I was scared. Petrified. Every muscle was tense. Every nerve raw. The self-doubt and insecurity I felt were all-consuming.
I had to tell someone how much my services cost.
Quoting a job isn't easy. And, so far, it's my least favourite part of running my own business.
Because I sell my services as a gift-wrapping consultant, determining my prices isn't as simple as figuring out my costs and doubling that total. I am billing for my time, my brainpower and my experience—all intangibles that make pricing them seem very arbitrary. What is my time—what am I—really worth?
To figure it out, I did some research, asked a lot of questions, crunched some numbers and thought—a lot.
I read several articles about how to price services, but they weren't entirely helpful. Other than the tip that many new business owners undercharge (good to know), most advised to check the market and see what competitors were charging—a good indication of the value of a service and what the market will bear. This is a tough feat for someone like myself, who, as far as I know, is the only gift-wrapping consultant in Toronto, and possibly Canada.
So I had to look beyond my "industry." A lot of what I do is specialized styling: I wrap gifts for magazine stories, advertisements, and event and merchandising displays. For that work, I could set my rate based on standard styling fees. An email to a few magazine editors and stylists I know helped me figure out what these fees were, sort of—because it changes depending on what the job is. I also spoke to someone who had done similar work as a food and lifestyle consultant.
I figured out my rates, added a little (remembering the tip about entrepreneurs not charging enough), and then showed my numbers to a friend who has many years of experience running various businesses. His response: your numbers are too low.
I was apprehensive about raising them: I feared turning away a potential client because the cost was too high. But the prospect thought the rates were reasonable—and the company is now a client. Phew.
I still have more research to do: there are other services that I offer, such as training and demonstrations, on which I need to firm up my rates. I'll use my styling rates as a reference point, as well as look into what other companies charge for similar services, even if they are teaching something else. But I think I'm on the right track. And as my business grows, I'll likely finesse my numbers a little as I get to know my clients better and what their needs are.
Corinna vanGerwen is a creative gift-wrapping consultant, sole owner and only employee of her eponymous home-based startup, which provides gift-wrapping services, training and workshops, as well as packaging services for marketing and events. She blogs at Corinna Wraps.
More columns by Corinna vanGerwen