Does putting a price tag on your time, your craft, your art feel draining? Maybe you’re asking the question, how should I even decide how to price my services! Just tell me the formula! There are awesome experts on the topic of pricing like Kristin Kaplan who is great at topic about this subject.
Here, we’re discussing the roadblocks you might be experiencing (because I’ve been there too). If you don’t know me, my career as a coach started as a social worker. I came into the business coaching business and my former wedding planning business with only the experience of working for others and making an hourly wage or a salary. My social work training was focused on mental health, on community engagement, on social justice and I entered the business world with the mindset of what I call, “will work for change,” please note the double entendre.
How on earth was I supposed to make a living with the guilt of earning money? The mentality that capitalism is bad? Perhaps you too believe, like I believed, that I would be “taking people’s hard earned money” if I charged for my services appropriately.
I also believed the things I loved to do, like planning events, and coaching creatives, helping them through their issues, problem solving other people’s businesses came so easy to me, I believed that others could do the same too and it wasn’t really “worth” hiring somebody like me. I was happy to do it for other people for free or at a very low cost.
Let’s first tackle your money mindset. If you’re having trouble figuring out your pricing, stating it confidently and being sure of what your skills and time are worth, it’s probably one of two things — money mindset or you don’t understand what your business costs to run.
There are money mindset experts like Denise Duffield-Thomas and Danetha Doe who speak more extensively about how our mindset holds us back from being able to charge and earn the limitless amount of money. It’s something that as I grow in my business, I’m constantly working on to up-level.
I watched this video about how men sell vs. how women sell when I was first introduced to Denise Duffield-Thomas and kept thinking, “oh my gosh, that’s me!” Essentially, what she’s saying in the video is that stereotypically, men have an easier time stating the value of a product without a lot of emotional attachment, whereas women struggle with setting a price and stating the price out loud (without shortchanging themselves) for fear of being rejected. This isn’t to say that men don’t have money mindset issues, she’s just making the point that there are different ways of talking about money in your business.
Ask yourself these questions:
What hangups do I have around making money?
Do I equate money to either “good” or “bad”?
What did I learn about money growing up?
Do I believe that I’m not “allowed” to make more money than I’ve earned before?
What do I believe about money? What stories are buried in your mind about making money, having money, spending money?
Does it feel icky to talk about money?
Remember, that your services, products, time are valuable. That by giving your services to somebody, you should be allowing them to gain something they didn’t have before. Money is the tool that allows for there to be an exchange with your time/service/product.
As Kendrick Shope says, “selling is helping.” We love to help one another, that’s why the “community over competition” movement is a thing, right? So how can you help your clients in exchange for money?
Value of your Work
Whenever you price your service or product, think about the ultimate value you’re creating for somebody. What is the benefit of working with you? What does a client gain from choosing to be under your care? What result does the client gain from purchasing your product?
Think about these scenarios and how it might pertain to you:
If you’re a birth photographer, you’re able to capture the essence of the birth story. In a way that a non-pro can’t capture, you tell the story unintrusively. At the end, the family gets to have beautiful photos of a day that changed their lives.
If you’re an educator, your services help clients to learn something quickly, saving them time, energy because they don’t have to fall down the rabbit hole of googling ALL. THE. THINGS.
If you’re looking around at “your competition” to figure out how to price, you could be making a horrible mistake. While having some market knowledge is helpful, your business looks nothing like your competition’s and the number that they’re displaying on their website really shouldn’t dictate what you can or can’t charge.
Here are some things to consider about your competition.
They might be full time in their business and you might be part time.
They might not have the kind of training you have (which you should definitely use in your brand story).
They might be shifting their focus to a different project and want to take on fewer/more clients than you.
They might have other life + biz expenses that you don’t have.
The bottom line here is that you should try to keep your eyes on your own paper when it comes to pricing. Knowing a ballpark figure is helpful in terms of pricing, but it is not the end all be all of how you should price your services and products.
Making a Living
Have you worked through the money to know how much you’d need to make in order for you to be able to afford all the things you are responsible for paying? I’d recommend you sit down to do the Survive and Thrive Budget worksheet. When you have no clue what you need to make, pricing and charging money can feel extremely nebulous and unattainable.
If you’re a service based business, you probably only need a handful of clients in a month. It’s not thousands and thousands of people you actually need to get in front of in order to make the living you want to make!
Cost out all your expenses, figure out how much you want/need to make and then set your prices. If after you do all that math, it feels way to scary to charge that number, ask yourself the question, go back up to the money mindset section or skip below to the “giving things away” section.
Remember that if you’re in a business that is seasonal (you have a high season and a slow season), you need to price your services knowing that you have to be able to cover expenses during the times when checks aren’t coming into your bank account.
It doesn’t matter if you’re doing this on the side of a full time job or as your full time gig. If you own a business, take it seriously. If you don’t nobody else will take your business seriously. If you’re not making money, you just have a very expensive hobby.
Giving Things Away
At the beginning, we get into business giving our services away. It’s a way to develop our skill set, our courage, our system, a more robust portfolio. Whether you believe that you should start for free or whether you should charge something, you’re right. There’s no “correct” way to do it and I think the jury is still out about what the “experts” would tell you to do.
I would advocate for being confident in your service offering and not giving too much away for free. I’ve done a few pro bono relationships with clients to figure out what I liked, how I liked to work with people and what I liked to coach on. I gained confidence by doing those and now feel super confident charging premium prices on my services. With those initial free and low-cost clients I worked with, I still offered a tremendous amount of value, made raving fans of them and made it easy for them to refer me!
Maybe you did the survive and thrive budget worksheet and you’re thinking that the “real price” of what your services should cost still feels so intimidating, I would say, that’s okay!
One method I recommend for building confidence and portfolio is what I call the stairway method. While every business is different and this system might not work but I’ve helped clients who were photographers, calligraphers, social media strategists, graphic designers, wedding planners, and product based businesses do this so, I am pretty confident you can make it work for you as well!
You know your current prices (even if it’s free). You figure out your ideal prices.
You decide how many clients you want in a calendar year.
Start where you are now and after a certain number (decide ahead of time), you’ll raise your prices.
The tip to raising your prices frequently is that you don’t have to announce it every time you raise your prices; rather it’s like playing a game with yourself. People who book sooner will have the opportunity to work with you at a lower cost.
As you gain more clients and confidence, you can book people at a little bit of a higher price. (For example, you can book your first 5 clients at a little higher price than where you are currently. After those 5 slots are taken, you can raise your prices $500 for 3 more clients. Then after those three are taken, you can raise your prices another $500. So on so forth). It gives you incentive to book clients and it makes it a fun process.
Know that pricing is a static process. Selling is actually helping. There’s not an “I’ve arrived” moment, and you’ll have to keep adjusting your goals to get you to where you want to see your business mature. If you have questions, feel free to reach out to me on Instagram at @reinaandcompany.