Are You Charging Enough? How to Overcome a Scarcity Mindset

As a freelancer or founder, you’ve likely asked yourself: "Am I charging enough?" For many, the answer is a resounding "no." The truth is, nine out of ten freelancers and founders I talk to are undercharging for their services, sometimes by thousands each month.

This isn’t just about undervaluing your work right now. It's a mindset that could be holding you back from achieving your financial goals over the long term.

Understanding the Scarcity Mindset

The scarcity mindset is a common issue among freelancers and founders. It’s the belief that there’s a limited pool of clients, and if you charge too much, you’ll lose out on opportunities. This mindset shows up in thoughts like:

• "If I charge too much, I won’t get the client."

• "They’ll say no to my pitch."

• "I NEED this client."

  
  

This fear-driven thinking keeps you from charging what you’re truly worth. And you end up stressed and burnt out.

The Reality: More Clients Than You Can Serve

The reality is there are far more potential clients out there than you could ever hope to serve. Recognising this fact is the first step toward adjusting your pricing strategy. For every "no" you hear, there are limitless potential "yes's" out there (that's a word, right?). By changing your thinking, you can start to get comfortable charging what you're worth.

The chances are that the market you target is growing every year, and that you probably only need 5-10 GOOD clients to make your business a success. And if you're not sure, check out this post: Have I chosen the wrong niche?

Additional Insight: The Power of Pricing Psychology

Research in pricing psychology tells us that clients often associate higher prices with higher value. This is especially true in service industries like freelancing and coaching. This idea, known as "perceived value pricing," suggests that setting your prices too low can signal lower quality.

"Price is an indicator or value for both consumers and producers. A high price implies an increased level of quality and signals desirability to consumers." - pricinghub.net

Let's turn that into a real example; would you trust a $50 lawyer or accountant to manage a critical issue? Pricing is one of the easiest ways to signal competence and expertise.

Calculate Your Ideal Rate

To overcome undercharging, you need to work out two key figures:

1. Your Ideal Earnings: The amount of money that supports the lifestyle you want to live.

2. Your Ideal Number of Clients: The number of clients you can comfortably handle while maintaining work/life balance.

   
   

(Check out this post if you're not sure what the ideal freelance lifestyle looks like for you.)

For example, if your goal is to earn $168,000 annually ($14,000 per month) and you can manage seven clients a month, you should be charging about $2,000 per client.

Now, this works best if you've got a single type of service that you offer, and it's fairly standardised.

But what if you have multiple offers or different products? Don't worry. I've built a free calculator you can use to help work out your ideal rates. Check out my Freelance Pricing Calculator. It's got everything you need to price your project effectively.

What If You’re Not Charging Enough?

If your current rates don’t align with your ideal earnings, you have three options:

1. Lower Your Ideal Earnings: Not my recommendation if you want to achieve your financial goals!

2. Increase Your Client Load: This can work, but often leads to burnout.

3. Charge What You’re Worth: Recognise the abundance of clients available and set your prices to reflect your true value.

   
   

Attract Clients Who Respect Your Expertise

Pricing isn't just about income; it's about respect. When you set rates that reflect the true value of your work, you naturally attract clients who recognise and appreciate your expertise, and for whom price isn't the most important factor. These are the clients who don't just pay well, they often become your best referrals, elevate your professional brand, and make your work significantly more interesting.

On the other hand, consistently low rates may attract clients who undervalue your input, demand more time, and create stress. Inevitably, when I'm working with my coachees to review their pricing structure, their most difficult clients are always the ones that pay the least.

By confidently charging higher, strategically aligned prices, you position yourself more clearly in the market.

Additional Consideration: The Impact of Niching Down

Specialising in a niche can significantly boost your profitability. By focusing on a specific market, you position yourself as an expert, allowing you to charge higher prices for your services. Clients within your niche are more likely to recognise the unique value you offer and are often willing to pay a premium for it. This approach not only improves your earnings but also strengthens your brand. Making it easier to attract and keep the right clients.

Head over to this article, if you want to think more about the benefits and risks of niching.

Conclusion

If you’re not charging enough, it’s time to reconsider your pricing strategy. Don’t let a scarcity mindset control your business decisions. Instead, work out what you need to charge to live your ideal lifestyle and use your rates to attract the clients you truly want.

What next?

Feeling unsure about your pricing? Let’s talk. As a coach, I specialise in helping freelancers and founders sign more clients, work fewer hours, and earn multiple six-figures.

Fill out my contact form and let's have a chat. Or visit my process and pricing page to understand more about how I work with my clients.