small business

Pricing: I Don't Give A Deal

Pricing: I Don't give A Deal

So here’s the thing…pricing your services can be a sticky situation.  Why do I use the word “sticky”?  Because there are 5 common issues involved with pricing that we can easily get stuck on in which we have ‘price regret’ within months. Most entrepreneurs make mistakes within their pricing structure by not charging  enough.  Two reasons: they’re not particularly clear about the value they are offering and they lack a wee bit of confidence in their position as a service provider, no matter how good they are.

The personal service industry is full of creatives and care givers; two groups of entrepreneurs who are at the biggest risk of devaluing themselves because they seriously love what they do so much, that if you asked them…they would probably give their service for free if they could afford to.

So how do you get un-stuck from pricing your services so you are making the money you deserve?  It’s not an exact science, but here are FIVE questions & answers to help you become a little more solid how to charge what you should.

1)  How do you position your prices in a sea of competition?

Do & don’t compare apples to oranges.  Make a list of the pro’s & con’s of what your space & services have to offer and pair it with your ideal client to see where you fall in with your competition’s prices.

What your competitor is charging is only one part of the equation to positioning your prices. Another point to clarify is your specific value within the marketplace and what that may translate into as a price. Click to Tweet

For example, in my own situation, a local hotel spa has state of the art treatment rooms, a large and luxurious guest lounge and steam room, to name a few of their outstanding features.  They will most likely be able to command a higher price of services than a home-based business because of their amenities (well, that and their overhead costs). However, you do need to take a few things into consideration. If, as in my own esthetic studio, your space is its own private building on the property, has been finished professionally and maintains high levels of customer service, it could certainly command similar prices.  In my experience, the value to guests who are looking for a more intimate & private space is extremely high.  They appreciate that they never see anyone else when they come & go from my studio (we live in a tiny town where everyone seems to know what you’re doing!)

Another example is mobile business.  In this case, you are giving a very high value to your guest by bringing treatments to the privacy & convenience of their own home.  It’s tempting to think that you should have lower prices than a brick & mortar business because you have no overhead, but your value comes with the extreme ease-of-use for your consumer.  Add to that the time & cost it takes for travel…you should be charging a premium!

2)  Do you know exactly how much your services actually cost you?

This may feel like an overwhelming project, but this is a smart business owners move!  If you need product to give your services, the exact cost of professional product for each service are numbers you must know.

Do you know exactly how much a cut & colour for long hair really costs you? May have a rough idea, but you really need to nail these numbers down.  A good resource for this is your product supplier.  Usually  bigger product companies will be able to provide you with a list of treatments that include the volume of each product used, plus the total cost of the product for that particular service.  If your supplier can’t provide you with that info, you’ll want to measure out the exact product used for each service and attach the correct dollar figure to it.  As an added bonus to figuring out your cost/treatment for pricing, you will save you money in the long run by preventing waste.

Also, to give you a better idea of what giving a treatment actually costs you, you’ll want to factor in the wage costs associated with the service.  For those of you who are single owner/operators…don’t leave this part out!  How much money are you charging per minute?  In this business, we’re selling time.  You’ve got to charge for it accordingly.

Product cost/treatment +  Wage/treatment = Total costs of giving a treatment

The rest of the money left over will have to cover overhead expenses and profit.  Where do your service prices fall in line with this equation?  Are you making a profit?

3) Did you price your services low in an attempt to attract more clients?

When you’re researching your competition’s prices, keep in mind that they may have created their pricing strategy by looking at surrounding business and trying to gain a competitive advantage by discounting their prices.  I urge you to not do the same!  Don’t contribute to the pattern of driving down the value of the service in your whole area.  What you offer is due so much more respect than that.

This is why it’s especially important to be clear on your value plus the cost per treatment so you aren’t tempted to discount yourself. Click to Tweet

Instead, you might better benefit from highlighting unique strengths and placing an emphasis on value and/or (sic.) time saved over money saved (via The Complete Guide to Understanding Consumer Psychology,

4)  What do you do when people balk at your rates & ask for a lower price?

Sigh.  This one drives me nuts.  You know the type…they call asking about your services & prices and then they start this passive-aggressive process of telling you that it’s too expensive or do-you-have-a deal-for-x-&-y or so-and-so down the street charges less.  They can be quite compelling!  And because we are creatives and caregivers we tend to fall for their manipulation and end up succumbing to the pressure to lower our price.  At the very least, we end up feeling disrespected and frustrated but unsure how to deal with the push back.

The interesting thing about giving a deal is that it does not lead to customer loyalty!  Deal chasers will always go for the deal whether it’s your business or the one down the road.   This is why I think daily deals can be the kiss of death for a business (they can work, but in very specific cases with a specific strategy in place).

5)  When do I raise my rates?

This is a popular question!.  If you’re not covering your costs correctly or you’ve been discounting in an attempt to keep competitive, you may already have your answer.

However, if your rates are inline with the above information, it could be time to increase your rates when your business productivity is consistently at 80%.  You may have some attrition with a price increase, but if you are giving outstanding service, the likelihood is small.  From that point on, continue your business building strategies at the new higher rates and watch your bank account grow!

Alternatively, if you are at 80% productivity it could also be an indication that you're at a stage to either hire a new employee or expand your physical space. Either way, it’s time to grow. Click to Tweet

Pricing your services is a huge topic and I've only covered 5 points here.  However, at minimum,  if you’ve done the market research and know what your services cost your business, you will, with conviction, know that discounting your services or keeping them low is a dangerous financial and client attraction strategy.  When you’re clear about all the above issues, you will be able to confidently stand by your pricing.

Need some help creating a strategy to re-price the services in your business so you can make more money?  I can help you do that!

Email me or call 250-516-3256 to get started with a FREE 30 min Business Discovery Session and begin the process of raising your rates.

If you liked this article you'll also want to read this one.

Go & Tell’ve got your skill. You’ve got your business idea. Now what?

Time to ‘OUT’ your business!

Yup. You’re in the ‘scary, exciting, omg-am-I-really-doing-this-buisness-thing, woo-hoo!’ phase.  Congrats! It’s a whole new, thrilling world you are about to enter!

But don’t be scared...I’m going to give you a HUGE tip to get started:

The most fastest, most cost effective way to ‘out’ your business is to create a Facebook Fan page.


#1 - It’s FREE!

#2 - YOU CONTROL ALL YOUR CONTENT. This is as opposed to a traditional website. With a Facebook Fan Page you’re not dependent on the time & money it takes for your web designer to make changes.

#3 - It has an incredible capacity to REACH ALL YOUR FRIENDS, your friends friends, and so on & so on. Think about that. That’s thousands of people!

#4 - Sharing your content happens INSTANTLY.

#5 - You have the ability to intertwine your personal life with your business life. This is a fairly new concept in business, one that the Big Businesses are having trouble with because they are so huge! Interestingly, these guys have been experimenting with their Facebook pages in an attempt to create a more personal feel. Here’s your leg-up on the Big’re already a small business and your customers will trust you more if you are willing to share some of your life outside of business. The truth is when your prospects start feeling they know you, IT BOOSTS YOUR 'KNOW, LIKE & TRUST' FACTOR...and it’s much easier for you to convert them to new customer status!

#6 - You can create INEXPENSIVE ADS THAT ARE HIGHLY TARGETED. Facebook literally walks you through creating ads for your business and allows you to cap how much you want to spend.

#7 - You can CREATE EMAIL CAPTURES TO GROW YOUR LIST (note: the bigger your list, the more growing capabilities for your biz) through apps like Shortstack.

But does creating or updating a Facebook Fan Page feel overwhelming to you?

I must introduce you to Lunabean Media. This lovely couple from Oregon have created a series of bite-sized video tutorials that take you from knowing nothing about Facebook all the way to creating slick-looking contests and ad campaigns.

The class you want is called DIY Web Marketing.

If you already have some experience with Facebook you can simply jump in at the level you’re at! I highly recommend this series.

What about a website, you say?

You gotta do that too. But first…create your Facebook page because it's hands-down the quickest, most cost effective method to get yourself 'out there'.

When Dreams Are Too Big

Big Dreams

 You have big dreams to open your own business. You love daydreaming about it: the happiness it will bring into your life and what abundance will come with it.

In fact, it’s one of your better daydreams that keeps you occupied during your lack-lustre job.

But that, my friends, is where the entrepreneurial dream ends for most people.

Why?  The dream feels too big!

It feels too far away and you simply can’t fathom how to get from here to there.

How can you move from boredom/unhappiness to freedom?  How do you transition from a day job that pays the bills to the joyfulness of being your own boss, doing what you love and that pays more than just the bills?

You've been looking at the logistics of what you think you need to get there (business plan, money, marketing, staffing) and you come to a screeching halt at the sheer pile of your ‘to-do’ list.

Enter stage left: overwhelm. You decide to put your idea on the ‘Maybe Later’ shelf.

Wait! Don’t put it on that shelf!  Deep down you know you’ll never get to it if you leave it there to collect dust.

I have a present for you: a simple mind shift that will help you clearly see the steps to your dream job.

Break the big dream down.

Crumble the dream into simple, bite-sized bits intended to teach you what you need to know for the final feast.

For example: Let’s say I’m an avid dog person with a 9-5 job as a Legal Assistant. My day job has been paying the bills and affords me my yearly tropical vacation. But the reality is I am so done with being a Legal Assistant but I can’t see a way to transition into what I really want to do: to open a Doggie Daycare. The thought of being with dogs all day (walks at the beach or park, snuggles with the pooches & maybe some grooming) lifts my spirits to amazing heights. I really want that life but I need the income from my current day job. How do I start the transition?

Here's the details:

 5 Bite-Sized Bits For You Start the Transition

I recommend you take one at a time (but in no particular order) so you don’t get overwhelmed and stop altogether. Just keep moving...just keep moving...

#1 - Educate yourself with introductory classes. In relation to the example above I would recommend taking some sort of simple, part-time class in the canine field (dog training, introduction to grooming, dog behavior). It doesn’t have to be a big, expensive course for this step...just something to get you focused on what you really want to be doing.

#2 - Start your own little part-time micro-business in your desired field. You may not have the money or savvy business knowledge required to open a bigger biz but you can start small to get your feet wet. With the doggie daycare example, I could start putting the word out to friends & family that I will dog sit your pooch in my home when they’re away on holidays. I would decide on what I would charge, order some business cards from and voila! I’m in business working towards my dream. It doesn't have to be complicated! The goal with this step is to begin creating a reputation in your field.

#3 - Absorb your desired industry. Find interesting websites & bloggers to read (create a special bookmark folder to save for later inspiration) and follow other entrepreneurs in your field on Facebook, twitter & LinkedIn. There has never been an easier time to connect with exactly the people you want to learn from! Join a free networking group in your area ( of like-minded people or create one yourself. The idea here is to immerse yourself in the energy of your industry and start getting comfortable with moving around in it.

#4 - Connect with business owners that are farther along the path than you. Request to meet for coffee to ask them about their industry: what you should expect for wages, what they see as the future for the industry and what they would recommend you do to get yourself there.

When I owned my spa I occasionally had women do just this. These young ladies were looking to get into the spa industry and before they committed to the esthetics program (which is $12,000), they wanted to be sure they knew what they were getting themselves into after graduation. I was a seasoned esthetician & spa owner and I loved to share my recommendations with them. I felt that if they had enough confidence to request a meeting with someone they didn’t know in order for them to make the right decision for their career, I was more than willing to give them my time & thoughts. I continued to mentor some of these women and felt my heart swell with happiness with their success. You may be surprised by who wants to help you!

#5 - You + Learning = Amazing You. Keep your eyes out for more classes or workshops for yourself. Don’t limit yourself to business or dog courses...look at personal development training as well. The better you know yourself the more clear your business path will be. Consider these courses as part of your training program for your Business Dream.

All of these steps can be done while you still have your full-time job that’s paying the bills. Working towards you business dream will take time and energy within your personal time, but a funny thing happens: you find yourself excited by this prep work and it doesn’t feel like ‘work’ feels like FUN!

You wake up on your days off early, refreshed and thinking about what you can do today that will move you in the direction you want to be. Happy. Content. Fulfilled.

For more information on how to transition your current soul-sapped career to the energy-filling job you desire contact me here.

Download your free e-workbook to get yourself started on transitioning out of the daily grind!