Are you really charging too much?
As a small business owner, I belong to many small business groups on Facebook. I also manage a group called Mckinney Small Business - Shop Local. From time to time I come across questions very similar to the one that inspired this blog post. Today I decided I would weigh in and reply:
To which the business owner elaborated and said:
Has this ever happened to you? What did you do?
This may apply to you if you’re a new entrepreneur or thinking of adding a new product or service into your existing offerings. Doubts typically creep up when they find out clients are slow to jump right in.
When you set your pricing, it’s important to consider the following:
What do you sell? - Is it a product? Strategy? or Service?
To whom are you selling? - Another business? We’ll come back to this.
What’s your process? - Is it the same as everyone else or do you have something that sets you apart?
How does your service compare to your competitors? - For example, as a web designer, working with me means my clients will get concierge service as I only work on one client project at a time. I find it helps us both stay focused & on schedule.
Can you show proof? - Keep good records of how your current clients are progressing; case studies are essential! If you are new, consider offering your service as you plan on marketing it to a friend or family member to create an initial case study.
Timeframe? - How long will it take for them to see results? Are your results and is your process faster or slower than your competition?
How does this benefit my client specifically? - Will doing business with you help others bring in new clients? If you’re a B2B reading this - if it is something that helps you grow your business it’s worth exploring!
Pricing - Does your price match your service? Have you researched what the competition is charging?
But let’s not confuse cost vs worth... I was happy to see the owner of the Facebook post defend his stance to a skeptic by saying:
If you provide a service that has the potential, the capacity, the certainty, to help an entrepreneur grow their business:
You is important!
In other words, you have something they NEED!
If doing business with you gets them more business, don’t take that lightly and shy away from charging what you’re WORTH.
Whether or not an entrepreneur has a lot of expenses already is NONE OF YOUR CONCERN. They either believe in the value of your service or not. They either trust you or they don’t. No one walks into a BMW dealership and asks for a discount. They pick an engine size and choose their interior finish.
Have you ever wondered why that is? It’s because every product and every service has a target market. Every small business owner should be very familiar with their own ideal client avatar
who is your target audience?
In direct response to that original post: Don’t ask for permission. Whatever the amount you landed on, is up to you to make. Perhaps a newly formed business owner is not your target market. Your target market and ideal client may have an established business and will look to you for new ways to build and grow.
Now go build a product for THAT person. You are fabulous, whether or not they can afford you.
Try to imagine who is most likely to pay your rate without throwing a tantrum or thinking twice about it? What might their income be? Their preferences or hobbies? Who is going to wear the T-shirt and wave the big foam finger in your name?
Unfortunately not enough people take the time to make this determination before moving forward. Somewhere along the way small business owners were taught to believe they should be all things to all people. “Close the sale no matter what!” Well, this is wrong.
The truth is: at the end of the day, you may come across people that would be horrible to work with. You know who they are. Don’t take them on as clients just because you want the cash. That is not a healthy way to grow your business and it sends the wrong message: If I whine about the price, they will lower it.
It is not your responsibility to help a business owner budget their finances. That is entirely up to them. You have expenses too. The most important one being YOUR TIME.
This kind of attitude typically ends in disaster as an entrepreneur shoots into the wind and gets clients only by the accidental ricochet of a friend’s recommendation. But those recommendations often dry up. Then what?
It’s time we stop doubting ourselves.
Welcome to the blog! My name is Edith and here you will find my thoughts on how to grow your business organically and with intention. When I am not writing, I am busy running my digital design boutique which focuses on helping small business owners boost their personal brand and attract their ideal client with brand design, photography, and Squarespace website design.
I live in McKinney, TX with my husband and a 2-year old Maine Coon cat named Lilou.