If you are making half a million Rand per year, or less in your business, it is not a business, it’s a job, and it’s not a good job either. If you are loosing money in your creative business, then it is not a business, it is a hobby.
People (and women, especially) who start their own creative businesses tend to have a few things in common. They have an incredible need to be of service. We need our work to be meaningful, we want our passion to be appreciated and as a result we are often too generous. We want as many people as possible to benefit from our talent, passion and business.
One thing that most creative business owners are guilty of is undercharging. Undercharging can come in various forms such as working for free, charging less than a promote value, working longer hours than you bill. And let me tell you, most of us are guilty of this.
If you undercharge you create a cycle where nobody wins, least of which is you.
Here is why:
- If you are undercharging, you are not making money and that’s not fun. Eventually, you will start resenting your clients and your business.
- Undercharging is expensive – for you.
- You will be exhausted. If you charge less, you have to work more.
- Undercharging is unfair, especially to your clients who paid the full price. It is best to figure out your pricing and stick to it. Click here to view a rates calculator.
- Undercharging is bad for your clients. You cannot grow your product, expand your range, obtain new skills or increase the quality of your product if you cannot afford to invest in yourself or your business.
Your price reflects your value, expertise and your status in your field. When you undercharge are saying this:
- You are insecure about your abilities and lack confidence that what you deliver is good enough. You do not value your own services.
- It shows that you are desperate, and willing to take business at any costs and pick up the pieces afterwards. This is a poor long term strategy.
- You are inexperienced and you do not have a clear understanding of your product/service, its cost to you and what it is worth to the clients.
- You do not have a competitive advantage.
- You want problem clients. People who underpay also tend to make you crazy in the process of working with them. they will refer you to the similar crowd, and so the cycle continues.
So ask yourself, is your passion worth the financial burden your are putting yourself through? How long can you go for until you have to admit defeat, and leave hanging your head in shame resenting the world? If you love your chosen creative field and want to touch people with your talent and art, you have to figure out how to do it in a sustainable manner.