3 Money mistakes you don’t want to learn the hard way

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I want to share a few of the common money and pricing mistakes freelancers do that can sabotage their earning potential. These were things I was doing in my design business and didn’t even realize it.

I’m going to show you what NOT to do. If you are doing any of these things, you’ll now know to avoid them.

Mistake #1: Not talking about money early enough

There is a belief instilled in us from very early on that it is impolite to talk about money.

The problem with that is it carries over into the business setting and causes us to not ask the money question early enough. Which then causes all kinds of issues.

Sidenote: Once you finish, read how 4 freelancers built recurring revenue models that changed their business. You'll love it.

One of those issues is that you might over-invest in the sale before understanding if the prospect is a good fit for working with you.

For example, if you’re approached by someone to design their new brand identity. In your head, you are thinking X price, but the prospect in front of you might be thinking Z.

Well, you might be so far apart price-wise that no amount of convincing will get that prospect to anywhere near where you want the price to be.

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Maybe you are thinking $3,000 for the brand identity, and the prospect is thinking $300.

You put all this work into getting a proposal together and envisioning what the new identity might look like. You might even start creating the design BEFORE (eek!!) the prospect signs off on the project.

Then you present your price to the client, and they tell you it’s way too expensive. Sheepishly you ask, “Well what could you afford?” And they say $800.

You’ve already latched onto this as a project you want to work on, and because you have all this time and energy invested in this “project”, you agree to a massive price cut.

Wait, it gets worse…

Because you are doing the work for so little compared to what you initially envisioned, you are not happy with the client or the project. And when the client starts asking for never ending revisions—after all, they’ve also shelled out more cash than they were expecting to—that’s when you really want to start tearing your hair out.

So now all of your time that could be spent with better clients gets taken up by these clients that are a poor fit for working with you. And all of it can be traced back to not asking about their budget early in the process.

Mistake #2: Devaluing yourself and competing on price

When you decide that LOWERING your price is how you are going to win the work, you start a downward spiral that is a race to the bottom.

If you say to yourself, that you are just going to be cheaper than the next guy, you give your prospect an easy way to compare you to that next guy. And if that other guy is cheaper, you lose.

In my email course on pricing, I talk about how from the client’s point of view, a lower price can actually be seen as a sign of lower quality. That’s why you won’t see any big time brands or businesses searching for quality work on sites like Fiverr or 99designs.

If it were price alone they were looking for, everyone would be there.

That’s not the case.

They want:

  • Good quality work
  • Better service
  • Reliability

So if you want to raise your prices or get paid a decent price for your work, why not concentrate on creating better QUALITY work? Why not use those attributes as the differentiators instead of price?

Mistake #3: Not believing you are worth it/imposter syndrome

The biggest mistake of them all is really more of an affliction than a mistake, but not dealing with it is the thing that will single handedly hold you back from earning more in your freelance business.

Imposter syndrome is where you think you’ll be found out at any moment that you are a fraud. A phony. Not worthy of the task at hand.

If you don’t believe you are worth it, your client or prospect is certainly not going to either.

The strange thing is that this afflicts everyone at one time or another. Doesn’t matter how accomplished you are. It happens to professional athletes, CEO’s of Fortune 500 companies and even presidents.

Bad news is it doesn’t entirely go away either.

But there are ways to help deal with it.

The one I found worked best for me is to turn your gaze away from so-called “experts” and stop comparing yourself to the people you feel are above you in your field.

If you look at it like you are the wiser more experienced person between you and your client, then it’s just you helping someone who doesn’t know quite as much as you do on the subject of branding, marketing, writing, or whatever it is that you do.

An analogy that works well for this is to see yourself as the 3rd grader helping the 2nd grader. That’s it. Don’t think about the 10th and 11th graders. There is no reason for them to be in the conversation.

Think of it from that perspective and you’ll be able to suspend imposter syndrome long enough to confidently quote the price you’ve been wanting to.

Avoid some of these money mistakes mentioned above, and you’ll be on your way towards accomplishing your goal of earning more from your freelance business.

Do you feel confident with talking about money? Why or why not? Leave me a comment below.

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About Ian Vadas

Ian Vadas is a designer and the author of Work With Clients You Love. Get the eBook to learn how to select clients that pay well, treat you with respect and allow you to do your best work.

For tips on getting paid and maximising your freelance revenue, join the FREE email course Pricing For Freelancers.

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Comments

  1. This is so true.

    As creatives, I am sure we have all, at some point, made one or more of these errors. Never undervalue yourself or your business. It can be tempting when work gets a little lean to cut your pricings to try and attract clients, but it will only have the adverse effect.

    Just sit tight, promote yourself, and the work you want and deserve will come through.

    Great article, many thanks for highlighting these issues.