Charge Your Worth!Nov 21, 2015
If you are a new business owner, establishing prices is one of the most challenging things at the beginning of your business. It is so important for you, as a new business owner, to charge your worth! In this article, I will explore some of the reasons for the challenge and how you can combat the fear of higher prices.
Let’s face it, when you first go into business you are unsure of a lot of things. You see others who have similar businesses, compare yourself to them and lose a lot of confidence in doing so. When you question your ability based on PERCEPTIONS (not reality) of others in your field, you start to question your worth. When you fall into this trap, you tend to charge less than your worth because you are not confident enough to actually charge your worth!
When I first started my business, I researched pricing very thoroughly. I knew what others in my area were charging and what they offered for what they charged. Since I was a new business owner, I was not confident to charge my worth. I questioned whether I was as good as competitors, or knew as much as they did, so I charged less than my worth. I knew I was charging less than local competitors and I was providing more for that fee than they were, but I kept listening to the choir and questioning myself.
I once had someone even tell me they could hire a college student to do what I do for less than 10% of what I was charging. Really? Does a college student have the same insight that comes from decades of business experience? Does a college student understand your customer avatar and have the ability to connect on a level necessary to convert that fan into a paying customer? While some may have these abilities, few would provide the quality I was providing for the price they were suggesting.
Truth be told, if I were to work for the price THEY thought I should work for, the quality of what I do would not be present in my work, and that is something I was NOT willing to compromise. If I were to do the same quality of work I choose to provide for the price THEY thought I should work for I would have to provide my services for $2.29/hour. Now anyone in their right mind knows a business cannot sustain on that kind of income. Plus, why would ANYONE work for that amount when it is almost 4X LESS than minimum wage? Clearly, this person did not value what I do, nor did they understand the quality of work I wanted to provide to clients.
To be honest, this scenario really disturbed me. So much so that I questioned if I was pricing TOO MUCH, even though I KNEW I could easily charge MORE and still be below average for my field. This person exemplified exactly the type of person that cheapens the value and worth of others in public perception and makes business owners question what they know in their hearts their value is.
The real lesson learned from this scenario is that business owners must do their homework. As a business owner, you need to know what your competitors charge for the SAME quality of work that you provide. Many business owners offer similar products and services, but there are differences, which make this comparison difficult at times. You must know how your product or service compares to others in your field, and you must know and understand the value you provide to clients. You must also understand the price range your clients are willing to pay for services such as yours.
Understanding your value is the beginning to understanding an appropriate price for your product or service. If your price is set too low, others will question your ability to provide quality service and you may be passed over for others whose prices are actually higher than yours because the perception will be they are worth more and know more. If your price is too high, you will miss your target customer because they will not be willing to pay that price for your product or service.
Pricing is a challenge for many business owners. Don't underpay yourself!