Many people who start a small business struggle with the issue of pricing. If this is an issue for you then take comfort in knowing you are not alone. Most of the time it comes down to a battle for needing to gain clients and experience to sharpen your credibility and having to make enough money to justify the cost in time and resources the job requires.
Here are five tips for handling what to charge and how to give yourself a raise.
1_KNOW YOUR COMPETITION
This seems like a no-brainer but many solopreneurs overlook this fundamental part of venturing out on your own. Know what the very best in your business charge and know what the discount folks charge as well. This is one way to find the baseline pricing for what you do but not the only way. Do other market research. Be creative. Ask your social media friends to get insight. However you do it, come up with real numbers that you are confident the market is accustomed to paying for your services.
2_SET YOUR PRICE WITHOUT ANY EMOTION
How do you do that? Simple, you run the numbers from your market research, you find the pricing range for the top of your industry down to the bottom and settle on a number that makes perfect sense. Figure in the hours required of you, the cost of your marketing, the amount of time and energy you spend free of charge in landing your client (first time consults, gas to get to them, analysis of their needs and creating a proposal etc). There is a cost to landing each new client and then there is the cost to do the work necessary to provide them service.
3_ALWAYS ASK YOUR CLIENT ABOUT THEIR BUDGET
You’ve done your research and set your price but, especially as you try to establish yourself, there are times where you may adjust that price in order to close a deal. Make it a hard rule to always ask about budget. First, it puts you in a power position as a leader on the subject of money, giving the appearance that you are comfortable with the topic. That is very important but it also provides an opportunity for a teachable moment that will reinforce to them how valuable your services are. Of course finding out their budget also this gives you a chance to negotiate. However, most of your prospective clients will say a number higher than you assumed they would. This makes it easier to charge what you should and reinforces your own sense of self-worth. Always ask about budget. Always.
4_REFERRALS BUILD YOUR BUSINESS FASTER THAN ANYTHING ELSE
You ask about budget. You know what to charge. You need more clients. Ask for them. If you can’t bring yourself to ask existing clients for referrals then you are not an effective business owner. This is the easiest, fastest and most effective way to grow your business. You can’t be passive when asking. You must be able to ask with confidence and conviction. Practice your approach but be direct and adopt an attitude of expectation – meaning you expect them to refer new clients. This might be the most important thing you can do to build your business effectively and get paid what you deserve – ask for referrals. No exceptions. Every client gets asked multiple times.
5_KNOW YOUR PERFECT CLIENT
Your perfect client can afford you. Your perfect client knows other people who are likely to be perfect as well. Your perfect client appreciates your expertise and the services your provide. Your perfect client expects value but trusts you will provide it and is easy to communicate and deal with. Who is your perfect client? What personality traits do they have? Where are you likely to find them? Ask yourself every question you can think of regarding this dream client and define them in detail so that when they show up you know it immediately. These are the people to target and leverage into getting new business as you move forward.
These five things will make or break your business. Apply these rules today and watch your business thrive.
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