Overcoming undervaluing and disillusion.

It’s that time of year when people are thinking about making more money. You’ve set your goals, you have a sense of your budget (lol maybe, maybe not), and you are feeling like it’s time to be raking in a little more. You are hoping to make progress in 2019 toward a new financial reality, so it is time to start planning.

Perhaps you are one of those people who chronically underprices or undervalues yourself or your goods. Or maybe you know exactly what you are worth but have a hard time justifying it or asking for it confidently.

Either way the same principles apply in getting to a place where you can confidently ask for more money – or appropriately price your products or services. Some of you may think you should be earning more but the market doesn’t agree.  Or perhaps you simply don’t have the experience level to match your expectations. It’s important to know your value and know where the market lives so you don’t box yourself out of business.

Here are some guidelines to get you started. If you’re feeling lost or overwhelmed, you can always schedule a strategy session with me.

You Are Not Getting Paid for Your Time

Think about it. When you go to the doctor are you paying for her time? No. You are paying for expertise, education, medical equipment and supplies, insurance billing, trained nurses and staff among other things.

You, too, should be getting paid for your experience, your education, your preparation and training, and all the expenses necessary to run a business or home budget with integrity (taxes, insurance, mileage, depreciation of assets, and so on).

If you are independent, you should be charging significantly more than what an hourly or salaried employee would make. Employees enjoy certain benefits that you do not have access to, including employment taxes which pay into Social Security, Medicare and unemployment insurance. They also may have sick days, paid vacation, insurance subsidies, matching savings plans and other benefits. When it comes to billing, see yourself as the employer and not the employee.

As for employees, consider the personal assets required for your job and depreciation of those assets (computers, vehicles, etc), how much you need to be making AFTER taxes and what kinds of expenses are reimbursable. You don’t enjoy the same kinds of deductions that business owners do.

But – Measuring Your Pay Against Time is Important

If you divide the hours you work in a year into your annual post-tax income, what would you be making hourly? Is it what you think you’re making?  When I do this exercise with most clients the results are depressing.  Usually it comes to something below minimum wage – regardless of whether they are salaried employees or independent contractors or artists.

The “hours you work” needs to include time spent IN and ON the business. I need to factor in the time I work on marketing and operating my business, including following up with clients, when I think about setting hourly consulting rates. Not just the time I spend face to face with my clients.

Similarly, employees should think about the non-traditional time they spend on the job or on call. Do you travel for work? Are you in a non-traditional role? Do you get vacation time that you can actually take?

So, Get Clear on All That You Do

Write out your job description. Not the one you were hired with and not how the industry would describe your work – but actually what your roles and responsibilities are. Most busineses have us wearing several hats.

If you are independent, this should include things like bookkeeping, operations, and client/account management in addition to the goods or services you actually offer.

If you are an employee desiring a raise, this exercise is where you start. You may also discover ways to lighten your workload. Make sure to include everything you do that’s not formally within your job title – it will help you to assert your value or to see where perhaps you have slacked on your own personal boundaries (did anyone ask you to check your emails over the weekend? Probably not.).

You Should Be Negotiating More Than Money

For example, if you travel a lot for work and are also expected to maintain a 9-5 office schedule, there is an easy bargaining chip here aside from pay. It’s time.  I was the Communications Director for a large music festival production company. During the events, I was “on” for 72 hours straight not including travel time. I negotiated a few days off in between events to compensate for the time on site. I also shortened my normal office hours to account for the extended office hours required before events.

I am always surprised when I speak to employees who feel they cannot take personal time during the week – like gym time, therapy or coaching. Really this is up to you. If it is important enough to you there is usually a way to draw a boundary around reasonable weekly personal time just as you would if you needed to see a doctor.

By the way, that traditional 8-hour workday always included lunch. Stop eating at your desk.

You Should Know Your Market…
…And Be Realistic About Your Level of Expertise

I have seen some instances of folks just cracking into a new industry and charging pretty jaw-dropping rates.  Business integrity means setting rates or negotiating salaries that are reflective of your experience.

I’ve met people who just finished consulting programs and want to charge tens of thousands of dollars with extended commitments from their clients because somebody told them they could or should. High fees and extended commitments are the result of experience on the job and a notable reputation.  This would be an unreasonable place to start and often fails to bring in consistent business for the newcomer.

So, know your market. What can your target market afford? How are they most likely to engage with you? It may be smarter to serve more people for less money in the beginning than to assert yourself at high rates without much experience. It’s okay to experiment.  Just as it is important for employees to know the average salary in your area for the job you do or want to do. LinkedIn is a good resource for salary data.

And Finally – Worth is Not Wealth

Individual worth is not connected to how much you make or charge. Period.

If you keep tying your self-worth to your bank account or what people pay you, you are in for a very bumpy ride full of conflict and disappointment.  Ideally, you bring your value to whatever you are doing rather than finding value through what you are doing. You inherently have value.

Schedule a session with me to prep a rate or salary increase, rewrite your bio, update your LinkedIn, and generally help you position yourself most authentically in your career. We’ll strategize your year. Get prepared now.