3 Missing Pieces in Your Pricing
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Charge your worth. Because doing anything less doesn’t even make sense.”
Are you embracing the Boss Lady that you truly are or are you playing small and running a hobby with a fancy name? Maybe you’ve just started a business, AMAZING! Or maybe you’ve been running your business for a while and you’ve experienced some financial success. Super amazing! Let me ask you, have you experienced that little flutter in your stomach when you make a sale? From personal experience, it is THE BEST FEELING. So what’s going to make sure you feel that little flutter of internal joy every time you finalize a sale or sign a new contract and most importantly for the long run? Making sure you are running your business like an actual business by setting your prices in alignment with your worth.
Whether you have an established business you are looking to grow and scale or you’re just starting out, there are going to be gaps that get overlooked when it comes to your pricing. By not including these essential factors into your price, you’re underselling not only your business but yourself as well.
Here are three gaps in your pricing that will allow you to charge your worth, create a thriving business and build a big abundant bank account!
TIME
Two hours brainstorming, 3 hours designing, 1 hour spent in emails back and forth, 2 hours for the client session; total amount billed: 2 hours! Because you were only in front of the client during that time, the rest of your hard working hours and time doesn’t count, right? Wrong! Your worth actually falls into the “priceless” category. Almost sounds like those old credit card commercials, right?
If you see nothing wrong with this equation, you’re grossly undercharging your worth. Here’s another example: a friend of mine is an artist, when commissioned for artwork, she charges based on the material cost x 20%. But what about the 4 hours spent creating the artwork? Why shouldn’t she be getting paid for that - truth is that she should be, but it’s up to her to include that in her rates. Just like it’s up to you to charge for ALL your precious time.
When charging for time, we often only take into consideration the facing time, meaning the time spent dealing directly with the client or the cost of the product itself instead of the time spent in creating or sourcing it. However, you also have to take into consideration all of the preparation and planning time that is involved as well as any wrap up and conclusion work.
Tip: Track how much time you spend on a client (beginning to end, including all preparation and wrap up work). Take how much your client pays you and divide it by the total number of hours you calculated. This is your current hourly rate. If that makes you scream, it’s time to up those prices and start charging what you are truly worth and building your bank account. You didn’t start a business to be broke so stop charging broke prices. Here are some examples of time spent that is overlooked in pricing:
Designing Time
Planning & Preparation Time
Briefing Meetings
Debriefing Meetings / Summary or conclusion emails
Admin Tasks
Practice Time
Travel Time
Time spent away from family (yes - this also has value!)
VALUE/BENEFIT OF YOUR WORK
Do you often get told “oh you just do that so easily.” or “OMG that comes so naturally to you, I could never…” And what’s your initial reaction? To respond with, “oh it’s nothing really”. But you’re wrong; it’s actually everything. Just because it’s easy for you does not mean it’s easy for everyone else. You have to consider what value you are giving to your customer in addition to what you’re providing them. Is it going to save them time, money or energy? Maybe it will allow them to increase their income or sales. Will it enhance their life in the future? Allow them to have healthier relationships? This also applies to content if you are a Content Creator. Think about how this content will change the audience’s life past the day that they first see or interact with it.
Tip: Consider how your product or service will change your client’s life. That change has value. How is your client going to benefit from what they are getting from you? And for how long?
CREDENTIALS & EXPERIENCE:
Newsflash: Your time and investment into yourself are worth something, actually a whole lot of something. The time and money you invested into your education, learning and training is time and money that your client did NOT have to spend. So you have already saved them hundreds of dollars and hours. Don’t discount this when setting your prices. Also, stop thinking credentials are just based on things like what certification, designation or letters you have after your name. Credentials can and do include being self-taught. Do not let society’s opinion of prerequisites stand in your way. Those are just blocks and we don’t need them blocking your bank account.
More experience equates to more knowledge and THAT has value, not the opposite. Maybe in the past it took you hours to provide a service and now you can do it in half the time or even with your eyes closed! Do not use the excuse of “It only takes me a minute so I shouldn’t charge too much.” Let me say it again - you just saved your client hundreds of dollars and hours because they didn’t have to go through all that you went through to provide the level of service that you do.
Tip: Your credentials and experience can work together or separately. Maybe you decide to price yourself initially based on your credentials but once you gain the experience, you can combine both to increase your price.
Based on the three factors of time, value of your work and your experience & credentials, how have you determined your pricing right now? Does it perfectly align with the powerful CEO you want to be or are there gaps you haven’t thought of or considered? The time spent in any capacity towards what your client receives is time that needs to be accounted for. That also applies to the short and long term benefits of your work and the experience you bring to your clients. All of these are factors that need to be included in your current pricing and then adjusted accordingly as your business grows to make sure it continues to grow.
JOURNAL PROMPT:
Identify and work through any gaps in your pricing related to the three topics discussed above. Adjust your prices and start charging your worth.
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