What you're actually worth — and how to charge it
I want to start with a number.
Not a big, aspirational number. A small, uncomfortable one.
The difference between what most experienced consultants charge when they start out — and what they charge eighteen months later, once they've seen enough clients say yes without hesitation — is usually somewhere between 40 and 70 percent.
Same person. Same knowledge. Same quality of work.
Just a different understanding of what it's actually worth.
That gap — between what you charge now and what you could be charging — is what this issue is about.
THIS WEEK AT A GLANCE
★ The Feature — Why experienced professionals consistently underprice themselves, what that costs over time, and the practical thinking behind charging what you're worth
⚡ Quick Win — A simple pricing sense-check you can run in 15 minutes
💡 Opportunity Spotlight — The rate conversation: how to handle it without flinching
❝ Reader Story — How raising her rate by 60 percent actually brought Judith better clients, not fewer
★ THE FEATURE
Why clients pay more for experience — and how to charge what you're worth
Here's the most common pricing mistake I see among people building their first consulting practice.
They price their time.
Not their outcome. Not their expertise. Not the value of the problem they're solving. Their time — as if they were still an employee billing hours rather than a professional selling judgment.
It's an understandable instinct. Most of us have spent decades in a world where compensation was calculated by the hour or the year. Salary divided by hours worked equals your hourly rate. That's the mental model most people carry into consulting.
It's the wrong model.
Here's why.
When a small business owner hires you to fix a supply chain problem that's been costing them $15,000 a month in delays and lost orders, they're not paying for your hours. They're paying for the outcome. The $15,000 monthly loss that stops. The supplier relationship that stabilises. The operational headache that goes away.
If you solve that problem in three hours because you've seen it twelve times before and know exactly what to do — that efficiency is your advantage, not a reason to charge less.
In fact, the faster you can solve it, the more valuable you are. Because what you're offering isn't labour. It's compressed experience. Decades of pattern recognition applied to their specific situation.
That's worth considerably more than an hourly rate multiplied by however long it takes.
Let me make this concrete.
Two consultants are both hired to fix the same operational problem for the same client.
Consultant A has two years of experience. It takes them three weeks to diagnose and solve it. They charge $150 an hour and bill 60 hours. Invoice: $9,000.
Consultant B has 25 years of experience. They solve it in a week. They charge $350 an hour and bill 20 hours. Invoice: $7,000.
Consultant B is more experienced, faster, and cheaper. And they probably feel like they've undercharged.
That's the paradox of expertise pricing. The better you are, the more value you create in less time — and the more your instinct will tell you you haven't done enough to justify the fee. That instinct is wrong. The client doesn't experience your expertise as "she only spent twenty hours on this." They experience it as "this was solved in a week when we'd been struggling with it for six months."
Price the outcome. Not the hours.
Now let's talk about the other reason people underprice — the one that's harder to fix because it lives in your head rather than your spreadsheet.
Most people who've spent their careers as employees have never had to put a number on what they know. Their employer did that for them, usually conservatively, usually without explaining the reasoning, and usually in a context where asking for significantly more felt risky.
That experience — decades of being told what you're worth rather than deciding it — leaves a mark. It creates an instinct to be modest. To undercut. To price low enough that no one can say the fee is unjustified.
Here's the problem with that instinct: it communicates the opposite of what you intend.
High fees signal confidence and scarcity. They tell a potential client: this person knows what they're doing and other people are paying for it. Low fees signal uncertainty. They raise the question the client will never ask out loud: if this person's expertise is so valuable, why are they so cheap?
I've spoken to dozens of people who've raised their rates significantly and reported the same counterintuitive experience: better clients, fewer difficult conversations, and no meaningful reduction in the number of people who say yes.
Because the clients who balk at a proper fee are almost never the clients you want. The ones who hire based on price rather than fit tend to be the most demanding, the least trusting, and the most time-consuming. Pricing yourself correctly is, among other things, a filter.
So what's the right number?
There's no universal answer, but here's a practical framework.
Start with what the problem costs the client if it isn't solved. A month of delayed orders, a bad hire, a compliance failure, a broken process — what does that cost them in real terms? Your fee should represent a fraction of that cost. Ten to twenty percent is a common rule of thumb in consulting circles.
Then research what others in your field charge. Not to copy them exactly, but to understand the range. LinkedIn, professional associations, and a few direct conversations with people who do similar work will give you a market picture quickly.
Then pick a number toward the middle to upper end of that range — not the bottom — and hold it with confidence when the conversation comes.
Confidence in a price is not arrogance. It's evidence that you believe in what you're offering. And clients, whether they articulate it or not, are looking for that belief before they hand over the fee.
⚡ QUICK WIN
A pricing sense-check in 15 minutes
If you're not sure whether you're priced correctly, this exercise tends to clarify things quickly.
- Write down what you currently charge — or what you're planning to charge if you're just starting out.
- Think about the last time you quoted a fee and the client agreed immediately, without any hesitation. If that happens consistently, you're probably undercharging. A little friction in a fee conversation is normal and healthy.
- Research two or three people with similar backgrounds doing similar work. LinkedIn, professional association directories, and a quick Google search will usually surface some data points. Write down the range you find.
- Calculate what the problem you solve typically costs a client per month if left unaddressed. Write that number down.
- Look at what you're charging relative to that cost. If your fee is more than 25 to 30 percent of the monthly cost of the problem, you may be high. If it's less than 10 percent, you're almost certainly undercharging.
Most people who do this exercise find themselves on the low end. Not slightly low. Meaningfully low.
That's fixable. And it's worth fixing.
💡 OPPORTUNITY SPOTLIGHT
The rate conversation — and how to handle it without flinching
The moment most people dread in a consulting conversation is when the potential client asks: "So what do you charge?"
Here's the thing about that moment. The way you answer it communicates almost as much as the number itself.
Hesitating, qualifying, apologising, or immediately offering a discount before they've responded — all of these signal the same thing: you're not sure the number is justified. And if you're not sure, they're not sure.
The mechanics of answering well are simpler than most people expect.
State the number clearly. Add one sentence of context if it helps — something that connects the fee to the outcome rather than the hours. Then stop talking.
"My retainer for this kind of engagement is $1,800 a month. That covers eight hours of my time, and most clients in this situation see the impact on their [specific problem] within the first four to six weeks."
Then silence. Let them respond.
Most of the time, the response is either yes, or a question about scope. Rarely is it immediate resistance — and when it is, it's often a client who wasn't the right fit anyway.
The rate conversation gets easier with repetition. The first time is the hardest. By the fifth time, it feels almost routine.
What never gets easier — what continues to cost people money year after year — is avoiding the conversation by pricing too low in the first place.
❝ READER STORY
Judith, 53, spent 21 years in corporate communications — the last decade as a communications director for a large healthcare organisation. When she left to start consulting, she priced herself at $95 an hour.
She had three reasons, she told me. She wasn't sure anyone would pay more. She didn't want to seem presumptuous. And she'd seen a few other communications consultants at that rate and figured it was the market.
Within four months she had clients. The work was going well. And she was quietly exhausted.
"I was working constantly," she said. "To hit the income I wanted I needed to bill so many hours that I barely had time to do the work well, let alone think about growing."
A conversation with a mentor — a former colleague who'd been consulting for years — was blunt in a way Judith found uncomfortable and immediately useful.
"She looked at my rate and said: you're not a junior freelancer, you're a former communications director of a major healthcare system. Your rate should reflect that."
Judith raised her rate to $175 an hour for new clients. She was convinced she'd lose half her pipeline.
She didn't lose any of it.
What she lost was the clients who'd been paying $95 an hour and treating her accordingly — requesting endless revisions, questioning her recommendations, slow-paying invoices. The clients who came on at $175 an hour were, almost without exception, more decisive, more trusting, and easier to work with.
"I think I understood intellectually that price signals quality," she said. "I didn't believe it applied to me until I saw it happen."
She has since moved to a retainer model — three clients at $2,200 a month each. She works fewer hours than she did at $95 an hour and earns considerably more.
"The number I was too afraid to say out loud turned out to be the one that changed everything," she said.
She paused, then added the line I've thought about most since we spoke.
"I spent a year charging what I thought people would accept. I should have been charging what the work was worth. Those are very different numbers."
CLOSING SIGN-OFF
Pricing is one of those things that feels like a practical question but is really a confidence question dressed up in numbers.
The practical side is straightforward — research the market, understand the value you create, pick a number toward the upper end of what's defensible. The confidence side takes a little longer. But it comes, and it comes fastest when you say the number out loud and watch someone say yes.
Next issue, we're talking lifestyle — specifically what the working retirement most people in this community are building actually looks like day to day, and why it looks considerably different from what most of us grew up thinking retirement was supposed to be.
Go Here If You Need To Read More:
Until then,
Richard
