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172 - Are You Struggling to Charge What You’re Worth?

This article is based on critical questions I’m often asked by clients, who are smart and savvy women entrepreneurs ready for change. 

From improving cash flow…. to increasing staff productivity…. to scaling for growth, these periods of transition — and so many more —  provide both challenges and opportunities. Managed effectively, change can become a productive force for growth. The Block Group harnesses that potential, bringing together the people, resources and ideas that build results.

Patty-W-Block-Small-2All the best! 

Patty Block

©The Block Group Inc. All rights reserved.

Building Solid Companies That Move Forward


What Is The Best Way to Determine Pricing?

Pricing is all about building value - or as Warren Buffett frames it: “Price is what you pay. Value is what you get.”

Many small business owners struggle to price their services and then sell these services with confidence.

As women, we often have an emotional response to money, especially when it comes to pricing.  Across the board, I find that women business owners are leaving money on the table. They are often driven by a deep-seated fear and price too low.  

How Do I Know?

These early warning signs are among the most common concerns we hear from women business owners we work with. How many of these resonate with you?

  • Do you hesitate to speak directly about your fees?
  • Do you find yourself apologizing for what you charge?
  • Do you offer discounts to people who didn’t ask for them?
  • Do you feel compelled to offer free services, to ‘sweeten the deal’?
  • Do you wonder if you’ve ‘paid your dues’ yet?
  • Do you find yourself locked at the low end of a price range?
  • Do you suffer so much stress around money you can’t focus on strategic issues – for your company or for your clients?

Ignoring these early warning signs leads to serious consequences and limits your ability to move your company forward, due to low and uneven revenue.

How Do I Fix This?

There are many things you can do to enhance profitability and gain control of your finances.  If you position your company as the solution and truly build value in the marketplace, you will feel confident that your pricing reflects the true value of your services.  

While this may feel overwhelming, by working with a business advisor, you have a guide to help you develop and implement the following pricing tactics:

1. Analyze Your Current Pricing.  

Do you decide what to charge on a client-by-client basis?  Are you ‘guessing’ what makes sense?  Do you have a list of standard services or are you ‘all things to all people’?

2. Standardize.

Create a list of standard services and then do some market research to identify comparable services in your region and industry.  There is a buyer for every price-point, so determine your target market and ideal client. Is your company the low-cost leader in your industry, or serving the luxury market?  Price accordingly, based on the value you bring to your ideal client.

3. Build Value.

You and your company have a reputation. Is it the reputation you’ve intentionally created?  Marshal your resources and invest time and funds in building a consistent, valuable message in the marketplace. Then ensure that every company activity - from service delivery to invoicing - reflects that message.

4. Develop a Communications Plan.

Determine the date you want the price increase to go into effect. Then determine the best method for communicating with your current clients.  Is it with a formal letter or a less formal e-mail?  Would it be better to call certain clients? Draft your letter or call script, keeping the message very positive and non-apologetic.  If you speak with a client, follow that up with a written summary of the price increase. 

5. Implement Your Price Increase.

It may take work not to fall into old habits of offering discounts and free services to make the sale. There is no need to do these things when you have built value in the marketplace and priced your services accordingly. 

Can You Give Me An Example?

I actually lobbied one client for three years before she was ready to raise prices. She was afraid that prospects would have ‘sticker shock’ and that she would lose clients.  She felt sure that her pricing was based on what the ‘market would bear’.  Does this sound familiar?

The turning point came when we prepared a cash flow forecast for the new year and it showed a break-even year.  She realized that she and her staff were working way too hard not to realize a profit!

By developing an intentional process to raise prices and delivering careful communication, there was absolutely no push-back.  She did not lose any clients, actually increased sales, and that new year was her most profitable in the history of the company.

In fact, 3 years later, we raised prices again and she was actually excited to do so!

Now What?

Warren Buffet is known as the “Oracle of Omaha” and is one of the wealthiest and most respected businessmen in the world.  His focus on value is apparent in all of his business decisions.  

You, too, can build value and be paid what you are worth.

Business Coach in Houston

Patty-W-Block-Small-2

All the best! 

Patty Block

©The Block Group Inc. All rights reserved.

Building Solid Companies That Move Forward

Building Blocks