Paul Jarvis

Charge what you’re worth

When I started freelancing I charged $25/hour.

The price wasn’t what I was “worth”.

The price wasn’t even what I wanted to charge. Of course I wanted to charge more. A lot more.

The reason I only charged $25/hour was because that was what the market was willing to pay me, i.e. I was getting work at that price.

You’ve probably heard the adage, “Charge what you’re worth.” But that only takes into consideration one person in a two-person exchange—commerce is an exchange between two people where both parties are supposed to benefit in some way. It’s also a little egotistical to assume you get to dictate 100% of a relationship involving trading something for money. If this was the case, some companies would charge $1,000,000 for a bottle of water, because water is essential to life (but then everyone would start drinking from the tap again). Or non-regulated power companies could quadruple their rates overnight, because charging electric cars and computers is important, right? And gosh darn it, power should be worth a lot!

Yet markets care not about worth. Markets care about value. That’s why your neighbor can freely put their house for sale for triple what the comps are, but he’s never going to sell his house because its value is not supported by the market.

The same is true in freelancing. Freelancers don’t make what they’re “worth”, they make what the market will bear based on the value they provide.

Given this reality, we should be careful not to tie our own self-worth or worthiness to our earning potential. That’s putting the importance of our insides in the hands of something completely out of our control (the market).

Our work is worth what someone else is willing to pay for it. It doesn’t mean a writer who makes $3,000/day is 6 times more valuable as a human than a writer who makes $500/day. That’s just what the market is willing to pay them for the job they do. For example, a lawyer isn’t a more valuable human than someone who answers calls at a support center. They merely do different jobs, which are valued differently in terms of salary (why different jobs command different salaries is a whole other topic).

The market also cares about experience and niche, both of which play into pricing. If you’re just starting out as a freelancer, like I was when I was charging $25/hour for web design, the market (and potential clients) can’t see your track record because you don’t have one yet. At the start, you’re basically charging less than you will be later because you’re underwriting your real-world education. Sure, you may already have an education in writing or design or programming, but that education rarely gives you experience in running a business and providing tangible value to clients. You charge less at the beginning so you can gain that experience and become more valuable to future clients.

If the market is already paying you, regardless of the rate or how much you feel you’re worth, be stoked! You’ve positioned your skills well enough in the market and shown enough value for others to pay you. Sure, you can work at increasing your rates and testing the market again to see if it can bear those increases, but it doesn’t have to happen all at once. It can happen over time, as your overall experience, proof and knowledge also increase.

After many years (a decade, plus), my rates moved from $25/hour to much higher. The rate increase was so gradual almost no one noticed. And the rate increase happened alongside the value I could bring to projects. Sure, I became a better designer over time, but as I did 100s of projects for clients, I started to understand the effects of my work on every aspect of their business. I could charge more because I knew how certain decisions could positively impact their revenue. Or how tweaks to copy (even though that wasn’t my job) could help with the design. Or what to track to see how the design was working (and if it was not). These skills developed over time, and my pricing increased as the market could bear it.

Never once did I assume a client was being a cheapskate or didn’t value my worth if they couldn’t afford my rates. I just knew that they weren’t a good fit for me. Same as if I walked into a McLaren dealership, asked how much a Senna costs (to buy as a work expense of course), and promptly turned around and left. It doesn’t mean I don’t value well-made vehicles (I surely do), it simply means it doesn’t make sense to spend a million dollars on a car if my business doesn’t make that much (and then some!) in a year. Not being able to afford something at the top of the market doesn’t mean I lack business acumen as a customer or client, it just means I know what makes sense and doesn’t for expenses in my business, given its current revenue. Commerce happens between two parties, and only happens if both parties get something they want. Sure, I may want a Senna, but McLaren also wants to get paid (they also want to start winning F1 races again…).

Pricing also needs to reflect those found in the market. You may be the best writer on the planet, but if your focus is local real estate, most brokers can’t afford $50k to write great blurbs per house. What we are able to make, or the upper limit to it has a lot to do with who we trying to serve. A similar blurb for a Fortune 500 company, to be used on a homepage viewed by millions, could easily be worth that amount.

Freelancing, like any business, exists to serve others. For a fee of course, but it’s still servitude. To remove the other side (potential clients) and simply rely on picking numbers out of the air based on what we think our work is “worth” is a sure-fire way to serve no one.

What our work is “worth” is what someone else is willing to pay for it. It doesn’t make us any more or less worthy than anyone else if our rate is higher or lower than what others charge.

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