How did you set your very first self-employed, entrepreneurial hourly rate?
Pat yourself on the back if you did some research on competitors, crunched the numbers on the amount of hours you could bill & the amount you needed to earn, and set a rate that reflected both.
I didn’t do that when I started my business. And I hear that many of you didn’t either.
Most of us didn’t set out to become consultants, freelance designers, and New Economy entrepreneurs. Nope, we got our liberal arts degrees – or misguided business management degrees – and tried to enter a job market that didn’t want to have us.
We talked about experience (or lack thereof) instead of value, of skills instead of significance. We polished our resumes and customized cover letters.
And we got jobs ranging from $10-15 per hour.
And we cursed our parents for telling us we could be whatever we wanted to be when we grew up. We cursed society for wanting automatons instead of freethinkers.
Frustrated & desperate, many of us have stepped off on our own. We gather in coworking spaces, corners of the internet, and networking events. We talk about doing business differently and making money with meaning.
But many of us are still holding on to the one thing that threatens our ability to make this happen: the way we price our work.
We’re grounded. We’re grounded by the traditional employment model we’re trying to escape. We’ve been sitting on the tarmac with no hope of taking off into the wild blue yonder or our vast earning potential.
So what gives?
An opposite phenomenon is at work in pricing. “Anchoring” is the practice of using a cost-prohibitive product to make another product seem reasonably priced.
It’s not always a scam – it’s often just smart. For example, I offer individual coaching at one rate and more affordable group coaching at a second rate. You know you’re receiving a comparable service with stellar results but the lower price on group coaching looks much more accessible. Without the individual coaching price (more than double!), you might still balk at the group coaching price.
With wage “grounding,” we are setting rates based on old employment models.
When I first set my consulting rates, I set them at $25 per hour. That was double what I had earned before so I figured that was a great place to start.
But the reality of self-employment is nothing like the reality of traditional employment. Double my old wage still resulted in working for pennies per hour. Sound familiar?
The first step towards beating this grounding effect is to realize that it’s happening and then to declare:
My previous jobs do not define my current or future value in the market.
Okay, I’ve done better with rallying cries. But sometimes straightforward is where it’s at!
Go ahead, say it out loud:
My previous jobs do not define my current or future value in the market.
Most likely, in your previous employment situations, you have had to fit your skill set into a predefined container. That container came with a price tag (the lowest price someone could pay another human being to do that work) and, while you may have had some negotiating power, the price was set.
You are no longer defined by a job “container” – you are instead constantly defining & redefining the skills that are of value to you and your clients. This gives you the opportunity create the optimal circumstances for your earning.
If $50,000 – $80,000 – even $150,000 per year or more has never seemed realistic, you can create circumstances in which they are.
Your earnings are not determined by what you have earned in the past but by the optimal circumstances you create around the valuable skills you have.
Your past wage is rendered obsolete.
You can choose to be grounded by your past wages or you can choose to be anchored by your goals.
You can choose to bemoan your past or celebrate your earning potential.
You can choose to concentrate on the going rate for your skills in the traditional market or you can create your own market based on what makes you unique, highly qualified, and oh-so-perfect for the job.
What’ll it be?
