Are your prices right?

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Pricing, like sales, is one topic that business owners often get really uncomfortable talking about.

Are you charging enough? Are you making enough? Should we revisit that?

"UGH!! LARA!!! Leave me alone!"

As a business coach I don't have to leave them alone, because that's one of the reasons they want to work with me. ;)

Here are three things to think about when it comes to your pricing and whether or not it's time to make a change.

1) Are you making enough money?

When you look at how much money you're bringing home from your business (after paying your expenses, staff, saving for taxes, etc.), is the amount what you want to be bringing home? Is it meeting the minimum requirements you REALLY need? How far are you from having the amount of money you want/need to pay for the extra stuff that you'd like?

If you feel like you're working all the time and still not working enough hours (and therefore how could you ever make more money because you don't have any more time to give!) it may be time to look at your pricing. (It could also be time to look at your systems and where your time is going, but that's another conversation). :)

Do the math - how much more time do you have? How much are you making? Are you happy with that or does something have to change?

2) Are you remembering your non-billable hours?

When you own a business, not every hour you're working is something you're getting paid for. Networking, learning, updating your website, sales calls, blogging, marketing, etc. - those are all hours that you're not getting paid for.

If you think I have X hours available in a week and I want to make Y dollars and you figure out your hourly rate by dividing Y by X - you're going to have a problem.

Make sure that when you think about how much things need to cost for you to make the money you need, you're taking into account those non-billable hours.

Put it on paper - how many hours a week are you doing non-billable hours? Are you accounting for those when you think about how much time you have available to deliver services?

3) Are you charging what you would be charging if you didn't have to worry about what people think?

Some people really want to increase their rates but the fear of people telling them they're too expensive, getting mad at them, or deciding not to buy from them scares them so badly they never take action.

The fear of what might happen is impacting their bottom line.

Instead of worrying about the worst case scenario, let's think about how things could go well. Or how things have gone for other people...

I have had many clients increase their prices and even if a few people stopped buying from them at the new rate, the rate increase meant they were now working less and making more money.

I've had people increase their prices and not one single person made a comment or complained.

I've had people increase rates for new clients, but not for existing clients as a way to start phasing in increased pricing.

If you weren't worried about other people, would you change your pricing? What would that look like? What would it take to start making that a reality?

Take some time to answer all three of these questions and assess where you're at, where you want to be and what you should do to get there.

And if you want more help and support with that, I am hosting a two hour training on pricing that might be the right next step for you.

Take some time to look at your pricing so you can make what you need to be making instead of stressing about money (or lack thereof). That's not why you started this business and I want to make sure that's not what your reality is.

Small Business Resources: Let's Talk Prices

Figuring out what to charge for a product or service is one of those tasks that can be overwhelming.  Where do you start?  Do you charge $95, $97, $99 or $100?

We’ve come across quite a few different articles, posts and resources that talk about the psychology behind people’s buying habits that are really fascinating and that’s what we’re going to share with you in this month’s Small Business Resources.

Social Triggers

Derek Halpern has a lot of really great content when it comes to pricing, but this is one video that really struck us as helpful.  Check it out and then watch a few other videos by Halpern.  Lots of great insight.

Conversion XL

This is a LONG article, but it has a lot of really great information. It goes into all kinds of different pricing experiments and their outcomes.  

It brings up the same point the Derek Halpern does in the video above, as well as some other great information about people often not going with the cheapest option, about how pay what you wish pricing can work, the importance of anchoring.

( I’d love to hear if you try any of your own experiments or what you think would be worth trying in the comments!)

Do you have any great resources that have helped you figure out how to price your products?  Leave a comment and share them with us!