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Let’s talk about pricing your services in your business.
For me, pricing was a huge mental block when I first started. Let me know if you can relate.
You’ve just started your business & the pricing question comes up. You’re feeling like while you know you can do the job, you have that self-doubt going in the back of your head, wondering why someone would hire you if you don’t have a ton of experience, wanting the price to be affordable to your client but also enough that you make a profit… there are so many factors that come into play when setting up your pricing.
Also, if you’re lucky enough that you can create packages & have the pricing be cut & dry, that’s great. But what if your pricing depends on different factors with each client so there can’t be set packages?
I believe pricing is one of the most significant stressors for new businesses and, honestly, even seasoned business owners. The life of a business owner is constantly in flux. You’re constantly checking to see what’s working, why something else is not working. You’re constantly tweaking, changing, moving…life is never static!
So, let’s talk about pricing and some systems & thought processes I’ve found to be helpful when developing my pricing plan for my clients. And I realize I’m mainly talking to service providers because that’s what I have experience with! I don’t have products that I supply, so I’m not as familiar with setting product pricing. But some of the same principles could be applied to products as well as services.
First of all, let’s look at your mindset.
You, your time, talent, and skills are worthy of being paid a fair wage for the services or products you provide!
Read that again, Momma.
I know this can be hard, especially if you are coming from a situation where you felt like you were “just a mom” or that your skills weren’t valued or appreciated. But just because you’ve felt that way previously doesn’t mean you need to continue in that mindset.
What you bring to your clients is needed, valued, & deserves to be paid fairly. Your time, your skills, your expertise is valuable. You are valuable!
Our minds are fickle & easily swayed with our emotions, so you need to keep this in mind & do not cut your costs because you feel like you aren’t valuable because you are.
I didn’t put a bunch of stock in the whole mindset thing until I became a business owner & saw how certain feelings could make or break my day & outlook. Now it’s not my main focus, but I do look at what I’m thinking of or how my mindset is & work at having a positive, confident mindset. I know that when I’m feeling confident & KNOW that my services are valuable, my sales calls go better, there’s joy in the work I do, & my outlook is sunnier!
But at the same time, if you take out the emotional baggage from pricing, it is cut & dry. Know what your work is worth, feel confident in your pricing when you quote a client, & then sit & wait for them to make a decision. Don’t make excuses for your pricing because then the client will try to coax you down & then you’ll end up resenting them.
Second, let’s look at your hourly rate.
Everyone has an hourly rate, even if you don’t charge by the hour. You need to pick an hourly rate that you can use as a baseboard for your services that is competitive with what other people in your field are charging, one that is a good deal for your clients, but also where you won’t feel resentful of your clients when you are working with them.
So, look up what people in your industry are charging as your first step. It’s easy for someone to say, “I need $100/hour,” but what if someone who’s been in the field for ten years only makes $50/hour? You’re not being competitive in your pricing & you will have a hard time finding clients.
On the flip side of that, it would be crazy to charge $20/hour when your competitors are charging $75! When you do that, you’ll find yourself resenting your clients because they know they’re getting a deal & will start taking advantage of you & your work.
Third, if you don’t have set packages, what is involved in giving a quote for your clients?
There will be the hourly factor, but what else comes into play for that quote to be made? Think of those things, figure out reasonable prices for each one, & how they all work together, and then make a spreadsheet/calculator.
When I give my potential clients an estimate, there are four different factors when creating a quote, so I have an Exel spreadsheet that is my pricing calculator. When I’m on a sales call, I can plug the numbers in I need for the different categories, & then I’m able to give my potential clients an estimate quickly.
This pricing calculator has been huge in making my estimates measurable, not shortchanging myself, being consistent with my clients, & being competitive with others in my field!
Last, & I think most people forget this one, regularly check in on your pricing for each client to see if there needs to be an adjustment.
Here’s the thing, businesses change. They grow & they shrink. Just because you quoted a client a specific price six months ago doesn’t mean it’s relevant today or six months in the future. So you need to make sure you’ve created a schedule where you check on each client, what you’re currently charging them, see if the workload has changed in either direction, & then adjust your pricing accordingly.
Also, you gain skills each day & with each new client. The price you were charging hourly a year ago shouldn’t be the same price you charge now! Just like with my first point in this post, you & your skills are valuable & your price should reflect that. I know that it seems weird to charge more than you did a year ago when you find you can now do the job quicker, but you can do it quickly because you have the skills to know how to do it quicker! You know more. Veteran Drs are paid more than Drs straight out of med school; experienced electricians are paid more than apprentices…experience matters when it comes to pricing!
I know pricing can be complex & one thing that you’ll get the most push-back in your business from people who want it cheaper (and honestly, there will always be someone who wants it cheaper no matter what your price is), but it’s also the thing that keeps your business going!
Leave me a comment about something that’s helped you with your pricing!