How do I price my products or services?
Did you know that more women then ever are taking the plunge into small business yet less than half are making money? If you are like the majority of female entrepreneurs chances you are you are not charging enough for your products or services.
The price of your product or service should not be based on the product or service itself, it’s about charging what you are worth.
It’s time for us women to stop undervaluing ourselves, break our subconscious blocks and mindsets and start charging according to our effort, skill and talent.
Not only will undercharging your product or service affect you financially it will also affect your business reputation as a whole. People may think you don’t know what you are doing or you are unskilled and an amateur in your field.
So why do we undercharge? Chances are it’s insecurity.
When you are starting out it’s totally normal to question yourself and the value of your product or service. More often than not it comes down to a lack of confidence.
When considering charging more for your time, have you found yourself saying the following –
‘I’m having enough trouble finding clients as is.’
‘Money is tight for everyone, l don’t want to make it difficult for my clients.’
‘What if l lose customers?’
These excuses are destructive and you need to rid yourself of them. You need to believe in your product or service so you can feel comfortable charging what you are worth.
Here are 5 steps to help you shape your pricing system.
- Do the Math
Answer these questions
- How much money are you making per hour or per product?
- Is it above minimum wage?
- How many times do you do extra work for a client out of business hours for free?
- Why are you charging your product or service the way you have?
- When was the last time you compared your pricing to competitors and market value?
- How many hours am l working a week?
- Am l still scrambling to make ends meet?
- What is my net profit per client or product?
- How many hours do l plan to spend working for this client?
- What is my product providing for my client?
We may be undercharging because we haven’t taken the time to identify the outcomes or results that arise from our product or service and the values associated with those outcomes.
If you are doing work for client, have you assessed what the financial outcomes will be for the client? Are you charging accordingly? If you are making quality products that are being sold online, have you considered the lifespan of your product? How much it may be worth over the life of the product and are you charging accordingly?
- Identify your difference
You need to identify what ‘edge’ your product or service has over your competitors so you can justify your price to your customers, but also yourself.
Have you had years of experience or a formal qualification that makes you an expert in your field? Is your product unique or one of a kind?
Do you have exceptional customer service? Whatever it is, identify it and aim to over deliver on all fronts.
- Get some help
As you are reading this, you are already making positive steps! Have a search on our website for other tips for small business and female entrepreneurs about how to develop your small business. Another tool to utilise is delegation.
Identify what you do fantastically and keep doing it. This means you may have to delegate other tasks such as bookkeeping or banking to other people who are skilled in that area.
- Practise & develop boundaries
Once you have established your fee or price, start practising. Pretend to be on the phone and rehearse being in a conversation with your client and stating your fee. If you find this daunting, why not practise stating a huge number that is five times more than your new fee. This way when you state your real fee it will not feel as overwhelming and frightening. Practise saying ‘no’ to outlandish requests for your product and service. Know what you are worth and don’t accept anything less than that.
In small business you get paid for what you produce and the focus is purely on you. This realisation can be anxiety inducing or it can lead to you charging ahead and being the captain of your own ship.
There are plenty of people who are willing to pay what you are worth. Just as there are plenty of people always willing to undercut yourself on price. Don’t go after customers who don’t recognise your value – don’t settle.