You are absolutely priceless, but your work comes with a price tag attached.
Talking about money and pricing is uncomfortable for a lot of folks, but, as a business owner, recognizing these truths and having these conversations is essential to your professional success and personal well-being.
Undervaluing your work is a great way to price yourself into burnout or out of business.
And when that happens? No one wins. Not your clients, not your team, and certainly not you.
So we’re going to have an uncomfortably honest conversation about money and owning the value of the results you create.
Why I’m Talking About Raising Your Rates During a Recession
You might be thinking, “Dana, we’re in the middle of an economic recession, and you want to talk about raising my rates?!”
The answer is: Yes.
This isn’t a conversation that only needs to be had when you’re just starting out, when you know that you’re overdue to increase your prices, or when the economy is booming.
It’s a fundamental conversation that we need to have as business owners.
Because raising your rates isn’t as simple as running the numbers and updating your website. It’s an exploration of value and worth and all the personal sh*t that gets dredged up when we talk about money and try to assign a dollar amount to the work we put into the world.
What I Learned From Undervaluing My Work
Over the last decade, there are a few questions that have come up consistently for my Catapult coaching clients.
How to raise your prices is always amongst the top concerns for these experienced business owners who want to build their companies beyond the high six-figures or low seven-figures they’re already bringing in.
As a serial entrepreneur turned high-strategy coach, I’ve learned more than a few lessons about building businesses–and how to raise your prices gracefully is one of them.
To be fair, I set myself up for it, as so many business owners do.
I officially started my coaching business ten years ago. At the time, I was new to the field and just needed a client to get on board already so I could prove myself.
So, I priced my services really, really low. (Read: ridiculously low.)
But prove myself I did. Driven to build something of my own and make a name for myself, I gave it my all and coached every client that came my way to the best of my ability.
It didn’t take long before it became evident that the value my clients were getting from my coaching was paying significantly greater dividends than they were paying me.
I had the evidence I needed, but at the rate I was charging, my fledgling business was unbalanced and, ultimately, unsustainable.
So, I decided to experiment with raising my prices–and quickly found a simple way to know when you’re asking for too much.
And it has nothing to do with how your clients react to the number or even whether they’re willing to pay it.
The 3 Prerequisites to Raising Your Rates
Raising your rates is not a blanket solution to covering escalating expenses or managing overwhelming demand. It isn’t a quick fix for growing your company. Like any business solution, increasing your prices needs to be implemented with intention.
Before you can adjust that price tag, there are a few things you need to have in place.
These are the 3 Prerequisites to Raising Your Rates:
1) You consistently deliver excellent work and superlative results. Every time.
2) The price of what you’re selling has to reflect the value of the results to your client.
3) You have to be able to name your price out loud. Without flinching.
No hesitation. Or mumbling. Or dialing it down.
You need to wholeheartedly believe that the price tag you’ve put on your services is an accurate reflection of the value you provide to your clients.
Your Price Tag is External. The Process is Internal.
Now, when I said that I set my rates too low, I wasn’t exaggerating. But, I couldn’t exactly go from charging $750 for six months of coaching (yes, THAT low) to $30k a year overnight.
My coaching was certainly worth at least $1000/month at the time, but I couldn’t bring myself to say the numbers! As so often occurs when you’re running a business, I was the bottleneck.
FUN FACT: There is no overnight solution to getting out of your own way.
I gradually raised my pricing as I slowly built my confidence in the value of my work. As I gained experience and expertise, the results my clients saw reflected that, so my prices increased to match the value they were getting.
But it took far longer to get there because I was starting from a position of undervaluing my work in the first place.
As it turned out, the hardest part wasn’t asking for more money. It was unraveling my beliefs about what I had to prove, owning the expertise I had to offer, and recognizing the long-term impact my work has on my client’s lives and businesses.
More than two hundred clients and a decade later, I can whole-heartedly say that my clients get incredible results.
The easiest to measure? More than 90% of my Catapult clients double their revenue and their profit margin. On top of that, they work 30% fewer hours.
And my prices accurately reflect the value my clients place on those results.
That’s been true for years now.
But if our community had been having these conversations more openly and honestly, I might’ve gotten there sooner.
I might have recognized that the biggest obstacle to claiming the value I bring to the table was in my head, not the market.
I might not have undervalued myself in the first place.
That’s why these conversations are so important. Yes, talking about money and the mistakes you’ve made in your business is uncomfortable, but humans make mistakes, and companies need to make money.
When we’re willing to talk about it, it becomes a hell of a lot easier to navigate.
And we realize that we aren’t alone.