I see this ALL the time with entrepreneurs, they charge far too little for their services and then at the end of the year wonder why they didn’t make any money for all the work they did? Know your worth and charge for it!
Excerpt from a post seen on Facebook:
****Before he died, a father said to his son; “Here is a watch that your grandfather gave me. It is almost 200 years old. Before I give it to you, go to the jewelry store downtown. Tell them that I want to sell it, and see how much they offer you.”
The son went to the jewelry store, came back to his father, and said; “They offered $150.00 because it’s so old.”
The father said; “Go to the pawnshop.”
The son went to the pawnshop, came back to his father, and said; “The pawnshop offered $10.00 because it looks so worn.”
The father asked his son to go to the museum and show them the watch.
He went to the museum, came back, and said to his father; “The curator offered $500,000.00 for this very rare piece to be included in their precious antique collections.”
The father said; “I wanted to let you know that the right place values you in the right way. Don’t find yourself in the wrong place and get angry if you are not valued. Those that know your value are those who appreciate you, don’t stay in a place where nobody sees your value.”
Know your worth.
When working on a passion project, it can be so fun that you would do it for free. If you did it for free you will not be able to continue to do the work. Well, if you already have tons of money you will be able to but you may not be fulfilled or have the same type of joy for this project. That said, not all passion projects are meant to be businesses. This post is for those who do want to make money from their talent.
Here are three things to consider when setting up your pricing for your business or product?
What Price Keeps You in Business
If you are selling your product for too little, you will constantly be stressing on how you can afford to make more products or to scale up your business. Setting a price where you can breathe, you have extra money coming in that enables you to build a good product or service is where you should be.
On Roomhints, we worked with a vendor that build beautiful luxury tables. This vendor priced their tables far too low. I could see that they were really struggling at this price to continue to make more tables and they were constantly stressed. I told them that we want to continue to sell the tables on Roomhints but they need to work on their business model to improve the way they conduct their business. At that moment I realize that they did not believe that their product could sell for a higher price. It was nothing to do with the product but the person making the product.
In order to set this higher price, you need to build the confidence within you that your product or service is worth this price. You will not successfully pitch or gain clients at that higher price if you don’t believe in it. So, know your worth and set your price at your worth.
For more business advice check out the article on The Secret to Success.
Your Price Determines Your Customers
Pricing helps to automatically build who your target market is. Your customer will be where your price is set. What section of the market do you want to go after?
Once you understand what section of the market you want to go after it’s easy to build the brand, target your market segment online, and own your niche.
Pricing Conveys Trust
If you price your product or service too low you may be actually losing customers. Customers will not believe that they can get what they are looking for at that price.
We learned this lesson fast on Roomhints. One iteration of the app was to get design advice for $39. There was a huge influx of customers but none of them were really satisfied as it is hard to give design advice for a room for $39. The price was set too low. We switched that price by 10x and changed it to design advice for $399. We had a completely new customer base and an increase in customers. At $399 we were delivering a product that people trusted could give them the service that they needed for their space.
In conclusion, you have to know your worth and be confident in pitching your price to prospective customers. Believe in your service or product. Why is your product or service worth this amount of money? Own it! Sell it. Be successful.