In the past, I’ve had mentees tell me that they feel guilty about charging for their services, or at least charging a decent rate, because they’re driven by a motivation to help others. For these people, money is usually a secondary factor in running their businesses, and they often aren’t reliant on their income to make a living.

Having said that, many of us do start our own businesses because of a drive to help other people. We often want to run things in a very values-driven way, and we can do that because we’re the ones who are in charge. There is a huge amount of power to be found in small business in this sense. We get to make the decisions, and we aren’t bound by shareholders, a board of directors, or anyone else.

However, our desire to help others can often result in a reluctance to charge for our services, or to charge a rate that truly enables us to earn a decent living. This is particularly the case among business owners who come from jobs in sectors that are free to end users, such as education or healthcare. We can end up feeling guilty about charging people for the services we're delivering, even though we're providing value and helping others.

In this blog post, I’m therefore looking at how to price your services when your main aim is to help other people. More specifically, I’m showing you how it’s possible to help others and earn a decent living at the same time.

Pricing your services when your main aim is helping others

I often hear people talk about value-based pricing. With this, they're referring to setting your prices based on the value to the end client. This is something that can be really hard to quantify, and it’s also very subjective.

If you’re low on confidence or suffering from imposter syndrome, you’re far more likely to downplay the value you're giving to the end client. Similarly, if you’re working for a large multinational and the service you provide them with is likely to bring millions through the door due to their size, are you realistically going to charge them millions for your service?

There’s also another important side to the value argument that many people miss: any service you provide also has to provide value to your business. It’s not a one-way street, and the value to your business often comes in the form of financial remuneration. If you're going to provide a service, it has to be financially worthwhile for your business. Otherwise, your business isn’t a business at all; it's an expensive hobby.

There may well be some circumstances when you do decide you want to take on low-paying work or offer a discount on your services. These are usually those occasions when the value to your business isn’t financial. Instead, there may be times when the value of taking on a particular project might be the experience you gain, or something else that has nothing to do with money.

The great thing about being a small business owner is that you get to make those decisions. However, it’s important to make them consciously and intentionally. To me, this means understanding the minimum rates you need to be charging for your business to be viable and sustainable. It also means limiting the scope of low-paying work so it doesn’t have a negative impact on your finances.

If you want to help others, you can build in a certain amount of pro-bono or discounted work as standard within your business. But you need to be putting a limit on this and making sure you aren’t considering the time you spend on this work in your capacity for paid client work when calculating your rates.

When you are calculating your rates, if you want to run a sustainable business, always remember that your earnings need to cover both your business and your personal expenses in the time you have available to dedicate to paid client work.

The impact of the rising cost of living on your business finances

The cost of living has increased globally in recent months. This will undoubtedly have had an effect on your personal finances.

However, these increased costs will soon start hitting your business expenses too, if they haven’t already.

To be viable, your business needs to cover both your work-related expenses and your personal costs. If you’re reliant on your income to make a living, you don’t want to be ignoring these expenses in favour of helping others only to find yourself struggling to make ends meet. And even if you aren’t reliant on your income, you don’t want to find that you’re losing out financially either.

It’s therefore essential that you set your prices with your costs in mind. Otherwise, you’ll soon find that you’re no longer able to help anyone. It’s a bit like making sure you fill your own cup when you want to support your friends and family. Your business needs to be looking after you so you can support your clients. And this means taking the higher cost of living into account in your pricing calculations.

If anything, right now, you should be charging more, not thinking about charging less or working for free!

How to price your services as a freelancer

Whatever your circumstances and no matter what your main aim is, as a freelancer and small business owner, I would always recommend earning more money than you need to cover your costs.

To understand how much to charge, you should fully understand your business and personal expenses before dividing these figures by the number of hours you can realistically dedicate to paid client work. This will give you the minimum hourly rate you can afford to earn to make your business viable. But I would then recommend aiming higher. In Charge with Confidence, the rate calculator I share with my mentees also allows them to calculate mid-range and aspirational rates.

If you don’t depend on your business to cover your personal costs and make a living, you might find some helpful ideas for setting financial goals here.

In any case, when you do earn more money than you need, you get to decide what to do with that extra cash. There are various ways you can use that money, and you have the choice to help others if you wish, without your own finances being negatively impacted.

In the past, some of my mentees have decided to increase their prices by a small percentage so they can then donate that percentage directly to charity through their businesses. Another way of helping others would be to take more time off from your business to spend it volunteering for a cause you're passionate about. When you’re earning more than enough in the time you spend working, this is something you can afford to do.

When you look at things this way, charging decent rates can arguably enable you to help others more than discounting your services. You can help those who are most in need, and you can do it in a way that means they’ll truly benefit from your support.

However, at the same time, charging more than you need also gives you the freedom and flexibility to discount your services or work for free at times if you really want to, without having to worry about making ends meet.

Whether you depend on your earnings or have another source of income to support you, I hope I’ve managed to convince you of the importance of charging decent rates. If you’re driven by a desire to help people, by pricing your services higher than you need, you can actually offer more support than you’d be able to if you charged less.

If you’re looking to fully understand your business and personal expenses so you can set your prices at a level that will allow you to help others, Charge with Confidence is the programme for you. I’ll help you set financial goals through your business so you can support yourself and others in the best possible way. Click on the button below to find out more.

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