Title: 
Lifestyle and Marketing: Notes on Setting and Raising Prices

Word Count:
673

Summary:
Find out what variables you should take into consideration while setting prices and what strategies you can use to raise your prices.


Keywords:
setting prices, setting fees, setting consulting fees, hidden costs, small business marketing


Article Body:
<b>Lifestyle and Marketing</b>

If you think you need to live large to attract business, think again. What attracts business is a valuable offer delivered to the right prospect with confidence, integrity, and consistency. On the other hand, it is almost impossible to attract business when you are desperate for work. 

Your lifestyle choices can underscore your commitment to an authentic and connected life, one lived in awareness and respect of the well-being of others and of the planet. Living these choices and letting them inform how you show up in the world can be a compelling aspect of your personal marketing formula. They can distinguish the offer you are in your chosen market niche.


<b>Insurance, Taxes, Retirement, and More</b>

Other considerations for the self-employed are medical, dental, life, and disability insurance. In addition, you may need professional liability insurance, insurance on your equipment and records, and insurance to protect you in the event of accidents on your premises. 

Self-employment taxes can take the unwary by surprise. Check with your accountant (you do have one, don't you?) and find out what your tax liabilities are likely to be. 

How do you plan to fund your retirement? There may be tax-advantaged plans available to you as a small business owner. Again, check with your accountant. (Have you noticed that one of the expenses you will need to plan for is accounting?)

It is easy to overlook hidden costs such as depreciation. Think about the furnishings and equipment you use and how often you will need to repair or replace them. Where will you get the money for these expenses? How will you pay for software upgrades or for a technician to debug your computer?

The following outline can help you understand how to set your own rates and why there is no "one size fits all" formula.

<b>How Much Do You Want to Take Home? Net Income Versus Gross Income</b>

Here's a partial list of expenses you may incur in your business.

Taxes 
Benefits 
Medical insurance 
Disability insurance 
Dental insurance 
Retirement 
Overhead 
Depreciation (it's not theoretical!) 
Replacing furnishings 
Replacing equipment 
Upgrading software 
Administrative overhead 
Clerical help 
Bookkeeping 
25-50% of your time to manage and market your business 
Vacation, Holiday, and Sick Pay 

<b>Where Does the Time Go?</b>

Hint: Keep a running list of everything you do for thirty days. Not a "to do" list, but an "I did" list. This will help you to understand where your time goes.

Sales and marketing 
Service (email, phone, troubleshooting) 
Email 
Proposals, Prospects 
Phone Calls 
Meetings 
Administration (bookkeeping, correspondence, contracts, reports) 
Training 

<b>Variables Affecting Prices</b>

Geography 
Demography 
Niche 
Experience 
Perceived value 
Skills 
Client capacity to pay/realize value from your work 
Cost of delivering services 
Competitors' fees 

<b>Is It Time to Raise Your Fees?</b>

Full calendar 
Reputation as leader or expert 
Turning away work 
Recognized author or speaker 
Prestigious affiliations or awards 
Advanced training/certification 
Improved services 
Increased costs 

<b>Strategies for Raising Prices</b>

Annual incremental increases 
Business cycle increases 
"Going rate" increases 
Be sure the going rate is set by going concerns! 
Do going rates reflect your costs and services? 
More work to justify rate increases of more than 10% 
Keep clients informed of how great you are 
Training and skill development 
Concern for their well-being 
Improvements in service and capacity 
How you saved them time or money 
How you made them money 
How you solved problems for them or for others 
How much you are in demand 
Create a mood that supports your declaration of value 
The body of confidence

<b>What Clients Want to Know When You Raise Prices</b>

What are the new rates? 
When do they go into effect? 
Give reasonable notice 
Consider giving current clients a grace period to adjust 
Why are they going up? 
What value will the client receive for the higher fees? 

<b>Adjust Prices to Manage Work Type and Work Flow</b>

Projects you don't really want 
Rush work 
Difficult clients 
Profit is commensurate with risk (and distaste!)