This week’s episode of Good Girls Get Rich is all about pricing. How much should you really charge for your product or service? Pricing your products or services correctly is one of the more difficult tasks you will face as a business owner. The primary goal is to make a profit. But of course, customers want value. As a business owner, the goal is providing value at a premium price to make enough profit.
In this episode, Karen hopes to inspire you to take a look at your pricing and ask yourself, “How much should I charge?”
About the Episode:
Pricing is emotional. There’s no question about that. Many entrepreneurs are afraid to set the price they deserve because they look at that figure and think “this is how much I’m worth.” I’m ready to get that out of your head!
If you’re establishing relationships with people, you want to be able to give them a quality product. So let’s dive into the 3 things to consider when asking yourself “how much should I charge?”
Breakdown the price of your service, mentally:
If you’re selling one service, you have to think of everything that goes into you making that service.
Here are some things to consider when breaking down how much you should charge:
- Your prep-time for the service
- Staff you’ve hired
- Rent of your space
- Production of the product
- Insurance costs
- Tax costs
- Marketing costs
And these are just a few things! Once you understand how much it truly costs you to be able to offer your one service, then you’ll be able to narrow down a price that allows you to have a cushionable profit.
Build in profit to your service, so you can over deliver
I’m not going through this to tell you to overcharge. You need to be able to have the ability to build in enough profit for your service, so you can over deliver and provide the best service possible for your customer.
Remember, if you can make more for your service, you can do more with that money! If you work on a higher profit margin, that means you can allow a phone call to go over it’s hour limit because you’re not stressing attempting to rush to your next client for the paycheck.
You can offer more within a service, if you have more of a profit, so don’t be afraid to list a price and charge what your service is worth, and then some to invest back into your service.
Structure what you offer as a service, not a price/hour.
Dollars for hours almost never make sense for a business. The reason why is people immediately do the mental math and try to breakdown how much you’re getting for their time.
For example, if you offer a massage and list it on your site as “Signature 60 Minute Massage: $250” people automatically do the math and think you’re getting $250 just for a one hour massage!
Instead of doing that, list your massage as a “Signature Massage: $250” and go on to list everything that service includes, like a luxury robe and slippers upon entry, massage using our famous body oil from bali, free take home essential oil package, etc.”
That way, people can see everything they get that’s included in the package, instead of putting dollars to hours.
- How much should you really charge for a product or service? (4:30)
- Pricing is emotional. (7:32)
- Consider what your business would look like if you double your pricing. (9:11)
- There are several factors you have to consider in order to strategically price for maximum profitability. (10:07)
- Everybody who sells something needs marketing. Marketing costs should be included in your pricing.(12:26)
- List all the things that go into your ability of providing a service. (13:30)
- Dollars for hours almost never makes sense for a business. (13:44)
- There are so many things you could do when you make more money, like offering scholarships or supporting the underprivileged community. (17:20)
- It only takes one simple action to live a good life: Increasing your prices and building an amazing service. (18:37)
Resources Mentioned In This Episode:
- If you feel beaten down by life and discouraged, what’s more important is you get back up – just like what Lisa Lieberman-Wang did! Learn more about her story on GGGR Episode 66: From FINE to FAB!
- Still not using LinkedIn for your business? This might convince you to do so! GGGR Episode 61: Four Reasons Why LinkedIn Is THE Place To Be In 2019
- Time is money. Learn how to be intentional with your time and income with Laura Wieck.
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