Knowing your worth is important to any business – and that shouldn’t be any different for agencies.
The truth is, you might have undervalued your business, selling yourself short as a result.
We’ve seen a lot of agencies do this and they just end up feeling pressured to offer a deal that doesn’t reflect the true value of their business.
That’s why working out your exact value when costing up work can be tricky, but we’ve put some top tips together on how to do just that.
Never sell yourself short again.
Your time is valuable
A lot of agencies start small, perhaps even as a one man band, in which case charging hourly often makes sense.
If you’re a larger agency, you probably charge per project, having arrived at that price by including things such as competition and client research.
But to make sure you’re not selling yourself short, you need to make sure your prices reflect the time you spend on a project.
It’s easy to make a lot of assumptions about that, including that your time is already well spent and your processes are as efficient as possible.
If you think that’s the case, why not test the theory?
You should record how long it takes you and your team to do various functions using time tracking tools so you can see if your processes are as efficient as you think they are.
Then, you’ll be able to make a lot of observations about your business.
You might, for instance, spot a cheap service that takes a long time to do, in which case you can evaluate the way the service works or if the responsible employee is getting on okay. Alternatively, you might discover that you’re undervaluing your time, and up the price.
What value are you adding?
It’s also important to think about the value your firm is adding to a client.
For example, would it make sense for a marketing agency that increased another business’s revenue by £10,000 with just two hours’ work to charge based purely on the time and resources it spent? We would say “no”.
Remember: you’re an expert in your field and that expertise is the commodity you are selling.
If you ever struggle justifying this to clients who can’t get over paying for expertise rather than a project, concentrate on reminding them of the outcomes they are likely to get from your work. After all, that is what they are buying – not the hours and time it takes to complete the project.
Track your expenses
Using technology and advanced software often means that a project delivers more value than might have been possible without it, so make sure to reflect that with your price, too.
For instance, accountants acknowledge their use of cloud accounting in their pricing because it allows them to make better and more specific advice that will help a business increase its value.
Again, your value and the prices you charge shouldn’t be based on a gut feeling, but carefully considered calculations.
We would be lying if we said those calculations are easy, but that’s where we come in.
We’ll crunch the numbers so you can understand your profitability and what you should charge to be as profitable as possible.
Don’t hesitate to reach out to us to discuss your prices.