According to Jeff Wald, founder of WorkMarket, the number of freelance independent consultants, contractors and coaches is expected to grow to nearly 20% of the American workforce. Lay-offs, pay cuts and downsized compensation packages led many to ditch corporate politics to become their own bosses. With cheaper technology, cloud-based resources and the plethora of freelance job platforms, it’s become much easier and very common to jump ship.
The Transition from Corporate to Soloist
Seemingly enjoying the best of both worlds, independent consultants and soloists have the ability to work for themselves, work when they want, and charge what they want. Now, some of you who have actually chosen this path may be thinking “It’s not so easy!” That’s because you realize there is a lot more to running your own business than just performing the work for your customers. You also have to spend time on landing new clients and running your business.
Today, as an independent consultant or coach specializing in your area of expertise; you are what we at Rainwerks call a “soloist.” You complete the work you are hired to do and, you handle all the administrative burdens associated with running your own business. Travel and expenses, sales, accounting (taxes!), legal, etc…it’s all you. The good news is, unless you are a disorganized mess or living under a rock, you are likely using the aforementioned cloud-based resources, leaving you able to focus the majority of your efforts on developing revenue.
As a soloist, generating enough revenue is the single most important component of your business. Every independent consultant realizes that, without clients, he or she would be simply another number on the government’s unemployment report. But the other element in revenue is how much you charge for your services. So the million dollar question is: how do I continually acquire and retain clients, at pricing that’s attractive for both sides?
Building Your Business
As a soloist, each and every one of you has a unique differentiator, something that makes you a fit for your clients. Whether it is a specific skill set, relevant industry experience, or simply, a compatible personality trait; this differentiator is your “Golden Ticket.” If you have not identified your differentiator and crafted an elevator pitch around it, now is the time to do so.
Identifying your differentiator, also referred to as your value proposition, is extremely important and leads me to the second greatest issue soloists face, pricing. If you cannot articulate what you are selling, you are not going to get very much for it! It is like the old adage we have all heard ad nauseam, “You can’t hit a target you cannot see…”
For many soloist, that target is a compensation target. Your business and weekly/monthly efforts may be based around an income goal. Acquiring and retaining clients may not be your issue; in fact, you may have too many clients, or even the wrong type of clients. But if you are still not reaching your income goals, where are you going wrong? If this is your situation, your pricing may be off-target.
What — A Pricing Error?
Pricing errors are incredibly common for independent consultants and coaches, and come in two forms:
Type 1: Pricing higher than the customer is willing to pay
Type 2: Pricing lower than the customer is willing to pay
Everybody is aware of the first type! No one wants to lose an assignment that would be profitable just because of pricing too high.
But making a Type 2 pricing error is much more difficult to identify. You are worth more than you are charging, you are working too hard for too little money and you are potentially creating credibility problems with prospective customers. Don’t let the ‘fear of famine’ prevent you from earning a premium for your services and achieving a greater level of satisfaction from your solo business.
Rainwerks now offers a five-week program called Pricing to Prosper.
To learn more about avoiding Type 1 and Type 2 pricing errors and other common business challenges, visit Rainwerks at www.rainwerks.com.