A member recently shared a great article by Kathy Caprino of Forbes…
In the article, she shared that she speaks with people every day who offer great products and services, but they are failing to make any money. There are many factors that lead to insufficient revenue, but it’s normally their own mindsets that are holding them back.
Boy, does that sound familiar! For example, I see members and prospects who stay stuck in a cycle of undercharging for their work. They are scared to budge, no matter how many people tell them that they’re not charging enough…
“Some of you don’t make near what you want in your business, because it’s not really a business, it’s a job, and not very good one either.”
I know I may have offended some of you, but if you were working for someone else for the hours you work at the pay you get, you’d say something would have to change, right?
I have listed some of the most popular excuses for not charging what you deserve. Do you use any of these?
1. “I’m having trouble getting work now. I would never get work at a higher price.”
2. “I really don’t know what I am worth or what I can get.”
3. “I’m scared! What if they won’t pay that?”
4. “Times are tough! I don’t want to make it hard on my customers to pay me!”
I hear what you say about charging more, but do you really mean it? Normally the reasons go a little more like this:
You are not really sure about the value you’re bringing…
People who undercharge also tend to work very long hours. The drive to work like this often is from lack of confidence that what they deliver is really good enough. They might think they’re not good enough to help the client in the allotted amount of time.
A lack of understanding the key outcomes you deliver…
Another reason why people don’t charge what they deserve is that they haven’t taken the time or effort to track the key outcomes they offer. They also don’t know how they set themselves apart from their competition. Do you know what you bring to the table that your top 30 competitors don’t? If you know, are you promoting those differences wherever you go?
A failure to realize that low prices also attract problem customers…
Your prices reflect your value and expertise. If you undercharge, what kind of message does that send? Do you really want to attract only customers who will pay bottom dollar? Thinking you’ll get more great clients and customers this way, you’re missing a critical point – people who underpay will make you crazy. They will nickel and dime you and second-guess you.
Mistaking pricing as the most important driver in their business…
People who undercharge typically don’t know how to market their work or generate more business, and rely only on word-of-mouth. When you rely solely on word-of-mouth, then the circle of customers you have will only be those who won’t want to pay enough.
Vagueness about the numbers…
You need to have a tight handle on how and where the money is coming in and going out. So many small business owners are clueless about the cost of doing business and what they’re truly earning. Don’t make that mistake. Take control of your business so you can improve it.
What to do differently?
Take these five steps:
- Identify the process of how you work and what you bring to the table. Do an analysis and figure how you’re different, and better, than the competition. If you’re not better than the competition, take some steps to become stronger and more effective in what you do.
- Stop relying on word-of-mouth as the only way to generate business. Start marketing and promoting your business in ways that will expand your circle of influence. (Yes, you can do this, and it doesn’t have to break the bank.)
- Overcome your own personal blocks to attracting and earning great money. Become more excited about earning what you deserve.
- Develop boundaries. It’s okay to say no to outlandish requests of your time and effort. Know what your time is worth.
- Start charging more today. Just do it. Then figure out what the right number is within the next few months, and start charging it. You can transition your existing clients to your higher fees in a more gradual way, but new customers and clients need to pay you more, starting now. (As long as the value is there.)
In the end, if you’re not charging enough, there’s something holding you back from believing in what you deliver, and asking for what you deserve. Take a step today towards overcoming these obstacles. Your business will grow when you do, and you’ll finally be able to love your work rather than drown in it.