As professional bookkeepers trying to build our client base, it can be discouraging to see others advertising a (much) lower rate. How on Earth will you ever get more clients when others are offering the “same” thing for way less?
But here’s why you should try not to get discouraged.
If you haven’t read last week’s blog post Are you Charging Enough? then I suggest you do so before reading this one to remind yourself about all the reasons you shouldn’t charge low rates.
The reality is that there are bookkeepers who are way undercharging. It’s not uncommon, I come across if often.
But they usually don’t know that they are undercharging. They don’t know what market rate is (the number of times I’ve heard bookkeepers say that they had no idea) and they don’t yet appreciate the value that they bring to client’s businesses. You don’t know what you don’t know and there are many amongst us who started out in this very same place.
Don’t judge. Everyone is on their own journey.
They may have come from employment where $25 is an OK wage and they haven’t taken into account all the other costs and considerations that come with pricing services.
They may feel that they’re not worthy of charging more because they “don’t know enough.” Sometimes this is a mindset issue and sometimes they really don’t know enough, and they may not have a network of other bookkeepers to call on for help and learning.
They might be desperate. These are difficult times for many and maybe any income is good income at this point if you’re just needing to feed your family and pay your rent.
Their time may quickly fill up, and then what? If they can secure a lot of hours at that rate without running all over town then they have an average job at average pay, and maybe they’re OK with that.
Remember what I said last week about perception. Just because they’re charging low rates doesn’t mean that they will be hired ahead of you. Sometimes you get what you pay for and your ideal client is someone who understands that.
Same-same is not always the same. What they are calling bookkeeping may be nowhere near the level of service that you provide or your breadth of experience. In my years of software consulting, I have come across a lot of bookkeepers or accounts people on a very wide spectrum of knowledge and quality of service.
Don’t be tempted to discount or follow their lead just because they are undercharging.
You know what you need to account for when pricing. You understand that you are in business with expenses and continuing professional development to your name.
You forget these things and you are at risk of finding yourself making no more than minimum wage, or an average job making average pay.
The question is, are you building a business, or creating a job?
But even if you are creating a job, what if you could give yourself a pay rise? You still deserve to be paid market rates just like everyone else.