One of the biggest challenges new and seasoned business owners face is how to price their products/services. Often times, the pricing mistakes shared below are symptoms of fear and lack of confidence. I speak to business owners all the time who aren’t generating the income they desire because they simply aren’t charging enough.
Fear and lack of confidence keeps far too many business owners stuck when it comes to pricing and achieving their revenue and profit goals. The list below includes 7 pricing pitfalls to avoid.
- Pick me, my price is lower – This pitfall can cause you to choose a price that is lower than your competition in an effort to get more business.
- What’s it worth – How much is an hour of your time worth? It’s important to know this because it will help determine which tasks you should delegate and which ones to outsource.
- Excluding expenses – It’s important to know, track and monitor your business expenses so that your prices are set accordingly.
- Getting caught in the story – Let’s be clear – everyone has a story. But letting someone’s story determine your prices makes it really hard to forecast your revenue and cash flow.
- Letting one no represent the entire market – Not everyone will buy your products and services even if you think they should. Don’t let one person’s no determine the price your charge everyone else.
- Assuming versus asking – You could be charging less than your market is willing to pay. In other words, you could be losing money – lots of it. Do your research and ask them what they will pay.
- Not charging – You may love what you do so much that you’d do it for free but that doesn’t mean that you have to work for free. If you’re in business to generate a profit, then charge for the products and services you provide.