"Charge What You're Worth": Is It Actually Good Advice?
"Charge what you're worth" is said with real kindness, usually to a woman who is undercharging. As encouragement it is lovely. As a pricing method it is a trap, because it makes your price a measure of your self-esteem.
On a confident day the number goes up. On a doubtful one it comes down. And the question it asks, what are you worth, has no answer in dollars, because a person is not priced.
So here is what the phrase gets right, where it sends people wrong, and a way to set a price that holds on the days you do not feel like much.
A price that comes from numbers does not change with your mood. Example data.
The short version
The phrase is right that many women charge too little.
It is wrong to tie the price to your worth as a person.
A price should cover the work, the business and your life, with something left over.
Three numbers and one sum give you a floor you can defend.
What it gets right
Undercharging is common. Especially where the first price was set years ago and never revisited.
Confidence does matter. You have to be able to say the number out loud.
Low prices are often about fear, not arithmetic. Naming that is useful.
Where it goes wrong
It turns a business decision into a personal one. A client who says no to your price has not said no to you.
It gives you nothing to calculate. How would you know when you had reached your worth?
It moves with your mood. A price should be the steadiest thing in your business.
It makes a "no" hurt more. If the price is your worth, a refusal is a judgment.
The fourth one does the damage. Owners who price from self-worth often avoid raising prices at all, because every possible objection feels like being told they are not enough.
A sturdier question
Replace "what am I worth?" with "what does this work have to bring in for my business and my life to hold together?" That one has an answer.
Number | What it is | Example |
|---|---|---|
What you need to keep | Your own pay for the year, after tax | $54,000 |
What the business costs | Everything it takes to run | $18,000 |
Hours you can really bill | Client hours in a year, not hours worked | 900 |
The sum
Line | Amount |
|---|---|
Take-home you need | $54,000 |
Before tax, at a 25% set-aside | $72,000 |
Plus what the business costs | $90,000 |
Divided by billable hours | 900 |
Your floor | $100 an hour |
One hundred dollars an hour is the lowest figure at which this business supports her. Nothing about it depends on how she feels on a Tuesday. If someone objects, the answer is not "but I am worth it". It is "this is what the work takes".
The 25% is an example, and our post on pricing a service when your time is the product works through each step.
Floor, market, ceiling
The sum gives you a floor. Two other things shape where you land above it.
What it tells you | Where it comes from | |
|---|---|---|
Floor | The least you can charge and stay in business | Your own numbers |
Market | What clients are used to paying for this | What others near you charge |
Ceiling | What the result is worth to the client | What your work changes for them |
If the market sits below your floor, that is important to know. It means the answer is a different offer, a different client or lower costs, and not a quiet decision to work at a loss.
Notice that the client's side of this is about the value of the result to them. That is the sound idea hiding inside "charge what you're worth". It is the work that has a worth to the buyer. You do not.
The three numbers behind a floor all come from here. Example data.
What to say to yourself
In place of | Try |
|---|---|
"Am I worth this?" | "Does this price cover the work?" |
"Who am I to charge that?" | "This is what it costs to do this properly." |
"What if they say no?" | "Then this offer is not the right fit for them." |
"I should charge more" | "My floor is $100. I am at $85." |
The right-hand column is duller. That is the point. Dull sentences are easy to say to a client.
So, is it good advice?
As a nudge to look at your prices, yes. Many women need exactly that nudge, and the kindness behind it is real.
As a way to choose the number, no. Your worth is not for sale and does not change when a client hesitates. Let the price come from the work and the numbers, and keep your sense of yourself well away from the invoice.
Find your floor, free
La Soglia, the free membership of the Money Mastery System, holds everything you own and everything you owe in one place, personal and business together, with no bank connection and no card. Knowing what your life costs is the first of the three numbers, and this is where it becomes clear.
Bring it to the Collective
What is your floor, and are you above or below it today? The Money Mastery Collective has a discussion feed open on the free membership. It is an easier thing to say among women who are working it out too.
Questions we hear
What does "charge what you are worth" mean?
It is advice to raise prices that are too low. It is meant kindly, and it links price to self-worth, which makes pricing personal.
How should I set my prices instead?
Work out what you need to keep, add tax and what the business costs, and divide by the hours you can really bill. That is your floor.
Why is pricing so emotional?
Because it is easy to hear a "no" to a price as a "no" to yourself. Pricing from numbers separates the two.
What if the market will not pay my floor?
Then the offer, the client or the costs need to change. Working below your floor is working at a loss.
References
There are no outside figures in this post. Every number is our own worked example.
Start free with La Soglia
La Soglia is the free membership of the Money Mastery System. It gives you the Net Worth Tracker, where everything you own and everything you owe sits in one place, and the Money Mastery Collective. There is no card to enter and no bank connection.
Keep in touch
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A note on what this is
This article is educational. The Money Mastery System is an educational tool, not financial software, and nothing here is legal, tax, investment or financial advice. The figures are illustrations, and your own costs, hours and tax position will differ. For guidance on your own circumstances, please speak with a qualified professional who knows them.
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