This is the fourth of a six part series of articles from two ELT professionals who have successfully done just that: Mike Hogan and Bethany Cagnol. Here, they share advice on how to handle the tricky subject of pricing your services and billing clients.
In the three previous articles, we discussed the areas you may wish to target as a freelancer, your strengths and weaknesses as a business owner, and how you can market your services to your clients. Following a logical progression of developing yourself and your business, the next three articles will look at pricing and billing, maintaining clients, and dealing with success and failure.
How much do I charge?
In a previous article we recommended assessing your current (or desired) standard of living on a monthly and yearly basis and then calculating the income necessary to sustain that lifestyle. Following this, you will also need to assess the market value of language training in your area. Many countries have seen increased price sensitivity in recent years, with per-hour training prices steadily decreasing and making it difficult to make a comfortable living. Therefore, we suggest you remain flexible, at least in the beginning. For example, will there be commuting time involved? Will it require a significant amount of preparation time or none at all? Will you need to invest in training for yourself so that you can better adapt to your clients’ needs? What sort of peripheral services will you include (e.g. placement and progress testing, correcting, proofreading or translating documents, follow-up meetings with HR, etc.)? All of these factors will influence the per-hour or per-package price you should set for your training.
Beware of clients that try to set the price far below the local market value. Accepting it may have a detrimental effect on your quality, and your well-being. Some freelancers are afraid of asking for too much, however setting prices too low is to be discouraged. This doesn’t help the value of the ELT industry and moreover, it might draw your own credibility into question. Be prepared to justify your prices and the value your services will bring.
Just like your marketing plan, how much to charge clients may always be in a state of flux. If your business becomes more successful you can consider charging higher prices. Monitor your income regularly and adjust as necessary to react to the changing market value and additional expenses you take on as a business owner.
The first meeting
Congratulations! A prospective client wants to discuss a training programme. Do your homework before you meet them: Google them, learn as much as you can about their industry. The size of the company, the number of employees, and whether it is public or private may have a strong influence on the amount of money they will be able to invest.
During the meeting, money probably won’t be the first question on their minds. Some clients prefer to sit down and tell you what they want, while others expect you to give them an overview of your services. It’s crucial that you tailor what you offer to what you learn about the client: so ask lots of questions.
When the conversation turns to money, don’t be shy, but also don’t feel obliged to quote a price spontaneously. Many clients expect a quote along with a detailed training programme (in the local language if you can), which can take a day or two to write. In the quote, it’s also advisable to include the conditions of payment, however, depending on the company (public or private), they may or may not be able to meet these conditions, so you may have to be flexible. Whatever the payment conditions are, be absolutely sure they appear in the final order/ proposal confirmations.
Surprisingly, many freelancers struggle with this area of their business. Some admit they feel uncomfortable asking for money while many forget to bill their clients. However, with all the balls you have to keep in the air, billing clients is a ball you shouldn’t drop – your livelihood depends on it!
Send invoices that look professional. On them put your company logo (if you have one), your company information (address, phone numbers, email address, government- issued company and tax numbers if applicable), the title of the training, the dates and times, the hourly rate, the total, payment method and conditions.
Some clients are better than others at paying on time. Sometimes, you may have to deal with a client that refuses to pay an invoice. In such cases, you should get assistance from an accountant or lawyer. Otherwise, expect delays, and be prepared to send friendly reminders. You should also budget accordingly so that you’re not under too much financial pressure if a client is a month or two late settling their invoice. Now that you’ve got some clients to be invoicing, you need to think about keeping them. We’ll be looking at this topic in the next article.
This article first appeared in the February 2014 edition of the Teaching Adults Newsletter – a round-up of news, interviews and resources specifically for teachers of adults. If you teach adults, subscribe to the Teaching Adults Newsletter now.
© Mike Hogan and Bethany Cagnol, 2014. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to the authors with appropriate and specific direction to the original content.