Strategies for pricing your business
Running a business is not so straightforward. It does take consideration about how you do it. I get questions from both my entrepreneurial and career clients about the cost of running a business and how I determine my rates.
I thought I would share a few things about my philosophy as well as some tips for charging for your time. This information is particularly useful for other service businesses, that is a business where the individual is the product. For instance, I am a coach and I am my product. My ability to do my own work and be a clean instrument of change allows me to service my clients most effectively.
Don’t think of your time by the hour
Your time is being utilized in and out of a formal ‘session’ and if we as service providers are doing our job well, I think we are always working for our clients: considering their needs, thinking about a session we just had, making connections and so much more. I do not charge hourly because I believe coaching is an experience and a journey that we are taking together and so I price my investment options that way. The investment is in yourself by the way :)
Work backwards
Consider how much you want to make in a year, in a month, maybe even in a week and price your services and structure your fees accordingly. Consider these questions: What’s your cost of living? What’s your base minimum to live? What kind of additional income do you need for investments or travel or something else?
Look at how you want to spend your time
Carefully looking at how much time you can give to your business each week is a helpful way to consider how much earning potential you have and also how much you want to work. Sometimes we structure our businesses as entrepreneurs around a lifestyle we want, sometimes we do it for flexibility, sometimes we do it to fill a need in the market, sometimes for larger earning potentials. Getting clear on these points and what type of entrepreneurial journey you are seeking is important so you know how you want to and can spend your time.
Research your industry and market
The foundation to so many profitable businesses is clear research to understand the needs of our consumers. If you want to serve a certain type of person but you know they cannot afford the typical fees for your industry, you may want to create a program targeted at that person that is within reach. If you know that a certain type of person can afford your services more easily, understand how they would consume these services and how to get in front of them. Researching your industry and competitors also provides important information about how to run your business and what could make you stand out.
Know your worth
What are you bringing to the table? Are you giving/sharing information that could change someone’s life? Are your discussions with clients going to pay themselves off in revenue streams? Consider what your worth is in the services you offer and charge accordingly.
If you want to start a business but feel stuck about how to structure your fees and services, reach out and we can discuss the cost of running your business.
