This morning I stumbled upon a video of a famous blogger giving a careers speech at her university. This lady has earned multiple millions from her blog since she started it just a few years ago, and I enjoy following her business progress.
In the speech, she mentioned she now charges over $20,000 per blog post to feature a brand’s clothing. In the past I did some digging on this lady’s business and came across a critical forum, where everyone was up in arms about how “easy” her life was and how disgusting it is for her to earn so much money for so little work.
This guilt around charging is a common theme for my clients too when they start their businesses. Maybe you also have the same apprehension?
After watching that video, I wanted to share the Living Rosy take on how to price your services...
Understand Value vs Price
In essence, the philosophy is to focus on the value you provide rather than what you earn per hour. It’s just good customer service: focus on what your customer is getting out of your work together; not what you are earning.
When you focus on the value you offer, you also can see all the benefits your clients will receive from your work, which will make it easier for you to market your product or service, find more clients, and therefore help more people.
Shift Your Mindset
Next up, check in with your mindset. When choosing a price, don’t make it a moral dilemma on what you’re charging your clients. As long as you are giving more value than the cost they pay for, they will be happy. Don’t make it about “ripping people off” - again, you’re focusing on the wrong thing. Direct your attention instead to how you can improve your service and your value, not how you should detract from it.
Finally, explore your own stories around money and earning. Do you place a moral value on hard work? Is there a subconscious belief system at play which makes you need to put in the hours for every penny you earn? If that’s the case, it’s going to be very hard for you to scale your business, grow a team, create passive income or even just raise your rates. Changing these belief systems is a vital part of becoming an entrepreneur - that's why mindset work is such a focus in my business mentoring programmes. Otherwise, you end up just recreating a full time job for yourself.
Keep the Equilibrium
Ultimately: you can charge whatever you think you are worth. As an entrepreneur, you always have the ability to set your own rates, and change them as often as you wish to.
If you charge too much, you will be uncomfortable with the rate and will either subconsciously sabotage sales, or clients will decline to work with you because they’ll feel the energy is off.
If you charge too little, eventually you’ll be giving out too much for too little in return, and you’ll start to exhaust yourself. You’ll have to take on too many clients, work too hard, spend too much time chasing sales, or have too many delinquent or difficult clients. Upping your rates will normally not only weed out the energetic time wasters, but also allow you to work with fewer clients and therefore have a smoother business operation.
My Simple 3-Step Pricing System:
Answer these questions to get a better understanding of your services and the value you offer.
1. What PROBLEM does your client have?
- how is this issue impacting them?
- are they losing money, time, health or anything else?
- what are they missing out on because of this problem?
2. What RESULT are you offering from your services?
- what is this this result (or getting rid of their problem) worth to your client?
- how does this change their life, health, happiness, career, finances etc etc?
- what are they saving, earning, or enjoying more than before?
3. What does your SOLUTION involve?
- how much of your time or other resources does your work involve?
- what restrictions do you have on your resources, e.g. how many client hours can you have per week?
- how much does it cost you to market your product?
When you can answer these questions, you are in a position to see how much your product or service is worth to your clients. What value are they getting from working with you? Also - how many units you are able to sell within your own restrictions? Can you be profitable with those volumes at your current price point or do you need to raise it?
How do you feel about your current prices, or the prices you intend to charge when you get your business going? Leave me a comment and let me know!
If you want to know more about the financial side of business, you'll love my free video series Entrepreneur Money Secrets. In these videos, I discuss lots of important considerations for new entrepreneurs, such as:
- how much you can earn as an entrepreneur
- when you should consider quitting your job
- financial sacrifices you might need to make
- how to set premium pricing
- the costs of starting a business