The Risk of Charging Too Little

Underpricing isn’t a pricing problem. It’s a risk problem.

You Think You’re Playing It Safe… But You’re Not

One of the most common mistakes I see when people make the move from employee to contractor…

is underpricing.

It feels logical.

You think:

• “I’ll just start a bit lower”
• “I need to win the work first”
• “I’ll increase my rates later”

But what you’re actually doing is transferring risk… in the wrong direction.

What’s Really Happening

When you underprice, you’re not being competitive.

You’re:

• absorbing uncertainty
• reducing your margin for error
• and setting a precedent that becomes very hard to unwind

Because pricing isn’t just about winning work.

It’s about sustaining yourself once you’ve won it.

Here’s the Reality Most People Miss

When you were an employee:

• Risk sat with the organisation
• Income was stable
• Mistakes were buffered

When you go solo:

• Risk shifts to you
• Variability increases
• Responsibility expands

And if your pricing doesn’t reflect that shift…you’re exposed.

Underpricing Creates Three Problems

1. You attract the wrong work
Low pricing often signals low value. It pulls you into short-term, transactional engagements instead of strategic ones.

2. You lose control of your time
You need to do more work to earn the same income. That means more clients, more pressure, more fatigue.

3. You limit your growth
If your baseline is too low, every future increase becomes a negotiation battle.

What You Should Be Doing Instead

Pricing needs to reflect:

• the value of the outcome
• the risk you’re carrying
• and the sustainability of your model

Not just “what you think someone will pay.”

Because going solo isn’t about replacing your salary.

It’s about building a commercial model that works long-term.