In my most recent pricing survey of resume writers, 100% of respondents said YES, they have struggled with pricing their career services.
Eighty-five percent said they would like to learn more about pricing their services.
Accurate (and adequate) pricing is one of the biggest predictors of success in your resume writing business.
Why Resume Writers Don’t Stay In Business
I recently read an article about the top 11 reasons small businesses fail.
Number three was: Failure to price your product or service correctly.
Number one was inadequate cash reserves, and number four was the failure to adequately anticipate cash flow. Both of those also relate to pricing, in a way. The author went on to say, “You can be the cheapest, or you can be the best, but if you try to do both, you’ll fail.”
Pricing is one of the biggest challenges in succeeding as a freelance resume writer. Charge too much, and you may have trouble attracting clients.
Charge too little, and you’ll have a hard time succeeding. At a minimum, you’ll work harder than you need to, or you won’t be able to give clients enough of your time or energy to truly help them. The worst case scenario is that you can’t afford to stay in business if you don’t charge enough. So pricing is a critical component for your success.
Let me start by saying that pricing your services is a very individual, personal decision.
Before you set your pricing, think about two things: 1) Who are you serving? Who is your target client? 2) What problem are you solving for them? What benefit or benefits do they get from working with you?
No matter what you end up charging, if you are crystal clear about who you serve and what you can do for them, it will help you attract great clients, and it makes your pricing less of a factor in choosing you.
Once you know who you want to target, you can start figuring out your pricing.
Let’s talk about pricing models for services.
• The first is a straight hourly rate, based on the time the project requires (clients don’t like this model because of the uncertainty for them, so it can be harder to get them to commit. If they don’t know up front if their resume project will be $500 or $5000, they’re not likely to work with oyu.)
• Flat fee, based on the number of hours it’s estimated the project will take. Clients like this because they know what they’ll pay, but the risk is that you have to estimate the time required accurately. You can either provide set “packages” for your services, or quote projects individually, once you’ve determined what your client needs.
• Value-based. This is not a common pricing strategy for resume writers, but it ties your pricing to the outcome the client will get. For example, if your client gets the job, you get a percentage of their first-year salary. (This is more common for recruiters.)
But how do you come up with the hourly rate, or the rate that you’re basing your flat fee packages on? That’s where the formula for pricing your services comes in. Danielle has a worksheet in your Google Drive that you can use to calculate this.
A Formula for Pricing Your Services
The formula for pricing your services consists of three steps.
The first is to estimate your expenses and income. Remember, as a resume writer, you’ll now have some expenses that you didn’t as an employee — marketing costs, supplies, equipment, and extra taxes.
(In my course for resume writers, Pricing Right: Price Your Career Services with Confidence, there is a worksheet with expenses to consider.)
Add those up. Then, determine what you want to be making. Those two numbers, added together, are your income target. For example, let’s say you want to make $80,000 and your annual expenses are $15,000. Your income target would be $95,000.
Step two is to determine your billable hours and schedule. Even if you’re not billing by the hour, you still need to figure out how many hours a week you’re available to work each week — and use that to determine your billable hours.
You’ll have billable hours and non billable hours each week.
Billable hours are the hours you’re working on client projects; non billable hours is the time you spend on marketing, client acquisition, and all the fun paperwork that comes with being a freelancer. Let’s say you think you can generate 20 hours of billable time each week. And let’s say you want to include two weeks of vacation each year. For example, if you multiply 20 hours by 50 weeks, you get 1,000 billable hours each year.
The third step is to use the income target and your total annual billable hours to calculate your hourly rate. Divide your income target (step one) by the total number of billable hours per year (step two). For example, $95,000 divided by 1,000 billable hours gives you an hourly rate of $95/hour.
Adjusting Your Rates
But you don’t have to stick exactly to the $95/hour rate. You want to consider some other factors that can influence your pricing.
• the type of clients you work with and the results you’re able to get for them
• what you were used to making
• your experience/certifications
• level of personalization
• what other resume writers are charging
Once you figure out your pricing, you have to figure out how you’re going to communicate it. Are you going to list your pricing on your website? Will you only discuss pricing on the phone or once you’ve met with a prospective client?
Also, consider HOW you’re going to get paid. Deposit up front? Payment in full to start? A common tactic in consulting is progress payments — a deposit and then payment at agreed-upon intervals.
Most resume writers get paid 100% up front because of the custom nature of work. But if you’re hesitant about that to begin with, at least collect a deposit (25% or 50%) up front and the balance when you deliver the draft (or before you deliver the draft).
Want more insight into pricing your resume services? Check out “Pricing Right: Price Your Career Services With Confidence.”