I’ve been talking with a lot of business owners recently who are either brand new to their business, or reinventing. They are making one of the most important decisions they make – how to price themselves.
People often have questions about whether they should offer lower pricing while they “earn their stripes.” As I’ve been working people through this, I thought I’d share my perspective with you.
First, here are a few tips on pricing in general.
- Even if you are new to your business, there are things you know from your other life experiences, and things you’ve come to believe in, that have huge value. Even if you are a lifelong learner, like most Aligned Entrepreneurs, you can package your current state of evolution for big dollars, AND continue to learn. (And charging more will help you fund your learning!)
- Defining your process will help your clients to see your value. Teaching them what you know while you work them has huge value. I worked with an amazing event production team for my recent event. One of the biggest reasons I hired them is because I knew I would learn so much from watching them work as they have worked with many people before me. I recently helped a photographer developed offerings. While she was just launching her business, her knowledge of a specific industry and the specialized needs allowed her to create added value from the beginning, as she built the sharing of that knowledge into her process.
- Price based on the life that is calling to you. I coach people to get crystal clear about the lifestyle they want and what that will cost them. (I learned this from my first mentor and it has never steered me wrong). Don’t think about the life you think you someday want with millions in the bank so you never have to worry about money. (For some of you that’s what you want now but for most your true desire is closer in). Calculate the cost of what you actually want… that which will make a marked difference in your life that you connect with emotionally. Using that monthly number, divide it by the number clients you want to work with on a monthly basis, and this is how you set your rate.
- E.g. you want to earn $20,000 /month and you want to work with 15 clients per month, then your pricing would be $1333 per client per month.
Now the question that generally comes up for someone who is just starting out is, “How can I charge that much right now?”
So, a few things about charging what you’re worth out of the gate.
- Where the desire is present, the way to fulfill it is also present. This is based on Universal Law. You wouldn’t be shown the desire for something right now if it weren’t available to you right now. If the $20,000 is a true desire that is in alignment for you, that rate is also in alignment for you.
- Design your packages to command that rate… determine what you have and know and give that can deliver that level of value and then some… even if you’re not 100% certain about your ability to deliver it. Trust your ideas about what is valuable and put them into action.
- Often you’ll need someone outside of yourself to help you see your natural value. Don’t ask your prospects because they will always want to pay less, even when it serves them to pay more.
- Start with the rate you calculated, even if it feels like a lot. It’s easier to become the person who can sell at that rate than it is to get accustomed to something lower and then raise your pricing.
The Introductory Rate
So sometimes it takes time to get your courage up to match your true value, or you want to get some experience and some testimonials or portfolio pieces. I’m a fan of that because you will LEARN so much from your first clients. But I’m not a fan of underpricing. I recommend deciding exactly how many clients you want to bring in quickly to ‘learn from.’
Don’t lower the price of your package, but instead offer a limited number at an extreme discount. Let them know the true value, and that you are offering this rate for the first 5 clients (or whatever number you set). Then stick to your plan.
Clarity is attractive. Charging too little out of fear is not. Having a clear, pre-defined plan for what you will charge and exactly when you raise your rate and to what is powerful way to approach the initial pricing dilemma. When you know where you are going the details of how you get there are just details.
What’s your experience with pricing? Would love to hear your comments below.