I Seriously Undercharged for a Service

I wouldn’t be surprised if I learned that most new consultants undercharge for their services at some point.

Whether it’s because they don’t know (yet) the value of their services or they don’t have the courage (yet) to ask for what they deserve, many of us do it.

The first time I severely undercharged for services was when my business was less than a year old.

I was contacted by an overseas company who was interested in learning about the U.S. federal grants system. They received funding from one of the largest international organizations for other overseas projects, but the U.S. federal grants infrastructure was something they needed to understand to know if they could apply for funding as a primary recipient or subrecipient.

That’s my specialty so I prepared a proposal with prices that, if I admit it, I knew they were too low but I was so geeked for a new client (and an overseas one at that), that I happily emailed the proposal with the low prices.

It wasn’t until I was working on the deliverable that I really realized just how much I’d undervalued my service.

Here I was researching all the angles and preparing a top-notch report that included not only what they’d asked for but included details they could use to form partnerships with US-based organizations and universities, overseas organizations in about eight countries, and even included a “what’s next” for the specific funding areas they were considering.

Not only did that report include all kinds of breadcrumbs for them to pursue and build profitable partnerships, I added a post-report, 1:1 consultation to discuss my findings.

So, what did I charge?

Do you want to know what I charged for approximately 5-6 hours of research, 2-3 hours of writing an eight-page consulting report, a 1:1 consultation, and all the other time devoted to proofing the report, and office supplies to print multiple drafts?

I charged $549.

I'm embarrassed to write that.

You know what I could have charged?

I could have charged $7,500 - $15,000 or more.

Why?

Because of the amazing value that eight-page report delivered to the client.

Lessons learned

When I created that proposal, I included add-on services I was fairly certain the client would want to hire my company to provide. But they did not because they could use that report to build partnerships with the 20+ organizations in that consulting report.

So, here’s what I learned:

1. Never underestimate the amount of time it takes to complete a deliverable. In fact, multiply the estimated time by 2 for a closer estimate.
2. Always charge based on the value provided to the client.
3. Never want a client more than you want to be properly remunerated for your service.

That was also the first lesson in how valuable my time was to my business. As a consultant, I now place a high premium on my time.

So, have you ever undercharged for a service? 

Think back on those times and what drove you to do it.

More importantly, have you stopped undercharging for your services? If you have, congratulate yourself for overcoming whatever caused you to do it.

Now, here’s my challenge for you….

Take a look at all of your fees. Are there any that could be increased based on the value, solutions or excellent return on investment you provide?

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