Are you charging enough for your services and products?
You may think that you are. But your low fees could be one of biggest obstacles facing your business.
If your prices are too low you will end up in a vicious cycle, because you can't afford to advertise or invest in your business. Sadly, many potentially successful businesses fall by the wayside simply because they're not charging enough. Don't let this happen to you.
The topic of fees is an emotional one for many people. I learned this a few years ago when I brought out a teleseminar/e-book package called "How to Charge What You're Worth and Get the Fees You Deserve."
After I launched the package, I got a lot of emails from people. They said things like, "I don't charge a lot, but I live in a low-income area, so this is why I have to do it this way." Or, "I don't think it's right that you charge a lot of money." What I found really interesting was that people felt the need to justify their low fees. And that by daring to suggest that they put their prices up, I was venturing into dangerous territory.
Now at the other extreme, there are people who say, "I'm charging a great fee. I charge $1,500 a day," - or $2,500 or even $5,000 a day. Well that's great. Or is it? Because people can have a high daily rate, yet still be receiving a low hourly pay.
For most solo businesses, if you take the amount that you're earning, then factor in all the hours that you work before and after getting the client - that is your true income. Consider everything that goes into landing a client: all the time spent in preparation, meetings, delivering the service and follow-up. Now take out all the costs of running the business. How much are you really earning per hour?
Most of us have what I call a financial set point. This is the amount that we feel comfortable earning, the number that we gravitate toward. I've observed this in myself. When I was getting established in freelance sales training, I charged $500 a day for cold calling training for a company.
Then a sales trainer hired me to work on a special project. But he wasn't charging $500 a day for my sales training services. He was charging $1,500 a day. That experience really opened my eyes. Clearly what I was delivering had not changed at all, but the perception of its value had shifted an awful lot.
That sales trainer saw that what I was offering was worth that higher amount. He had the courage to ask for that well before I did. And the client was willing to pay it.
This experience proved to me that people were willing to pay this amount to have me as a trainer. I realized that I was undercharging. And I now had more confidence to charge more. So I did. I raised my prices. But for a couple of months afterwards, even though on the surface, it appeared that I was earning $1,500 per day, I found a way to turn that one day's work into three days' work on almost every project!
I would do all sorts of extra preparation I had not been asked for. I would volunteer to do extra follow-ups that had not been requested without any pay. My fees had changed. But my financial set point, my internal measure for what I deserve to be earning, had not shifted.
It's important that you are aware of this set point right from the outset. Because if you're not, you may raise your income but also raise your workload accordingly.
Once you recognize your financial set point and free yourself from limiting your income, you will make more money by working less.
