Learning your worth

Posted on February 7, 2012

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As an entrepreneur it can feel a little scary rising your prices, if you change your mindset it could seem a little easier. 

I’ve been lucky enough to have a mentor as a Mum. She has set-up and run several very successful businesses and is always there for me when I have an entrepreneurial question. She will often give her time no matter what and I am incredibly privileged to have this.

At the beginning of my business life I was concerned about charging anything over £10 per hour. Why? Because I was worried that no-one would use me. My Mum, other clients and a friend, Chris Bose, have all enabled me to see my pricing in a new light and I’d love to share their advice with you.

When you offer your services you are usually offering something that your clients either cannot do, don’t have time to do or cannot provide themselves. This means that you or your product are invaluable to them. If you are offering your services at a low rate then you are unintentionally making them think that your service is not worth more. You of course did not think that this is what you were doing. If you are like me you are concerned that if your prices are higher you will have fewer clients.

Now, think about your pricing in a new way. If you charge, say £15 per hour you will be eliminating the clients that I call “hard” clients – these are clients that expect an awful lot from you at a very low-cost. They will be using you for your price and will probably be questioning it regularly. These are not clients you wish to have. One of the fantastic pieces of advice I was given was that if I charge anything less than £60 per hour then I am not of the standard they would want to work with. To me this was incredible! It may sound the same to you. Think of the different style of client you will be having when you increase your price (perhaps not so dramatically as £10 – £60) I couldn’t bring myself to do that but I did gradually grow to £20 per hour. Clients that will spend this amount on you know that what you offer is invaluable to them, they know they need you and they are happy to pay the price. As I said before, you offer something they cannot or do not have the time to do.

 

The price you charge shows your clients how much you value your service so think about this carefully. What would you pay, say an IT consultant if you knew nothing about IT? Would you spend the lowest amount possible and then be surprised when you receive a low service? Or, would you pay a bit more to a fantastic consultant and receive an amazing service and have an incredible IT system?

Have you recently changed your pricing structure? How did it feel? Was it tough?

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Posted in: business