The customer who taught me to charge properly

What I thought I was doing

When I started, I priced by looking at what everyone else charged and going slightly lower. It felt like strategy. It was not. It was fear dressed up as positioning.

The logic seemed sound. I was new, I had no reputation, and the only thing I could offer that established people could not was a smaller number. So I offered the smaller number, and customers came, and I told myself it was working.

What was actually happening

Three things, none of which I could see at the time.

The first was that I was working more hours for less money, which meant I had less time to get better at the work itself. Every hour spent on an underpriced job was an hour not spent learning, not spent finding better customers, not spent building anything that would still be there next year.

The second was that cheap attracted a particular kind of customer. Not bad people, but people for whom price was the only thing that mattered. They negotiated hard, changed their minds often, and left the moment someone cheaper appeared. I had selected for exactly the customers least likely to stay.

The third was the one that took longest to understand. By charging too little, I was telling customers the work was worth too little. They believed me. Then they treated it accordingly.

The conversation

A customer I had quoted very low came back three weeks later and asked me to redo most of the work. Not because it was wrong, but because he had changed his mind about what he wanted.

I said yes, because I was afraid of losing him. Then I said it again the next time. By the fourth round I had spent more hours on that one job than on the previous three combined, and I was making less than I would have made doing nothing.

I finally told him what the additional work would cost. He was not angry. He was surprised. He said, and I remember this exactly, that he had assumed the changes were free because the whole thing had been so cheap to begin with.

He was not exploiting me. He was responding to the price I had set.

What I changed

I stopped quoting against other people and started quoting against the work. What does this actually take. What is it worth to the person receiving it. What do I need to earn for this to be a business rather than a hobby with paperwork.

The first few times I quoted the new number, I expected to lose the job. Sometimes I did. But the people who said yes were different people. They asked better questions, they made decisions faster, and they treated the work as something they had invested in rather than something they had picked up cheaply.

My income went up. My hours went down. The work got better, because I finally had time to make it better.

What I would tell someone starting now

Your price is not a number. It is a statement about what you believe the work is worth, and everyone you quote it to will hear that statement clearly, whether or not you meant to make it.

Charging too little does not make you generous. It makes you unsustainable, and an unsustainable business cannot serve anyone for very long, including the customers you undercharged to win.

Start higher than feels comfortable. You will still be too cheap.