She came to me saying “Marissa, I love what I’m doing but I’m just not making it.”
Can you relate?
More often than not, when you’re building a business doing the work that you love — the work you know God put you here to do — profitability becomes a four-letter word.
That’s why as business owners, we need to retrain our brains in how we think about pricing.
The problem underlying low profitability
They say “do what you love and you’ll never work a day in your life.” I believe that. I love what I do…most days. 😉
Here’s the problem with that quote: We don’t equate doing what we love with making money. If it doesn’t feel like “work,” we’re reluctant to charge for it.
You usually don’t realize how valuable your gift is to others. It’s tempting to shortchange it. To discount it. To assume it’s not that big of a deal because it comes natural to you. That’s why most people undercharge.
But after running your own business for a while, you begin to understand your gift’s value. You see it doesn’t come natural to other people. That’s usually the time when you start questioning whether you’re charging enough for your gift.
Symptoms that you’re shortchanging yourself
Every person who’s ever reached out to me for business mentoring always asks about pricing. It’s hard to know if you’re charging too much or too little for the work you love to do.
Here are three symptoms that show you’re not charging enough:
- You’re booking the overwhelming majority of people you talk to. Everybody likes a good deal. If you’re selling gorgeous t-shirts for $5, people are going to snap them up because they’re getting more in value than they’re paying for. If everybody is buying from you, that’s a sign that your value is much higher than the price you’re charging.
- You’re working nonstop. This goes along with symptom #1. If the demand for your services is higher than the hours you have available, it’s time to increase your prices. If you’re working your fingers to the bone 80 hours a week because everybody wants your t-shirts, you’re not pricing them right.
- You’re not enjoying the work anymore. If the work that used to light you up suddenly makes you groan, that’s a sign of feeling undervalued. If you used to love stamping, folding, and packaging your t-shirts but now you want to run for the hills, notice that! It’s a symptom that you need to increase your prices so they feel more aligned with what you’re worth.
The easy way to increase your perceived value
Price communicates quality.
Let me say that again:
Price. Communicates. Quality.
Consumers typically associate quality with higher prices. I know many people who have cheated themselves out of opportunities because the buyer assumed their product was low quality because the price was so low.
Pop quiz: Imagine you’re in the market for a new laptop and you have two options — a Mac for $1500 or a PC for $495. Which computer is better quality?
I bet you said the Mac is better. Even if the two computers had completely the same specs, you would still assume the Mac is better, because it costs more. That shows the power of pricing perception.
Which would you rather be seen as — the sleek, powerful Mac, or the budget PC?
The great thing is, you get to decide! Simply by pricing your services higher, you make them appear to be much higher quality.
When you charge the price you’re really worth, you’ll make more money doing work that you love AND your customers will feel like they’re getting even better quality. Everybody wins.
A note on pricing fear
Money brings up a whole lot of issues for most people. I know it because I’ve lived it myself. One of the most common feelings that comes up when you think about increasing your prices is fear.
My two favorite fear quotes are:
Feel the fear and do it anyway.
Fear is just a feeling.
Acknowledge the fear around your new prices…because it’s real. But don’t let it paralyze you.
Understand that the worst people can do is say “no” to your new prices. And the reality is, if it’s someone who really wants to work with you, there’s this thing called negotiation. They won’t just say “no.” They’ll say “is that negotiable?”
So the worst that can happen is people ask you to negotiate. That’s not so scary, right?
Your ultimate goal is to get to the point where you can be comfortable stating your price and standing in it, and being able to walk away when someone’s offering you a dime when you’ve asked for a dollar.
Now, I know, it’s hard to walk away from a dime, because it’s still a dime! It’s better than nothing, right? Wrong!
If your value is $1, your value is worth $1. You’ll feel like garbage at the end of the day if you accept a dime.
Your value is not for sale. You have to know that and learn to stand in that.
If you don’t value your service, no one else will. It’s crucial — as a business owner and as a human being — that you honor your true worth.
On a scale of 1-10, how happy are you with your current prices? Which of the symptoms of shortchanging yourself are you currently suffering from? How do you tackle the mental game of increasing your prices?
Pricing and mindset are tricky buggers. They also happen to be two of the topics we explore in my upcoming Exhalerate group!
This group is for bold, passionate women for whom success isn’t negotiable. You’re ready to grow an unstoppable business in 2017, love the journey, and connect with like-minded go-getters to inspire and motivate you.
We have two Exhalerate groups starting this month, one for women business owners and one for career women in corporate. Click here to learn more about the Exhalerate group coaching experience.