Hello, hello! I hope you’re feeling brave & proud this week. In order to put yourself out there in the way that it takes to be a small business owner, you gotta be brave. That doesn’t mean ‘perfect’, but it does entail saying (and meaning) ‘I belong here and I have something special to offer’. So, first let me say: You go, girl. Second, sometimes we need an outside push to remind us that we belong. Today, that outside voice is Heather S. Saunders. Heather is a Senior Financial Advisor at Ameriprise Financial and can be found here. I met Heather right before launching Boss Babe Club at a Tampa Tails networking event where all the proceeds benefit the Humane Society of Tampa Bay— and I’m so glad I did. Because she’s so kind, brilliant, funny, a great listener, and the exact kind of person you want in your corner on the days when you’re feeling not so brave. She’s also a Babe Crafted Member & I’m so excited to share her guest post with you on ‘Knowing Your Worth’.
This is a topic for every gal who has honed her craft & created a pricing structure in order to offer that craft to others, because pricing is more than numbers on a page-- it's also a state of mind. Check out what Heather has to say about pricing for herself & her advice for other Babes out there.xx
The subject of pricing is always a relevant topic for small business owners. We feel the need to stay competitive, but must also ensure that we are not only covering our costs, but are truly earning what we are worth. Think about the work – all the work – you do for one client in a given time period. Try to approximate how much time you spend doing that work. For a photographer, that will include any preliminary meetings you have with the clients before the shoot, the shoot itself, and all the time you will spend on post-production before delivering the final product to the clients (as well as many other steps I am sure that I’m unaware of). In our financial planning practice, it includes all the time we spend gathering the client’s data, analyzing it, creating a plan with actionable recommendations, meeting with the client(s) at least twice per year, plus portfolio reviews in between. When you divide your fee by the hours you are spending on the work, are you happy with the hourly fee that you see?
Once you’ve determined your pricing model, however, a common fear is losing business to others who are charging less. Many small business owners – especially those just starting out on their own – compensate for this by price-matching or offering discounts to increase their perceived value. Each situation is unique, so I will “never say never” when it comes to offering discounts. That being said, here’s some food for thought. I used to love shopping at The Limited. For years, I built my professional wardrobe with their classic pieces, which were a great cross-section of quality and cost. But I noticed that I was constantly receiving emails from them for different sales. A 3-day sale for 50% of all dresses, BOGO pants, 40% off an entire order with free shipping…you get the idea. Why, I asked myself, would I ever buy anything from them at full price again, if they clearly didn’t think the clothes were worth full price? So I didn’t. If I saw an outfit I wanted, I would just wait for it to inevitably go on sale, which was usually within two weeks, and then I’d buy it for less. The Limited filed for bankruptcy in January of 2017.
Ultimately, discounting what you’re worth can hurt not just your business, but the entire industry in which you work. If you’ll allow me another anecdote, I used to plan the corporate events at a mid-size broker dealer. I was taking some event planning certification courses, one of which focused on planning for non-profits. One of the attendees, who was a professional event planner, said that she felt bad charging a fee to non-profits groups, so she usually did their planning for free. No charge. Pro bono. You could feel the atmosphere in that room sink. She had good intentions, but was inadvertently setting an expectation that non-profits did not need to pay for that type of service, then or in the future.
I think one of the keys to charging what you deserve is having the confidence to do so. On that subject, I always like to reference Mindy Kaling’s book, 'Why Not Me?'. In the last chapter, she writes about her confidence coming from a sense of entitlement. Not the “four-letter-word” kind of entitlement that is applied to people who feel they deserve something for nothing, but the kind you feel when you have worked extremely hard to get where you are. As in, toiling for countless hours on my degree, years of additional training for professional designations, personal dedication to each of my clients’ unique financial situations, creating strategies for individualized plans, and helping to maintain those plans for years to come. I feel entitled to receive a certain fee for that because I deserve it. In other words, I am providing value that is worth what I charge. That may mean that I miss out on some clients, and I am still learning to be ok with that.
To completely paraphrase Mindy Kaling, “Work hard. Know your worth. Show your worth.”
And, as always, stay boss.