On this episode of The Bold Money Revolution Podcast, we discuss why you don’t need to be worthy to charge more. This might rustle a few feathers and make people uncomfortable, but that’s OK. Let’s dive into the math and look at real-life examples to help you understand.
Why We Do Math Before Mindset
Mindset is very important. Trust me, I have my graduate degree in psychology, so I understand and value the mindset. Because of this expertise, I want to tell you that it’s important to do the math first. I don’t want you to believe what I believe, and I want you to believe your own things. Beliefs serve a purpose in the time we believe them, and they can protect us at that moment, but they can be limiting.
You get to hold on to whatever beliefs you want to hold on to. You get to discard whatever beliefs you want to discard. Pricing is emotional, which is OK, but you should check and see if you can discharge some of that emotion with some math.
I’m coming from the point that you’re already worthy. If you want to fight for your unworthiness, that’s on you. That’s not what I believe. So, let’s get into the reasons to put math before mindset.
#1 – You Are Not Your Service
Many solopreneurs get really mixed up in this, especially coaches. It’s the reason I don’t love personal branding. You are not your service. You have a separate identity, and your business is its own entity. The more you can pull the two apart, the better.
With me, you are buying The Bold Profit Academy, not me. I am not for sale, and I am not to be bought. You are purchasing a service that I deliver. It’s important to separate your identity from the entity of the business.
#2 – Setting Goals is Important
As a person, you don’t need to set any goals. You can live your life without structure. But when you have a business, goals are important. Businesses will not survive without a plan and goals to work towards. It’s another example of how we need to separate our identity and the entity.
#3 – Charge For Your Results
When thinking about your business, you need to be charging for the results you’re helping your client achieve. You are not charging for you as a person. You might be going through challenges in life, but you’ll still be able to get results for your clients. We will dive into an example of this later, but it’s really important to consider how much return your clients will get on their investment when you do the math.
#4 – Businesses Must Make Money
When running a business, you don’t have to be a perfect person. You don’t need to know everything. You just need to know your thing and be an expert in your specialty. And you need to charge an amount that allows you to run your business and make a profit.
Businesses cost money to run. All those ads that tell people they can start a business with no money down are lying. You will spend more money on your business when things are just starting. Things cost money. You need to set your pricing to accurately reflect your skills, ability, and time.
Let’s Look at What it Looks Like to Charge $1,000/Hour
It does not matter if you charge a certain amount of dollars per hour. You need to put in the work to figure out what work goes into your product and charge accurately. Let’s look at a one-hour session with me. When people ask me, I give them a price of $1,000. But something felt off for me. I decided to do an exercise that I’m going to share with you to help you understand how I do the math.
First, let me share with you some of the things I have accomplished in an hour with someone who has hired me.
Example 1 – P&L Review
One client spent an hour with me reviewing their P&L. The business was $350,000 in the negative and needed to find $350,000 in cash flow. I helped point out three different places to pull in that money and acknowledged the difficult conversations that were going to happen. We talked through the challenges of having those talks.
90 days later, they called, and said, “Okay, 90 days ago, I had like $30,000 in a savings account, and I was really freaking out because I was losing $350,000. I could have gone bankrupt. Based on the conversation we had, I now have around four times as much money saved.”
Even if it was double the amount of money saved and they went to $60,000, and they had the tough conversations and found the $350,000, that’s a huge ROI for just $1,000 for a one-hour session.
Example 2 – Finding Leads
This example was a client that booked an emergency call with me. They had blown through all of their money on a high-ticket mastermind and they were drinking the Kool-aid. It took the moment that they couldn’t afford to pay this coach and were advised to get an unsecured loan to bridge the gap until they could manifest the money to open their eyes that something was wrong.
There was no money coming into the business and they were ready to go back to working for someone else. I spent an hour on a call with them. The information and specific actions I gave them to start generating leads helped in a huge way. They sent an email I structured for them and it had a 58.67% open rate and ended up with calls on the schedule. That’s nine hot leads and five of them are already scheduled. I only charged $1,000 for the call, but they followed a simple sales plan and generated more than $60,000 in revenue.
Bump It Up to $1,500/Hour and See Where the Money Goes
If I can help you draw a single picture to clarify things in your business and it changes the entire trajectory of your business for years to come, should that only cost $1,000? I’m not really pricing that properly, right? I’ve currently raised it to $1,500. It’s going to be going up from here. Let’s talk about where that $1,500 is going.
If you think I’m taking that $1,500 straight into my pocket, you’d be misled. Let me tell you where it’s going.
- 10% is going into my profit account to create a cash cushion for my business.
- 15% is going to pay my taxes because that’s what business owners have to do.
- 40% is going towards my CEO pay. This is what I’m actually benefitting and putting in my pocket.
- 35% is going towards operating expenses.
To break that 40% down even more, I’m going to spend at least 30 minutes reviewing your intake form before our call. I’ll pull resources together to share with you during the call and afterward. We spend 60 minutes on the phone together and my brain doesn’t automatically shut off when we are done. I’ll probably think about follow-up notes I can send you and other takeaways for you. On the low end, it’s probably at least two hours, so instead of $1,500 for an hour, you’re really paying me $300 per hour of my time.
Are You Ready to Do the Math?
I want to know if doing the math changes your perspective at all on your pricing and why. Worthiness is a factor, but it’s not the most important thing. You simply need to be able to pay your operating expenses. You need to be able to pay the taxes. You need to be able to put some money aside so that you’re not going into a place of feast or famine.
This is just a fact of how businesses run. It’s not you trying to abscond with oodles of money. You’re not a bad person. You’re not greedy. You’re not wasteful. You’re not irresponsible. You’re not sheisty or scammy, and you’re none of those things. You’re running a responsible business.
Hopefully, this information helps raise some questions for you. I’d love to hear what your questions and thoughts are about this. Send me a DM on Instagram @thetaranewman. If you want to get started on your math today, check out the Revenue Goal Calculator.
