When it comes to pricing products or services, many women do not charge enough.
Two of my friends are very talented artists. I have encouraged both of them to “add another zero” to their prices. Both produce artwork on par with a local celebrity artist who charges by the inch for his art. They are gradually increasing their prices and starting to feel more comfortable doing so.
What do I charge? has to be one of the most-asked questions by new and existing business owners. Unfortunately, it is a question that should be asked on a regular basis.
There are so many factors to consider: your skills, what you think are your skills (yeah, this might be different from what your skills really are), what the market is paying, where you are located and assorted other variables. Tackling this question is one that many business owners put off as long as possible. Sometimes they tackle it by just making up figures and rushing on to a more enjoyable task.
Why is pricing an issue? According to at least one business coach, we don’t charge enough because we a) don’t feel worthy, b) don’t take the time to realistically value and price our work, c) are afraid to go there. For many women, it’s a combination of all three. It doesn’t have to be this way.
Business Coach Lana Dingwall has an excellent podcast covering this very subject. The title of the podcast is “Owning & Charging Your Worth.” If you are having problems in this area of your business, I encourage you to take the time to listen to Lana’s insight and advice.
Strategies to deal with pricing include avoidance and procrastination. Using either of these can cost you money. Better to meet the issue head-on. Set a time aside just for pricing. Turn off distractions and get down to business. After all, it is your business you are growing.
How Much Do You Want/Need to Make?
How much money do you need to make in order to maintain your business? How much do you need to make to maintain the lifestyle you want? Make a list of your current bills. Don’t forget the ones that occur on a less than monthly basis. Property Taxes. Income Taxes. Vehicle registration, etc.
Now make a list of any additional items you desire and the cost to enjoy them. Be honest.
Of course, there are some strategies you can employ. One popular method is to use a calculator such as the one found on Melissa Ingold’s Time Freedom Business. This will quite quickly tell you what you need to be charging to reach your income goals, and it’s a great place to start. (Note – you have to give your email address to use Melissa’s calculator.)
But what about all those other questions? Creating a solid pricing structure requires you to do a little more digging. So, with your starting number in line, take a look at:
Competition. This might take a little detective work, depending upon what service you provide or what niche your business targets. Many coaches and service providers don’t publish rates. You can get a good idea by a thorough check of their website, their social media profiles, and discreet questions.
Be realistic about who you are competing with. Don’t undervalue or over-sell yourself. In other words, make sure you’re comparing yourself to another provider who shares the same skills, market, and track record right now instead of simply looking at who you strive to become. Start where you are right now.
Skills. In some fields, this is easy. There are certifications and educational programs that give you the authority—by virtue of having achieved them—to charge a certain rate. If this applies to you, then pricing will be easy. If not, take a solid look at what you can legitimately claim as a skill.
Look, too, at your track record. Have you proven yourself by helping former clients (and do you have the testimonials and case studies to show for it)? Have your former clients moved on to bigger and better situations after working with you? Did your services help them get closer to their business, social or financial goals? (That’s a good thing!) These are all reasons to maybe consider a higher price range than you might have first thought.
Market. In the game of setting rates, it’s your market that has the final say. As any first-year economy student can tell you, the price of anything can be found where what the buyer is willing to pay meets what the seller is willing to accept.
If your goal is to give newbies a helping hand and lead them down the path to success, that unfortunately means you can look forward to low paying gigs. That’s not a bad thing—everyone has to begin somewhere—but it does need to be acknowledged.
If, on the other hand, your target market is more established and financially stable, then a higher fee isn’t just warranted—it’s a must. These customers will expect to pay a higher price. They will not find value in the lowest-cost provider of anything, whether it’s coffee beans, admin services or business coaching.