Struggling With Client Rates

Let me just say this.  Determining client rates and sticking by them has been the most difficult part of my job as a solo practitioner/small business owner.  Before I officially opened my doors, I had to determine the hourly rate and flat rates I would charge my future clients.  My only two self-induced requirements were to pay myself a fair wage and not take advantage of my clients.  That was it.  Having only two requirements seemed that this part of my planning would be a walk in the park.  Well, it hasn’t been.  Not only did I struggle to create a pricing structure, but I still struggle to maintain it.

Money is not a top motivation for me, but I also want to make my private investigator endeavor successful.  My background is teaching and crime analysis.  Everyone knows teachers don’t make a great wage.  As a crime analyst, I worked for a city government and my wage was even worse, believe it or not.  I did feel a bit cheated at times, working so hard, earning both bachelor’s and master’s degrees, and making less than some of my counterparts who were less qualified and produced only mediocre, or even shoddy, work.  So when I went out on my own and founded New Hope Investigations, I was determined to finally earn a more competitive wage.

I started by conducting research to find the ballpark for private investigator wages.  The spread is wide, depending on many factors, so I narrowed my research to solo practitioners with similar specialties as the ones I would offer.  Even on the low end, I knew that I would be making a higher hourly wage than I had ever made in my previous careers.  I felt vindicated!

As I considered creating my rates on the lower end of the private investigator spectrum, both my private investigator mentor and my husband separately encouraged me to reconsider and bump myself up to at least middle-range.  I argued that because I was just starting out and new to the profession, it was only fair for me to charge lower rates, at least in the beginning.  They disagreed.  They knew more about marketing than I did and explained to me that I didn’t want to price myself out of a job.  Also, the more I read and researched, the more corroborating evidence I found that it is never good to be the cheapest anything.  As a private investigator, if I priced myself cheaply, then I would attract cheap clients.  The statistics showed I would eventually go out of business.

So I bumped my rates up to middle-range and got started.  I thought that would be the end of my client rate struggle.  I knew I would be turning down potential clients who couldn’t or wouldn’t pay my rates.  I just didn’t know it would be quite so difficult.  Every client has a story.  And many of them can be a little heartbreaking.  I’ve always been for the underdog, so it’s been especially hard to turn work away just because of a disagreement on rates.

The thing is, I DO understand when potential clients balk at my rates.  A few years ago, I had to hire a private investigator to find my son’s birth father.  It was during the legal process for adoption and I didn’t have any choice.  I paid him $150 per hour.  Paying him his fee and paying all of the attorneys’ fees that racked up was miserable.  Here I was, adopting my son out of some pretty terrible circumstances, and I was the one paying for it all.  So yeah, I do get it.

I hadn’t been able to see the other side of it until now.  I am now the private investigator charging a fee for my services, sometimes even searching for a birth father for a client.  I didn’t realize until I started working as a private investigator that a hefty chunk of my fees would be going to the cost of running a business.  I have two state licenses to maintain, which include re-licensing fees every few years, plus continuing education requirements.  I have an office, which requires a whole host of equipment, most of which is not cheap.  I have monthly database fees, software expenses, website and other online fees, marketing costs, travel, the list goes on.  So my mid-range fees don’t look quite as hefty to the private investigator me as they might have looked to the client me a few years ago.

If you’re stuck on your fee structure, no matter your profession, take it from someone who is still learning.  Don’t sell yourself short.  You’re not going to be pocketing as much of your fee as you think.  Don’t be the cheapest!  You’ll work yourself into the ground and burn out.  Stick to your guns!  Don’t let clients talk you out of your fees.  Of course it’s okay to discount fees here and there and even work pro bono for what you can handle.  Just don’t charge your full fee on rare occasions and a discounted fee most of the time.  Reverse that.  Do honest work and work hard.  Work hard at everything.  You’ll find your groove.  I’m starting to find mine