How to earn the money you are worth

Yesterday I spent an hour with a new client we’ll call Jasper who is uniquely qualified in his field, which is coaching up-and-comers in the music business. He provides fantastic value, but his potential clients are switching careers and he’s not sure what to charge. What can they afford at this precarious time in their professional lives?

He created a good, strong package of services, and priced it at $2500 payable over 3 months. Then we examined his approach using this series of questions:

1. How much do you need to earn this year to support your family? A: $100,000
2. How much does that work out to per hour, based on billing about 1,500 hours a year once you are up and running? A: $100,000 divided by 1,500 is $67 an hour
3. Does that cover your business expenses as well as your personal and family expenses? A: No. I’ll have to pay for my web site, ads, printing, travel…all that will add another $25,000 at least
4. So to just break even you need to earn $125,000 or $83 an hour? A: Yes
5. How many hours per client will it take to deliver the coaching package you’ve created? A: 60
6. So what do you have to charge for it? A: 60 hours x $83 = $4,980
7. How much more can your clients make on average per month after working with you? A: Minimum $2,500
8. So you are asking for less than 2 months of the incremental income you are going to create for them – does $4,980 feel “right”? A: Sure does!
9. How many clients will you need at that rate to earn $125,000? A: 1500 total billable hours divided by 60 hours per client is 25

Jasper was about to charge about 50% of what his program was worth! If he had gone forward with a program price of $2,500, he would have worked for $42 an hour, 50% below what he needs to bring home and way below the value he creates for his clients.

His only hope would be to double the number of clients he works with, a recipe for disappointment and ending up overworked, exhausted and broke.

Jasper cannot earn the living he needs to working with people who can’t afford to pay him what he’s worth. Neither can you.

Do the same calculations that Jasper did, and find out what you are really worth. Then focus on finding clients who value what you do and, very politely, decline to work for anyone else. It may be scary to contemplate, but there is really no option.