Money Money Money it's the cause of so much frustration when trying to work out how much to charge when you are setting up a new business or a new service in your business. Everyone and their dog has an opinion which just adds to the confusion and you end up hopping around or just plain stuck as to whom to listen to.
The number of conversations I have around pricing, how much? how many? when? , what's it worth? are massive which is one of the reasons I give away my ‘ pricing Strategy Guide' for free, however in this post I'm going to give you a couple of the things you may want to consider when launching a new product or service for your small business or even if you have launched and up to now nobody has bought from you.
When you are looking into pricing a product or service you have to consider a few things to start with. The competition, your own skillset, what you perceive to be your skills (yes, this is different from the former for most of us), what your market will pay, your location, and a host of other variables. These will all lead you to an informed guess as to where to start with your pricing.
This might take a little detective work since a lot of coaches and service businesses are reluctant to publish their rates I have found however if you pay attention to their websites and social media, ask a few discreet questions, and get on their mailing list, you can figure it out pretty quickly. These types of business owners love to make offers via email, well who wouldn't its the best way to sell online so it makes sense. Build the relationship with interested subscribers then make an offer. The great thing for you is that you can very quickly find out what they offer and how much they charge all good info for you to make an industry-based comparison.
A word of advice though, be realistic about who, exactly, your competition is, Don’t undervalue or over-sell yourself. In other words, make sure you’re comparing yourself to someone who shares the same or similar skills, market, and track record, rather than simply looking at who you strive to become.
In some fields, this is easy. There are certifications and degrees obtained that allow you—by virtue of having achieved them—to charge a certain rate. If you’ve someone that's followed this path, then pricing will be easier for you. If not, take a solid look at what you can legitimately claim as a skill.
Look, too, at your track record. Have you proven yourself by helping former clients (and do you have the testimonials and case studies to show for it)? Have your former clients moved on to bigger and better coaches after working with you? (That’s a good thing!) These are all reasons to maybe consider a higher price range than you might have first thought.
When we first started out in marketing we were at the beginning of our coaching business, our rates looking back were very low, we constantly had people pushing us to raise our rates but for us, we wanted the proof, the results, and the experience to move us forward. We now charge much more backed up by a long history of successes from our clients and testimonials from everywhere. We grew as our rates grew which was a well-learned lesson for us and one we hold dear today, if we had gone straight out of the starting blocks charging top rates I'm pretty sure we wouldn't be trading today.
In the game of setting rates, it’s your market that has the final say. As any first-year economy student can tell you, the price of anything lies where what the buyer is willing to pay meets what the seller is willing to accept.
If your goal is to give newbies a helping hand and lead them down the path to success, that, unfortunately, means you can look forward to lower-paying clients. That’s not a bad thing—everyone has to begin somewhere—but it does need to be acknowledged. If, on the other hand, you’re target market is more established and is financially stable, then a higher fee isn’t just warranted—it’s a must. They will expect a higher price, and will not find value in the lowest-cost supplier of anything, whether it’s cheap coffee or business coaching.
Finally, don’t forget that pricing is never ever set in stone. It’s flexible. If you find you’re attracting the wrong market (or no market at all) you can always change your rates. Working too hard for not enough return? look at raising your prices.
It’s your business. You get to make the call on this.