We were having a chat in one of my client Facebook groups recently about marketing and pricing and a few ladies ventured forth with some confessions.
“Someone asked me about my fees the other day,” said one lady “and so I told him, and before he even had a chance to respond I carried on talking and discounted my prices down TWICE without even pausing for breath.” She was laughing about it but she was kicking herself. “Why do I keep DOING that?” she said. So we had a chat about her value to her ideal customer and her beliefs about money and she had a whole load of little old beliefs that cropped up and sabotaged her every time she talked about her fees.
“I daren’t put up my prices because my customers won’t be able to afford me” said another lady. “Oh really?” I replied, “what evidence do you have to support THAT little belief?” It turned out there was no evidence, she was just feeling a bit vulnerable and was scared that no-one would buy from her if she raised her prices.
“I just found out I was losing £5 on every handbag I sold” chipped in another lovely lady “until I did that costing exercise you set me, Claire, I had no idea what it actually cost me to make a bag. I got a real shock, especially as I was selling to shops at a loss! I was scared to look at the numbers but now I know exactly what everything costs, down to the thread, so I can set proper prices. And people are still buying!”
Do any of these ring a bell with you, by any chance?
Because these ladies are not alone. Not by a long chalk.
These ladies are pretty typical of every woman business owner I know.
Every day I see examples of ladies who:
- Believe that they can’t charge a decent price for their products or services because ‘no-one would pay that’
- Can’t bring themselves to tell people their fees or if they DO, then they talk their price down straight away for no reason
- Don’t like to talk about money because it makes them feel uncomfortable
- Are scared of spreadsheets and numbers because they believe they won’t understand them
- Have no financial targets in their business because it’s never occurred to them
- Don’t know if they are making a profit, or even if they are covering their costs because they’ve never worked it out
How can you run a profitable business if you’re stuck with all THAT?
The answer is that you can’t!
It’s impossible to run and build a profitable business if you aren’t clear on the numbers and are hanging onto old money beliefs that just don’t serve you.
So how on earth can you turn that around? If you’re prone to any or all of the above, it probably feels like you’ve got a ton of work to do to turn it around, right?
Well, no. It’s quite easy, actually.
You just need to remember a few things.
1. You Are Not A Mind Reader
First of all, stop trying to mind read. What I mean is, you can’t possibly know what your customers can or can’t afford. How many times have you seen something that you just HAVE to have? Whether it’s a pair of shoes, a new pram, a concert ticket – you hadn’t budgeted for it, but somehow you found the money. Because you VALUED it. That’s what people do when they really want or need something.
So how can you make your products or services so irresistible, such incredible value to your ideal customer that they HAVE to have them? What problems do you solve for them? How do you make them feel? What difference do you make? The clearer you are on your ideal customer and the more you market specifically to them, the better chance you stand of them finding the money to pay for you. Price becomes kind of irrelevant when you really want something – if it’s perfect for you then you do your best to find the money.
So bearing that in mind, ditch the amateur mind-reading act and stop pretending to know what your customers can or can’t afford. Create amazing products or services that are MUST HAVES for your ideal customer and they’ll find enough to cover your newly raised prices. You are worth it.
2. You Need To Know Your Numbers
Do you know something? I have a little spreadsheet where I fill in all of my sales each day. I can see what’s already forecast, so any payment plans or subscriptions I have in place for my clients are all in my spreadsheet. I also have a section for programmes and products I’ll be launching and running later in the year, and I make an educated guess as to what I can expect to sell, and I’m usually pretty close. And in the top right corner I have my annual target that I want to achieve.
Does this sound scary? Well, it might if you are scared of numbers as I used to be, in fact I hated spreadsheets and did everything I could to avoid them. These days I LOVE my sales forecast sheet. I look forward to updating it each day – it means that I never worry about money because I ALWAYS know where I am, financially.
What’s scary would be if I didn’t know. That would be REALLY SCARY.
When it comes to money, ignorance is not bliss. Choosing to ignore the numbers in your business is a sure way to get into a mess.
It might feel like a huge job to get to grips with this (I feel your pain) but you HAVE to do it if you want to run a profitable business. Just bite the bullet and start working out what’s coming in, what’s going out and what it costs you to provide your products/services. You might get a shock. You might get a pleasant surprise, but AT LEAST YOU’LL KNOW! And you can deal with it. You’ll feel better knowing, I promise.
3. You Have To Discuss Money In A Business
You have to tell people your prices. Even if it’s just on your website.
Don’t be embarrassed. If you know your numbers, as I’ve mentioned above, then you’ll understand what it costs you to make or deliver your products or services. Knowing what it costs you will help you to set your prices with confidence. You can’t make a loss. You have to make a profit. So that’s a really good starting point.
If you are evasive about money, or embarrassed or talk your prices down as soon as you’re asked, then you are not only devaluing yourself, you’re also giving that person ZERO confidence in you.
If YOU don’t believe in yourself and value yourself highly enough to just state your prices with confidence, what are THEY meant to think? How would YOU feel if someone was like that with you if you asked them THEIR prices? Hmm? Exactly.
Have confidence in yourself. Have confidence in your pricing.
You need to make a profit if you want to run a proper business. Simple as that.
Focus on providing amazing products and services to your ideal customers – forget about everyone else, they aren’t a good fit. Concentrate on your ideal customer, on adding value for them, on being a perfect fit for them and price will become a secondary consideration. If you’re that good a fit, they’ll find a way to afford you.
So, next time you get in a pickle when someone asks you your prices, or you start to knock money off before you’ve even started – STOP! Think about your three money truths.
It’s time to stop being a wuss about money. Start to think like a business owner and make money and numbers a key part of your business, every day. The sooner you do this, the sooner you’ll start to see the money flow and you can thank me later!
Claire Mitchell is a best-selling author of the Awesome Marketing Planner and founder of The Girls Mean Business, a mum and business owner. She has been featured in Marie-Claire, The Guardian, Closer Magazine, Essentials, The Huffington Post and on the BBC.