Know your own worth

I remember once talking to a trained chef who had been asked to prepare a special meal for a mid-winter Christmas dinner. The occasion was a publicity campaign for an up-market tourist lodge which also wanted him to be their on-call chef. The chef told me that he had been put on the spot when asked what his hourly rate was. As he had not given the matter too much thought, he said the first reasonable thing that came into his head, being $25 per hour. The immediate response was “Well how many hours do you think it will take?” which put him on a bigger spot because he didn’t really know and had to take a wild guess.

My reaction was that $25 for that type of service was far too cheap – especially knowing that the chef is extremely skilled at his craft. I advised him that a far better approach in the future is to take the stance that the hourly rate is only one leg of the equation as the quality of the final product and the efficiency in which it is put together are also contributing factors. It would be far better to have said that the meal would cost the lodge (say) $500 to prepare so that the customer knows exactly what he is dealing with. And the funny thing is that when you do that, the price sounds more than reasonable, even though the chef may well be getting far more than $25 per hour.

I learned that lesson when I first went into practice. I never quoted my hourly rate and as a result, my fees reflected the value of the job. You see, there are other chefs and other accountants around who will always be cheaper when you quote an hourly rate. But who knows how long they are going to take and what quality of product is at the other end. At least if the customer or client has a firm quote then he knows what he is dealing with and can plan accordingly.