Putting a Price on Talent: Understanding Your Worth and Setting the Right Fee
Small businesses have many advantages over their more corporate counterparts. They can make quick decisions (often turning on a dime) and are less burdened by the costs of big business (big payrolls, big offices, big … well, you get the picture).
But just because the costs of doing business can be cheaper for a small operator, it doesn’t mean small business operators have to offer discounts to win new clients.
Note: When a client is offered a discounted rate, this becomes your business’s going rate. Getting clients who have previously been offered a discount to pay full market value will be virtually impossible because they now know how low you are willing to go.
Know Your Worth
I’ve worked with numerous small business owners who have failed to understand their true worth.
Some insist they would rather be busy than chasing more expensive work. Others simply doubt their value and are scared to charge their clients a “going rate.”
While both approaches to business limit your opportunity, they also risk tarnishing your business as “cheap” and attracting the wrong kind of client.
The Wrong Kind of Client
Too many small business owners become busy fools at the beck and call of clients who don’t want to pay a decent rate for the service they require.
You would think that any paying client is a good client, but you’d be wrong. Clients attracted by cheap rates often don’t appreciate your work and can (and will) be more demanding of your time, often asking for little jobs to be done as favors or with the promise of more work in the future (that may or may not come).
A Premium Service
There are many advantages a small business can offer its clients that really should demand a premium.
A personal service (where a client has a direct line to call 24/7) would not come cheap with a big business. So why sell yourself cheap and work yourself into the ground for minimum pay?
Note: It’s also worth remembering that many quality clients might view a cheap rate as an indicator of the quality of your service. Could your cut price deals actually be discouraging good prospects off your business?
Start Charging What You’re Worth
Increasing your prices can be a daunting prospect for a small business owner full of self-doubt, but just think about it.
If cheap rates attract cheap clients, surely a decent rate would attract a more decent crowd (or certainly clients who won’t think about taking advantage).
Remember: A higher starting price gives you room to negotiate, whereas starting with a bargain-basement deal will simply dig a deeper hole.
So stop being a busy fool and increase your prices. It might surprise you.
How has your business grown by adopting a more sensible pricing strategy? Share your comments below:
This post first appeared on the iContact Email Marketing Blog.