Not only does “money make the world go ’round,” but it makes most business owner’s head spin. My clients often say that the hardest part of their business is asking for money and feeling like they deserve it. This is somewhat easier for businesses that sell products because their prices are largely determined by fixed costs. But for service-based businesses it’s more challenging because a lot of it comes down to self-worth. What are your time, skills, and energy worth? Here’s a few tips that go beyond the fixed costs method and into the inner-process of price setting:
What is the overall value that you add to your customer’s life?
It’s one thing to provide excellent value while you’re performing client services, but have you thought about the role that you play in their lives? For example, if you’re a hairstylist, you’re role isn’t just to make your client look good for the one day you see them. Your job is help your client look good every day! If you are an alternative healthcare practitioner, your job isn’t just to relieve your client’s symptoms; you’re the person who empowers them to get & stay well. The more you help your customers overall, the more valuable your services are to them.
Are your service times realistic?
Sometimes service providers give too much of their time away, then later feel resentful. If a service routinely takes longer than you’ve allotted, change your service times and raise your rate accordingly. If you’re finding that the issue only comes up with a particular person, do whatever it takes to clear up the codependent pattern. Time management plays a key role in making your service prices work for you, and only you can control that.
Are you charging less than the going rate?
How do your rates stack up against your peers? If you’re grossly undercharging or giving your services away for free, potential customers will wonder about the quality of your services. They will wonder whether your prices are a symptom of low self- esteem or if you’re cutting corners somewhere. Neither is attractive. By doing a little price comparison, you may actually find that you need to raise your prices somewhat.
What if you need to earn more money than the industry average?
Some people add sub-contractors or multiple income streams, which can be good if you have the time & money to manage them. But a more simple way is to add more value. What perks and extra services can you build into your pricing so that you can charge top dollar? There are people who are willing to pay a premium price as long as they receive premium services.
What do you think you’re worth?
Set your prices at a level where you can look someone directly in the eye and ask for that amount of money. If you don’t feel like you are worth the amount of money you are asking for, your customer is going to pick up on that. They’re not going to feel that you’re worth it either! So if you must, charge a little lower rate in the beginning. When your confidence and expertise increase, pay attention to your pricing again. Do not continue to undercharge once you are ready to own the new level, or you will perpetuate a pattern of low self-worth.
Are you willing to ask for the money?
One of my personal annoyances is the Sliding Scale pricing method. A lot of business owners feel uncomfortable asking for money, often because they don’t want to experience their customer’s discomfort about money. So they try to avoid this by putting their professional responsibility onto the customer. If it’s hard for you, how do you think your customer feels about having to sort it all out? Don’t do this to them. Set your prices and be willing to explain them if you need to.
What’s your perfect pricing “zone?”
The right pricing structure will strike a balance between meeting your financial requirements and the needs of your customers. Look at your spreadsheets, but also listen to your conscience. Stretch yourself to have more abundance in your life. Be generous with the value you provide. When you’re in the perfect pricing zone, you’ll feel great about how much you’re giving and receiving.
Jaya Savannah - Chief Inspiration Officer. Strategy Coach for Holistic Businesses. Trainer, speaker, and writer. Spiritually aware, yet street smart. Elephant lover.