Marketing and valueing yourself as a young freelancer

[Quaker]

I am a young freelancer who does academic tutoring and college admissions consulting. I would like some advice on navigating the market and determining my own value in it. The tldr version is this: I want to start charging clients more, but I am afraid of losing business and realizing I'm delusional about my own worth. It's an incredibly shitty feeling to pitch a price to a potential client that seems so reasonable to you, only to have someone never call you back and implicitly communicate that "You're not worth it". I'd really appreciate the advice of anyone who has run a business or been a successful freelancer. 

After 6 years of higher education, two degrees (a BA and an MA), and a prestigious government fellowship abroad for a year, I have finally returned home  to the US and begun my career. I decided that, at least for the next few years, I want the flexibility and liberty of being a freelancer, so I decided to start finding clients doing a service I've done for years - academic tutoring and test prep. I have always enjoyed working with students of all ages (although I probably get along best with high schoolers), and I know that there is a huge demand for my skillset, being that I went to VERY good universities. I find it so rewarding to share my knowledge, inspire my students, and have a hugely positive impact on the entire rest of their lives by getting them into the best possible universities. I also know that tutoring can easily be done remotely, which is perfect, since my dream is to live abroad and work remotely with clients living in the US. 

I decided that in order to attract new clients, I would only charge $25/hour for lessons on Skype, when in reality I believe I should be paid at least $50. However, I have to admit that the low rate was also because I was afraid I wouldn't find any willing clients if I charged more. I'm actually pretty happy with $25/hour at this time; there's the convenience of not having to leave my bedroom, it's far more than I made at my $8.25/hour summer job in college (and the $15 per hour I charged for tutoring before I had my degrees), and on an hourly basis, it's about as much as most young people in finance make (they just work A LOT of hours). So to me, the goal was getting more hours, not finding out how to charge more for each lesson. And to be honest, I feel good about offering so much value at such an affordable price, and I feel like my clients really appreciate it.

The reason I'm conflicted is that while I'm content with the current rate I charge, and even feel fortunate to get it, it's still far below what others in my industry are paid, including those less qualified than me. My mom told me about a colleague of hers who is a college guidance counselor and tutors on the side for $75 per hour. She actually has a Master's from the same university where I went to undergrad. When my mom tells me I should charge more because I'm way more capable than her colleague, I just say people are willing to pay her colleague $75 because she's older. It's hard to imagine anyone being willing to pay $75 to a 25 year old, even if they went to great schools. Moreover, local tutoring companies charge as much as $200/hour! I do plan to split my time between freelancing and working for such companies, though they only pay tutors with my experience about $40, and the commute is a pain. I am so confused about how these companies are able to convince parents to pay that much, but I as a freelancer am afraid to even try to charge what seems to me like such an insane amount. There have been some bright spots, such as getting on the roster of a boutique company based in a major city that pays $50 per hour to tutor on Skype. It seemed like a dream gig. The problem is that they offer almost no hours right now. In fact, I don't even know why they were looking to hire new tutors (They reached out to ME). I remember being amazed that they pay $50 for Skype, and being really disappointed to find out they offer almost no hours, at least not for new employees.

(Probably some irrelevant details in this paragraph, sorry): In spite of my conflicted feelings, most of the endeavor has been going well; I have 3-4 loyal clients, who will likely give me referrals in the future, and another 3 or so in the pipeline. These clients give me steady hours, never cancel, and pay on time (mostly). Many freelancers struggle finding clients, but in my view that's mainly because they don't take advantage of all the online resources at their disposal (They focus on Upwork instead of thinking outside the box and posting ads on places like Care.com or even Craigslist). They also overestimate how many clients they need to find to sustain their business (I'm actually thinking of writing an article about how freelancers don't actually need that many clients, they just need ones who will give them enough hours). I actually find that I love the hunt of finding new clients, of marketing myself and the rush of hearing a client say they want to refer me to others. And when I hear "thank you" from clients, it really means something to me. I do have to admit, however, that it can be hard to get as many hours as you want right off the bat; I started out only getting 10 hours of work per week, and it's gradually approached closer to 20. With the 20-25 hours per week I'll get once I join a company, I'll have a full-time schedule, though the goal will still be to break out fully on my own, eventually. 

I want to get into a position where I can charge $50 (or more) per hour to clients working over Skype and $75 per hour for working in-person. As someone with fantastic academic qualifications and 500 hours of experience, I feel so qualified and so worthy of getting paid far more than what I currently am, but I feel like my age and perceptions about my experience level are holding me back. How do I prove myself as a freelancer? Do I just need to grind for a while at a lower rate in order to get referrals, or should I start charging more right now and take whatever comes? Thanks in advance for your responses. 

[Brandon Nankivell]

Can you have a conversation with your Mom's colleague about how she gets her clients and how she markets herself? Better yet if you can speak to the students she tutors, you could ask them why they pay $75 instead of $25. You may not get a perfect answer but it's a start.

Your Mom's colleage + the existence of companies charging $200 already tells me there are people out there willing to pay that much.

I doubt it's entirely dependent on the fact that you're 25 years old, although I could be wrong. I don't know the education/student market well enough.

You could try marketing yourself as a company that you happen to work for, sell to richer/prestigious students, or find a way to convey more value (learn sales!).

The blanket answer for should you start charging more right now or take whatever comes is to charge more right now. It sounds to me like you have the value to provide and there is a market who pays $75-$200.

I know it's scary to up your prices and risk losing clients. I've been there. But you simply will not be receiving $50-$200 for your services if you aren't willing to take the short-term risk.

Good luck!