Mauro

As you know, I'm not a programmer or developer, but I have run independent professional service businesses for 3 decades.

The two problems you cite--others undercutting your price and pressure from clients to drop your pricing are common in every industry, and have always existed.

Some of the problem can be linked to a basic aspect of capitalism as practiced in the 20th & 21st centuries--there is always a struggle between the buyer (who wants the highest quality at the lowest price) and the seller (who wants the highest price possible for the level or quality of work s/he offers).

And some of the problem can be linked to client education: if the person you're working for doesn't understand why s/he needs you to do the work you do, it's that much harder to convince her or him to hire you at the rate that you need to be paid.

Yes, you can blame the global marketplace, which permits competition between you and people with (and yes, sometimes without) training who live in developing countries or even in regions of your own country where the cost of living is lower. And you can fret because the ultimate end of this globalized race to the lowest price may be lower prices for everyone.

But not necessarily. Here are some of the things I recommend to my clients to consider.

1. Recognize where you sit on the spectrum of all people offering your services in the world. There will always be people who charge less, just as there will always be people who charge more.
2. Make sure that the pricing structure you use for the work you is solid. I like to point out that there is no such thing as a "going rate" for any work. What does exist is a number that represents what you need to be paid for your time and your skill. There is no point to agreeing to do a job for $25/hour if, in order to stay in business, you need to earn $75/hour. I don't care what they promise you in terms of future work.
3. Practice saying "Maybe I'm not the right person to do this job for you." In a truly successful business you will walk away from something between 30 and 60% of the jobs offered you. I don't mean bidding situations where you lose, either.

Most people do a lot of client exploration in the early days of their business, and then forget to analyze what they learn in those first years. For example, you might discover that you:

• dislike working with established small businesses because there's always too much scope creep.
• like working with startup businesses because it's exciting.
• dislike working with startups because there's never enough money and you're always asked to delay payments
• love working with schools because you can teach 12-year-olds how to design.
• love working with schools because the government always pays and once the work has been done once it doesn't take that much to do again
• enjoy non-profit work, but they routinely demand a 15% discount which I can't afford.
• hate freelancing, period. The minute I find a real job I'm outta here

(This is a made up list, of course)

In the rush to stay busy at any price, it's easy to forget that you need to act on what you know.