Being a successful entrepreneur means knowing--and charging--your worth...but is it ever OK to accept being paid less?
As a small business consultant and business coach for entrepreneurs, I normally recommend insisting on getting paid full value. I encourage entrepreneurs and small business owners to know what their expertise and services are really worth. So why would I suggest that there might be times it’s OK to charge less?
Plain and simple…..because it happens.
In the process of writing my second book specifically for self employed business owners, I came to realize something. More than ever before, it became clear to me that what self employed people need is realistic information and advice. We need advice that corresponds to the actual lived experience of the self employed life. Because when advice is unrealistic, it creates yet another way that being self employed feels different from other ways of doing business. And it sets us up to think we’re falling short, or there’s something wrong with us.
Keeping it real
We’ve all heard the advice and seen the memes. “Life begins outside your comfort zone.” “Go big or go home.” “Never settle for less.” This is not necessarily bad advice; the problem comes in when we apply it universally to our self-employed experience. Because let’s face it, there are simply times when we need the business. Times when we feel pressure. Times when we have bills to pay. Times when some money is better than no money. Times when someone wanting our product or services can go a long way to making us feel better, price notwithstanding.
Perhaps now is one of those times for you with the pandemic and subsequent shut down and restrictions on business. But crises and challenges and shifts have happened before, and they will happen again. This is the realistic life of the self employed, and if we accept it we can find a way to deal with it.
The line of shame
So how do we manage those times when we want the business but know we’re not getting paid our worth?
I call it the line of shame.
The biggest cost of not getting paid your full worth is what it does to you on the inside. When business owners tell me they’re being underpaid by a client, I can see the shame on their faces. I can see their embarrassment, as if they think they’re the only one who has to settle for less. I see their disappointment in themselves because they feel they should be doing better.
And that’s why I call it the line of shame. Every self employed person has one. It’s the amount of money beneath your full price that, once crossed, makes you feel ashamed to accept it.
The key is to know what that number is, and never accept work for less than that amount. Any work below your line of shame is never worth it. Ever. Because the cost to you is far greater than any money you’ll gain in the sale.
The range of acceptance
Ideally, you would always be in a situation where you could charge your full worth. Realistically, there will be times when that isn’t how it plays out. In those situations, you’ll know what your line of shame is and not accept work that falls below it.
Between your full price and your line of shame, though, there’s room for negotiation. There’s a range that, if you’re really honest with yourself, you will accept. Maybe not happily, but you will accept it.
In my photography business I used to call this my walk-away money. It was an amount of money that was less than my full value, but not as low as my line of shame. Anything less than that was a no for me. Not only was it not worth my time, but I knew I’d be ashamed of myself for accepting so much less than my full value. But within this range I gave myself the freedom to either walk away or accept the work without shame.
And that’s the range of acceptance. A space you determine as still valuing your worth, even if not at the most ideal rate. A buffer between the unrealistic expectation of always getting your full value and the unwarrented self-recrimination that comes when you don’t. A safety zone between your ideal and your line in the sand.
Sweetening the range of acceptance
Your range of acceptance may be monetarily less than your full worth, but there are other ways to increase value. For the sake of example, we’ll set aside for now the discussion of the pros and cons of being paid by the hour. Let’s say you know your full value is $100/hour. So $100 is ideal, but you will accept between $70 and $100/hour. If you are offered a project at $80/hour, you can increase the value you receive by looking for other ways to be compensated.
As a speaker, I don’t always get my full speaking fee. But as long as we’re in the acceptable range, I’ll propose other compensating factors. Maybe the organization will furnish me with high quality video. Maybe they’ll buy books or allow me to sell them outside the room. Or maybe the audience is full of ideal clients or sources of referrals to other speaking gigs.
Depending on your business, there could be many opportunities for non-monetary compensation. Be sure to be realistic and look for compensating factors that are doable and have true value for you. The right “extras” can actually make up the difference between what you’re getting paid and your full value.
It’s a good idea to know in advance what has value to you beyond monetary compensation. My speaking rep does most of my negotiating, but she’s armed me with a list of compensating items if needed. I encourage entrepreneurs and business owners to have their list prepped and written down in advance, ready to negotiate.
When you put this process together, here’s what it looks like:
First, know your full value. Really own it. This process backfires if you build it on a compromise. If you’re currently charging less than you know you’re worth, it’s time to own your full value. And if you have several products or services, do this for each of those services.
Second, figure out what your acceptable range is. The lowest limit of your acceptable range is your line of shame. Don’t cross it. It’s never worth it. Not only will you feel shame, but you probably won’t be your best self in the relationship with the client.
If the offer falls within your acceptable range, see if you can sweeten it with another compensating factor. And if that doesn’t pan out, as long as it’s within your range of acceptance, you are empowered to say yes.
And that’s the key. Empowered.
When the decision to accept or reject getting paid less than your full value is within your power, you can feel good about it. Even if it means getting paid less than you’re worth.
Establishing your worth, acceptable range, and line of shame now takes emotion out of the equation later. When the time comes and you’re tested, you can stay grounded and not be caught up in the moment. All too often it’s when you most need work that you’re challenged to accept something below your line of shame. It’s a test to see how much you really respect yourself. Don’t fall for it. You’re worth more.
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