. On the other hand, if you don’t have a niche and you teach just about anyone who contacts you, then it’ll be harder for you to set either a timeframe or price that aligns with your student’s needs and the type of classes they need. It’ll require a lot of experience, trials and errors to get it right.

 Your Savings

Any good plan involves being prepared for the future. Even though freelancers often work harder than 9-5 employees, we’re probably more likely to skip taking the vacation time we all need to recharge. In order for us to enjoy those days at the beach we must set some money aside. There are also unpredictable events such as sickness, accidents, and making payments towards retirement. We can’t forget that! These have to be accounted for in our hourly rate too.

Final Thoughts

Measure twice, cut once. When it comes to pricing your lessons or your services, this axiom fits perfectly. Don’t be hasty. Think about it carefully. Take it all into consideration. It will pay off. (Pun intended.)

Be careful about offering promotions, discounts and lowering your price too much without reflecting on the bigger picture. Remember we have bills to pay and we have to account for sick days too!

Show your prospects what you can do for them before you talk about price. Offer to meet with them for free. Not a free class. A free meeting. Show them you have a plan (a solution) to help them reach their goal (solve their problem). Then they’ll see your value. Now you can tell them your price.

So, next time someone asks you that question, just say, Do you have an email for me to send you some information about my services? How about we schedule a free meeting to discuss your needs?

PS. Food for thought: Here’s a less than 9 min TedTalk on Knowing your Worth by Casey Brown

Till next time! Thanks for reading!

3 thoughts on “How much should I charge?”

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