What should I charge? It’s a question that most business owners ponder at one time or another. The truth is pricing doesn’t have to be a business challenge. It can actually be quite simple if you know the strategies to price for profit.
The first strategy will allow you to increase your fees without losing clients. This strategy will actually help you gain more clients and earn more money.
Send an email announcing the upcoming fee increase. This will allow current and prospective clients an opportunity to lock in the rate before the fee increase. This strategy can bring in revenue that wasn’t previously planned for. Be sure to create a sense of urgency by including a deadline to take advantage of the opportunity.
If you’re reluctant to increase your fees because you’re afraid no one will be able to afford you….you’re right. What you think, you bring about. Your actions will always create your results.
This leads me to strategy #2. It’s important to have a set fee schedule otherwise you won’t be able to project revenue, let alone profit. Having a set fee schedule doesn’t imply that you won’t change your fees over time. It just creates a clear pricing structure and guidelines. Without a set fee schedule it’s easy to let your feelings and client stories drive your prices. Running a business that way will keep your profits in the black, which means you’re making money.
The last pricing strategy is to know your direct and indirect business expenses. The mistake entrepreneurs make often, I did it too, is looking at what others in the industry are charging and use that as a base line. We think that if we charge less than the competition that we’ll gain more business. This isn’t always the case. What generates profit for others in the industry may not generate profit for you. Besides, what proof do you have that they’re business is profitable at the current pricing level.
Want more profitable pricing strategies? Then, I invite you to join me at the Summer Rain Business Brunch where I’ll be sharing more pricing strategies to end the drought in your business and make it rain profit. Get all the details here: www.SummerRainBrunch.com