Learning how to set your fees and charge what you’re worth as a freelance ESL teacher is one of the most challenging parts to getting your business started, and to make it grow.
In our last podcast, episode 7: How To Set Your Fees , I began a conversation with you about how to set your fees for your hard work.
The Problem With Setting Your Fees When You’re Just Starting Out
“I’m going to charge what I’m worth.” What a great declaration, right? You say it, and it feels powerful, and exciting!
But I bet you never counted on accidentally opening a pandora’s box that was sitting quietly inside you! As soon as the words ‘…what I’m worth.” left your lips, the latch on that box popped, and the lid began to creak open ominously.
Inside that box, is a swirling cloud of uncertainty and confusion: how do I charge what I’m worth if I’ve never set my fees or taught as a freelance ESL teacher before?
How I Got My Start
When I think back to when I first asked myself that question about how much I should charge, I can totally remember feelings of confusion and doubt washing over me. “How do I know what I should charge…I’ve never taught before!”
And not far behind those confusing feelings came: “How could you even dare to charge someone for your work – you’re just an English speaker. Not an English teacher.”
“Look at the guys in those fancy classrooms!” I often found myself thinking as I walked by a posh looking glassed in Berlitz classroom in route to a class in downtown Mexico City. The teacher was dressed in a nice suit, was writing some vocabulary words on a cool looking whiteboard while his very full class watched carefully. And then there was me, trudging around the city, bumping about in crowded microbuses, and descending for hours into the city’s subway system to reach my classes. “I bet he makes way more than me!”
The Problem of Self-Confidence
For me the biggest obstacle to setting my fees was that I found it hard to believe I could charge above my $90 peso x hour rate set by my employers at the time.
Then there was my lack of experience, and a total lack of self-confidence.
Wickedly, they’re both kind of connected. One tends to lead to the other, doesn’t it?
Of course I would struggle to see myself worthy of something higher while I still was very much a newbie teacher. Over time, like a year or two, as I grew into my role as a teacher I did feel my self confidence improve. And as my experience grew, and I met other teachers, I began to see that there actually were other rates out there, and not the $90 pesos x hour my employers were paying me!
My world got bigger, and eventually so did the fees I charged.
I never was abusive in how I set my fees, that much I know for a fact, but once I learned I could charge higher – and that I should be, and I felt I could be – I began to push my fee envelope wider. By the time I reached the end of my solo teaching journey, I was charging $250 pesos the hour.
A big difference from my starting point, right?
But here’s the important thing to remember: I didn’t start out at $250 pesos per hour. I started out at $90, and I took it because I was told that’s what I was going to be paid by my employer at the time.
I didn’t think there were other options out there.
What This Means For You and Setting Your Fees?
If you’re just getting started as a freelance ESL teacher, you may not have a lot of teaching experience. That lack of experience may be giving you a hard time as you try to set your fees. What do you think?
Take a look at the graphic. What I’ve tried to demonstrate are three things:
- Experience is Directly Related to Confidence. Your teaching experience will often determine your confidence in setting your fees higher. The more of a ‘newbie’ you consider yourself, the less you tend to think you’re worth.
- Employee Thinking Limits You Severely. If you’ve worked for an employer, your thinking around how to set your own fees will be ‘tainted’ by how you were paid – which was often a static – LOW rate.
- You Should Be Charging More! As a freelance teacher, you need to remember that YOU set your fees – not an employer. The fees you should be charging are likely a lot higher than what you think you’re worth, based on your local market conditions, the value you are able to provide for your students, and your growing skills and experience.
Here’s what to do about the experience problem:
Are you ready?
I know, right? Not world smashing advice, but it’s exactly what you need to hear right now if you’re still ‘green.’ You only gain experience by actually doing the work of teaching!
The best part: as a freelance teacher, you don’t wait for a school or employer to ‘give you permission’ to teach by hiring you. You hire yourself!
So stop wondering if you have what it takes, and get out there and get your first student! But what should you charge for those first few students?
What if I…
- I strongly feel that charging market rates isn’t right for me to do… If you’re REALLY feeling like you shouldn’t charge a lot for your work because you’re just getting started, try charging what local employers would pay teachers. Often schools and language teaching companies don’t pay amazingly well, but they do tend to pay higher than what you think you’re worth. Just promise me something: you won’t stay at this rate! You are worth far more than what an employer will pay you. I promise! Give yourself a month or two at this rate, and then begin bumping your fees up as you feel comfortable in your own skin as a freelance English teacher. Ok?
- I just don’t know how much to charge. Never tried to set my fees before. Check your local market to find out what other freelance ESL teachers are charging. Look around at Craig’s List for your area, or online/paper based classified ads resources – local newspapers often have them. Try and find 5 to 10 teacher ads, and note down what each teacher charges. Get the average market price where you live by adding up all the rates you found, and divide that number by the total number of ad samples you used. Example: Ad 1 = $10 dollars x hr. Ad 2 = $15 dollars per hour Ad 3 = $15 dollars per hour, Ad 4= $18 dollars x hour, Ad 5= $20 per hour, Ad 6 = $22 dollars per hour, Ad 7= $30 per hour, and Ad 8 = $20 per hour. Now…add them all up: 10+15+15+18+20+22+30+20 =150. Now divide 150 by the number of ad samples, which is 8. 150/8= $18.75 per hour. The average hourly rate in this pretend location is $18.75 per hour.
What To Do With Average Rates
In short, experiment with them! Remember, your rates are never set in stone. As you set and use your rates, and as your experience and skills grow as a teacher, don’t be afraid to examine your rates!
- What would happen if, right from the start, you set your fees slightly above average? In our fictional example the average market rate was around $19 dollars. What would happen if you started off with a $20 per hour rate? Try it out and see! If you don’t get any students, you can always reset and try again.
- Avoid going lower! Remember – your rates are saying things about you! Lower rates = cheap service in your prospect’s eyes, and you for sure don’t want your prospects to see you as being cheap! Please keep in mind that higher, but responsible rates, often speak of higher quality to your students and prospects!
- Are you still struggling to find students at average market price? Are you advertising in the right area of town? Have you seen different income zones where you live? Many spots have places where people ‘with money’ tend to hang out. Be sure you’re advertising your services where people who can afford you can find you!
Over to you: How are you doing at setting your fees? What’s worked for you? Where are you stuck? Leave a comment below, I’d love to hear from you!