Before we dive into this subject, I want to put a bit of a disclaimer on here because one of the most frequent questions I get asked is “what should I charge for this”?
I know this is a question that’s on your mind, so please do not construe this for me coaching you through your pricing.
Don’t set your price a certain way and then say “because Tara said”
This is not me telling you what to do or how to price.
Pricing and offer creation are things I work on with my clients over an extended period of time, and can’t be fully addressed or advised upon in a podcast episode or blog post.
This is me encouraging you to think about a number of factors when pricing.
However, I will say if you’re wondering what should I charge for my offer/package/product…my answer will most likely be MORE than you’re thinking.
Most people I work with are either:
- Undercharging
- Overdelivering OR
- Undercharging AND overdelivering
And I want to point out some common traps that business owners fall into when pricing their services.
Trap 1:
They follow pricing advice that goes like this:
How much do you want to make (pick a number….any number that sounds good) and then divide that by how many people you want to work with and that’s what you charge. SO, I’m a graphic designer and I want to make 200,000 a year and work with 5 clients. So therefore my packages are $40K.
Cool. I actually do believe that graphic designers could have a $40K package or productized service.
That’s actually NOT my concern.
My concern is this doesn’t take into account a number of factors like:
- Cost of goods sold or cost of service sold
- Product/offer mix
- Profit margin,
- Cost of client acquisition,
- Your hours associated with delivery. How many hours does it take you to deliver one client facing hour. For example, coaches who have 1:1 calls or group calls. It’s not just the hour on the call — how much time went into prepping for the call or the workshop or the intensive, training class , or whatever you call it. What were the admin hours in scheduling the call or sending prep work?
- On done for you projects, you can expect some scope creep, are you factoring in scope creep to your pricing so you have a little buffer when needed?
- What it takes to run a business that delivers a $40K service,
- How much the graphic designer wants to make in their own pay
- …and more importantly WHY the graphic designer wants to make the money they want to make.
Your WHY is critical to ensure that when you do make the money and the profit it’s fulfilling to you, and that you’re supporting your business the way you desire.
For example, I want to pay my team and hire in consultants to support my work with my clients.
This looks like having a dedicated customer care person on my team, hiring in consultants to run workshops that enhance my coaching experience, or so my clients can hear a different perspective.
It’s of the highest importance to me that I provide work opportunities to reputable and credible experts and pay them well.
It’s how I show up to make my contribution to our economy.
I don’t nickel and dime people.
I don’t say I can’t afford that.
I don’t ask them to reduce their rate because they will get exposure.
I take a fierce stand for paying experts, especially paying women.
Women pay women. Period.
In order to do that AND still profit, I need to price my services accordingly. The benefit to my clients is…
- If I have a client who needs to reschedule, there is plenty of room on my calendar to reschedule. I’m not hustling on every low dollar contract or job filling my calendar to the brim.
- If I have a client who needs extra time on a call, they get extra time. I’m able to be generous because I’m financially cared for.
- I’m radically present because I’m not worried about paying bills.
- I have time to think strategically about my business and how it can best serve my clients in their next steps which allows my services to grow with my clients.
- They are supported by more than just me. They get a team of people who can help them.
- Sometimes I have a client really feeling stuck or feeling sensitive about something, it’s common for me to invite them to a quick call to co-work through the issues.
- Charging well and profitably for specific programs in my business allows me the space to offer a more accessible program like The Brave Society. So, because I take on consulting contracts with larger companies, at times, that gives me more space to POUR in my impact programs like BRAVE.
I want to leave you with a way to think through your pricing to help you incorporate both facts and feelings into how you charge for your services, because both are important.
If you go with feelings, you will most likely miss the facts like — cost of goods sold, hours marked for delivery, how much you need to or want to pay yourself.
If you focus on facts, you miss out on creating something that brings you a sense of meaning, purpose and fulfillment. The dollars mean nothing.
So, here is how I like to think about it:
Feelings first: How do you want to feel in your business and with your money?
Do you want to feel like your back is always up against the wall or do you want to ooze generosity and abundance?
Do you want to feel like you’re always scrambling for money, or one oh shit moment away from financial meltdown, or do you want to feel like you have more than enough for things that bring you joy and to cover your “oh shit” moments?
What are the facts you need to consider in pricing your offer? Do you understand your costs associated with your services, packages, offers?
Translate the above feelings into facts by equating them to owner’s pay or charitable contributions, or payments to team or savings.
Price your offer.
Then go back to your feelings. How does this pricing make me feel?
Important links to share:
Listen in on CEO Debriefs and Get 10 BOLD Questions for your own debrief.
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