Creative Business should Stop Charging By the Hour and Make More Money

One of the biggest challenges with a creative business is getting paid what you are worth. The root of the problem isn't that the client doesn't have the money and it isn't that the client isn't willing to pay you what you are worth. The root of the problem is how you are charging and how you are creating value in the mind of the client.

First, you must create a business based on value pricing and not hourly pricing. The number one worst way to charge (and most creative businesses are charging this way) is by the hour.

Frankly, it shouldn't matter how long it takes you to solve the client's problems or provide your service, it should matter that the client is getting what he needs and what he wants. If you're creating value and you're giving them value, they'll pay you for that value. They shouldn't be paying you for your time. If you're being paid for your time you're essentially setting the ceiling to how much money you can make because you can only work so many hours.

Therefore, you must determine, specifically what your value is to the customer, not how many hours you will work for that customer.

To do this, ask yourself the following questions:

How do you impact that customer or potential client?

What do you provide to them that will help them and helps solve their problems? How will solving these problems impact the customer? Is it a problem with high impact or low impact?

What is important to the customer? Why is it important to the customer? How important is it?

Have they had experiences working with someone in your type of business before? If so, was it a good or back experience? Why? Exactly what happened?

Why is the client coming to you for this issue?

What is the client's definition of success with this project? Ask him to describe specific ways he will know he made the right choice in hiring you.

By getting the answers to these questions - not guessing what the client will say, but actually getting the client to answer these questions - you will have the information you need to create VALUE in the mind of the client. If they perceive your work to be valuable, they will be thrilled to pay you. If they do not perceive your work to be of value, they won't pay you no matter how low you go on the pricing scale.

It's all in the mind of the client. Get in their head and understand specifically what they want and, even more specifically, why they want it. Once you do that, getting paid what you are worth is a piece of cake!

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About Kirstin Carey

Kirstin Carey is the author of "Starving Artist No More: Hearty Business Strategies for Creative Folks." Kirstin knows how much most creative people hate sales, contracts, and discussing money and she consults creative people on the business side of creativity so they make more money, get better clients, and still love what they do. She put together a resource full of proven strategies and insider secrets guaranteed to help creative types get the business help they need so they don't have to starve anymore! Go to www.MyCreativeBiz.com.


And here is another random article you might be interested in...

Like It Or Not, You Have A Score To Settle (Part 1)

Just when most people finish with school and can stop worrying about test scores, there's a new kind of scoring that enters the picture. It's called credit scoring. And, its impact on your financial future can mean more to you than a college degree.

You may never know your precise credit score, but you need to know if you're at risk!

Credit Scoring ... Why It's So Important:

Ever wonder how a creditor decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you'd be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans.

Precisely what is credit scoring?

Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and age of your accounts is collected from credit applications and your credit report.

Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. Total number of points (credit score) helps predict how creditworthy you are; how likely it is that you will repay a loan and make payments when due.

You may never know your precise credit score, but you need to know if you're at risk!

Why is credit scoring used?

Credit scoring is based on real data and statistics, so it usually is more reliable than subjective or judgmental methods. It treats all applications objectively. Judgmental methods typically rely on criteria that are not systematically tested and can vary when applied by different individuals.

To develop a model, a creditor selects a random sample of its customers (or a sample of similar customers if their sample is not large enough), and analyzes it statistically to identify characteristics that relate to creditworthiness. Then, each of these factors is assigned a weight based on how strong a predictor it is of who would be a good credit risk.

Each creditor may use its own credit scoring model, different scoring models for different types of credit, or a generic model developed by a credit scoring company.

How reliable is the credit scoring system?

Credit scoring systems enable creditors to evaluate millions of applicants consistently and impartially on many different characteristics. But to be statistically valid, credit scoring systems must be based on a big enough sample. Remember that these systems generally very from creditor to creditor.

Although you may think such a system is arbitrary or impersonal, it can help make decisions faster, more accurately, and more impartially than individuals when it is properly designed.

In fact, many creditors design their systems so that, in marginal cases, applicants whose scores are not high enough to pass easily, or are low enough to fail absolutely are referred to a credit manager who decides whether the company or lender will extend credit. This may allow for discussion and negotiation between the credit manager and the consumer.

What happens if you are denied credit or don't get the terms you want?

For the answer to that crucial question and how to improve your credit score, be sure to read Part II of "Like It Or Not, You Have A Score To Settle."

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About CreditandYou.com

Credit and You are a group of expert on credit and the authors of "CREDIT AND YOU ... Secrets To Improving Your Credit Rating." Feel free to pass this article along to family and friends. And be sure to pick up your FREE 7 day course on "Credit Basics" at http://www.creditandyou.com
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