How do I know if I'm charging enough for my services?
Pricing. Is it dark magic or is there a logical approach when it comes to charging for your products and services?
We explore this topic with It Takes Tits, Sal Jefferies, and Matt Saunders to uncover why so many business owners get stuck on this and pay the price in the long term, so you can avoid those mistakes.
It won’t be a surprise to know that founders of good businesses are drawn to setting up on their own because of their passion to have an impact, not to make millions. But when it comes to pricing and sales, getting it right is critical to surviving.
So here’s what you need to know to ensure your business sticks around to continue doing the impactful work that’s so needed in the world.
Know your worth
“Knowing your worth and distinct qualities is the first step to knowing- and getting- what you’re worth”
Beth Lunn, It Takes Tits
We’re going to be straight with you. As a good business owner, it’s very unlikely you are over-charging and much more likely you aren’t charging what you are worth.
When it comes to pricing, Beth Lunn, Founder of It Takes Tits says it’s all about self-worth:
“Knowing how to price your services isn’t just about the practicalities, it also requires you to be self-aware and to step into your own leadership.
I used to hide behind a fear of not feeling ready, worthy or certain of my value and I’d let those (incorrect) beliefs stunt my progress and indeed pricing, ‘I can’t charge THAT, I’m not that good am I?’ Yes you are!
Knowing your worth and distinct qualities is the first step to knowing, and getting, what you’re worth. I used to undercharge as I was worried if I priced what I really thought I was worth, no one would buy from me. Unless it's part of an upsell or incentive strategy, giving people a bargain doesn’t communicate your value. Though you’re far more than a price tag of course, don’t sell yourself short.
First, find your purpose; the reason you do what you do then link that to what is so original about you - the way that only you can do it. Why would your potential clients choose you over anyone else?
You are your best investment, and you know you’ll change their life / bottom line / experience / impact/ day… Now go rethink that price. “
Unless it's part of an upsell or incentive strategy, giving people a bargain doesn’t communicate your value. Though you’re far more than a price tag of course, don’t sell yourself short.
Confront the emotions around money
“Once this happens, you will be free to deal with the reality of the situation”
Sal Jefferies, Mindset Coach
The most common emotions around money are guilt, shame, fear, and envy. And the natural tendency when confronted with these emotions is ‘to avoid facing whatever is making you uncomfortable.’
Sal Jefferies is a Mindset Coach who works with people to explore the effect money can have on them emotionally:
“The first step when dealing with your emotions around money is to accept any difficult emotions that may arise; name them, feel them and allow them to be.
You’ll be surprised how much a relief this is to avoiding them. The discomfort will fade if the bodily sensation is allowed time to process.
Once this happens, you will be free to deal with the reality of the situation which is the only place to work from if you really want to have a breakthrough around money this year.”
So if you’re avoiding the money conversation because it is too emotionally charged, start by just accepting what comes up. This is a small but mighty step in transforming your relationship with money.
Price for growth not survival
“Add value at every stage and your business will flourish.”
Matt Saunders, Coach
Another common pitfall is pricing based on the direct costs to create or deliver the work and this will lead very quickly to burnout and also being stuck in survival mode.
Matt Saunders’ mission is to help build a world where creative people are operating at their highest level:
“When setting prices for your products or services it is vital that you consider not just financial sustainability, but active and continued growth as well. This imperative has been met with some disapproval under the pure “for-profit” model, but for businesses for good what it actually translates to is greater impact. In my experience, working with charities in the digital space and encouraging a serious investment in the relationship not only supports my business growth but also enables me to deliver a better service. The net effect of this is that the overall impact is deepened.
My advice to entrepreneurs more generally is this: if you go cheap on your prices, you'd do well to have repeatable steps in your process so you can deliver a high volume of sales without dropping quality. If you go high value, on the other hand, your solution can be more tailored. Always try to avoid the middle ground on pricing because your customers won't know where they stand. Add value at every stage and your business will flourish.”
So work out the full costs of the business, not just now but in the future, and price your offers based on those figures.
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This is a really challenging topic for most businesses, so don’t feel alone in it. These three areas are great starting places on the journey to creating a business that is sustainable in the long run and don’t be ashamed to ask others in your network to offer further guidance from their own experience.
Go back to the drawing board and be bolder with your numbers and see what happens. This could be the article that changed the trajectory of your business.
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