Undercharging can be a serious problem for a small business owner. When you are deciding how to price and package your services, often it is useful to get some outside advice. I find that many people get stuck on this by themselves. What often happens is that people price themselves too low.
My question to you is: Are you undercharging?
Getting the best pricing structure for your business can be a tricky and uncertain business. It is not an exact science and can often be an ongoing challenge as we put our rates up (or not!) over the years.
If you undercharge it will lead to two main problems:
1. People will often undervalue and think less of what you offer
2. You’ll make less money than you could have done for the same amount of time and effort Here are
Three signs that you may be pricing yourself too low:
1. You are working a lot of hours for the amount you are making
When I speak with business owners I’m sometimes shocked at how many hours they are putting in. They often say that their income doesn’t represent the amount of time, energy and resources they are spending.
The problem is that we only have a finite amount of time and if you want more clients, you need to have the time spare in your diary to serve them.
2. You are comparing your prices with others and then undercutting their fees
Whilst there is nothing wrong in doing some research, the difficulty is that if you price yourself by comparing to others, you are often setting yourself up as a commodity, say like baked beans where people buy on price.
A much better strategy is to encourage people to think of you as offering a unique service and the “go to” person in your field – this makes them less price sensitive.
3. You are giving your time away for free
If you are giving your time for free, or doing swaps, chances are you are undervaluing what you offer. If you do give your time away, you need to be very strategic in knowing EXACTLY how it is going to feed into your paid for services.
Giving your time for nothing and hoping it is going to turn into paid business when someone magically realises your value is not an exact strategy!
If you’d like me to help you with your marketing plan and pricing you may be interested in the VIP Marketing Day. To see the content of the day go to Marketing VIP Day