Top Reasons You’re Not Charging Enough (and what to do about it!)
Posted on: March 29, 2016
If you’re a Small Business Owner, Entrepreneur or Solopreneurs, I’m guessing you struggle with setting your fees. I’m also guessing that the “number” you land on is a number you think someone will pay, not the number you actually want. As a Business & Life Strategist, working with people in this arena, I almost never hear a client tell me they are getting paid what they want. So, if charging more for your services/products is something you struggle with, please know you’re not alone. It is also a challenge for executives in salary negotiations.
So, why aren’t you charging more?
1. First reason you’re probably charging too little is because you can’t see your own value/worth.
If you feel that you are not “valuable enough” (which is usually not based in reality) you place a lower value on your services, which results in lower fees. How you feel about yourself ends up determining the value you put on your services and the rate you end up charging.
But, how you feel about yourself, your sense of self worth, and the value of your services have nothing to do with each other. The value of your services is about what the client will get out of what you are doing for them. It’s not about YOU, it’s about the value you provide to THEM! And, if you know this, and can work on understanding the difference, you can start to feel comfortable with charging more. (It would also be extremely beneficial, all around, to work on strengthening your sense of self worth since it affects every part of our life, across the board.)
2. You’re not targeting the right audience.
When many people are first starting out, they often “take what they can get.” It’s a new and scary territory and you want to make money so, of course, it would be natural to want to take on any client you can get. But, in doing so, there is a strong likelihood that you end up underselling yourself. And, after a while, it can be a challenge to raise your rates in fear of losing clients or not being able to get more clients because (you think) they’ll think your rates are too high.
Targeting a client base that has the money to spend is the simplest way to allow for charging higher rates. If you don’t discriminate, and end up going after people who have money issues who are hesitant to pay for whatever you’re selling, you’re going to get push back on your fees and it will keep you fearful of charging more. When you target people who have more cash flow, it is much more likely that you’ll get the amount you want without a problem.
Think about it, when you’re strapped for cash, the only thing you think about is not having enough money and not wanting to spend money, even on things you need. But, when money doesn’t get in the way, you have the freedom to look at something clearly and decide if you want it and/or need it. Prospective clients who don’t have cash flow issues can more easily see the value of your services and will be more willing to pay premium prices. The have the ability to see the value because money isn’t clouding their vision.
3. The third reason? You’re too general.
You’re not communicating that you’re an expert. Being too general when explaining what you do (in your “sales” conversation) won’t get you very far. People don’t hire general, they hire experts. Experts provide solutions to specific problems and people will pay for those solutions. Look at the medical industry as an example. Think about the difference between a General Practitioner and a Specialist. Your GP is, most likely, your first stop when you are having a problem. And, if the problem requires someone with greater expertise, they send you to a Specialist. You get referred to a Specialist. You may see more than one but, based on the solutions he or she provides, you WILL hire one. It’s a no-brainer.
In order to get paid what you want and deserve, you need to convey that YOU are the exact person they need. You are the expert they’ve been looking for. You will provide the solutions they need. And, added bonus, as long as you continue this kind of clarity about your expertise and have a good track record, you will stand out and become the “go to” person in your field. Just as your doctor referred you to a Specialist, your clients will start to refer people to you too. So, not only will you get the money you want, you won’t have to work as hard to find your clients.
Now, obviously, this is all a process that happens one step at a time but, the good news is, it’s all totally doable as long as you’re willing to commit to yourself. So, figure out how to do the work – if you need to, hire someone who has the skills to get you there. Do everything and anything that will help move you forward to a place where you feel good about this part of your business! Feeling good about yourself and your business will help make your business thrive!