Are you facing confusion about how to price your services? It's a sticking point for many entrepreneurs; one that keeps them stressed and broke.
Last week my article topic for Inc.com was about the negative aspects of pricing your services by the hour. As far as I'm concerned, it’s a big no-no for coaches and most consultants. This article received thousands of views within the first 24 hours of going live. Obviously, it’s a hot topic and hits a sore spot for small business owners. So much so that this week I watched an excellent video by my friend and peer, Jeanine Blackwell, on a related topic: How to price your service when selling to corporate. In the video, Jeanine touches on the hourly fee topic and, as always, she lays it out in a way that will get you from point A to point B in no time.
One of the points in the video, as well as my Inc.com article, is on why hourly rates leave money on the table. Sometimes, lots of money! The article also shares a perspective that many entrepreneurs are unwilling to explore–that hourly rates for entrepreneurs are often tied to doubts about self-worth.
Excerpt from Inc.com article, Stop Charging an Hourly Rate–It's Reducing Your Profits and Your Self-Esteem:
Why don't you charge enough for your small business services?
Examine your belief about what you and your services are worth and how to price them accordingly. Even at 250 dollars an hour, you are leaving money on the table. Often, people who charge an hourly rate have doubts about their value. Placing an hourly value on yourself can add to low self-esteem. What's key to remember is that you are not selling YOU! Examine any such limiting beliefs and work with a professional to recognize the true value that you provide to your clients.
What is the value of your service?
Instead of comparing yourself to the competition, look into the life and business of your ideal client. What problem do you solve, and how does it make their life better? For instance, if a leads expert sends 200 additional qualified leads to their clients' websites each month, there is the potential of increasing the client's income exponentially. And, it goes even deeper than that. The client can now spend their time focusing on money-making activities rather than the stressful task of finding new business. Can you put a price tag on that?
About Jeanine Blackwell's awesome video:
Jeanine Blackwell further expresses the importance of positioning yourself, not as a commodity, but by the value the client places on getting their problem solved. An unspoken point in what Jeanine has to say is the importance of questions and listening. Many consultants try desperately to convince the prospect of their value, rather than letting the prospect come to that determination themselves. Watch Jeanine's video to see how it’s done.