Are Your Fees too Low?
If you’re like 90% of women solo entrepreneurs, your fees are too low and you are undercharging for your services.
After coaching thousands of small business owners on their fees, I know most have been taught to do ‘competitive research’ to find out what others in their field are charging. Then, they were instructed to price their services higher or lower, according to the differing value they were offering.
Well, if who they were comparing their fees to was undercharging, what do you think happened to their fees? Um hum… they were too low and ended up undercharging. And, this is a problem. It is a BIG problem.
To be honest with you, I am tired of seeing so many women entrepreneurs struggle with not earning enough in their businesses. Not earning enough affects their financial, emotional, and spiritual parts of their lives, as well as impacts their future potential to grow, expand, and create a secure future.
As an entrepreneur, whether large or small, there is no cap on your income. It is unlimited according to what you want to create, and what you want your business to be. As an entrepreneur, you are not stuck earning dollars by the hours, just as if you had a job. Yeah!
Earning higher fees begins with taking two actions.
1) Realize you are undercharging
2) Be willing to raise your fees and charge what you’re worth
You’ve already taken care of the first item. Here’s a simple 5-step formula to increase your fees so you are charging enough for your services:
Step 1. Decide on your annual income number.
Are you making enough to meet your monthly expense obligations?
If not, know what this amount is that you need to cover expenses. Include all household (rent, mortgage, taxes, insurance, food, utilities, automobile, etc.), and business expenses (office, VA help, online fees, banking fees, insurance, etc).
You want to create enough income in your business to meet ALL your expenses, and then multiply that monthly amount by 1.50 times. This way, you’ll be striving to create an income number that exceeds what you need, and will put you in a comfortable place, rather than always barely creating enough income to ‘scrape by.’
If you are making enough money to cover your monthly expenses, the next step is to decide how much you want to increase your income. Then, apply the next steps.
Step 2. Decide how many weeks and hours you want to work per year.
To do this, first decide how many weeks vacation you want each year. Then subtract this number from 52 weeks in a year. The result is how many weeks of time are available to you to actively generate income.
Note: The above number does not take into consideration passive or residual income flowing to you, such as through information products, or stock dividends and interest income.
Step 3. Determine what programs you want to offer.
I like to look at my calendar, and then plan out my program launches for the year. This method naturally takes into consideration the number of clients you will serve, both private, and group.
Step 4. Determine the value of your programs.
Now that you know what programs you want to offer, it’s time to ask yourself, “What is this program worth to my clients?”
To determine this value, you must consider the impact of the result on their finances, emotions, and physical, and spiritual parts of their lives. Also, what are the COSTS for them not investing in your program? Come up with a number, in dollars.
Step 5. Set the price.
Now, aim to price your program so that your clients will get 2 to 10 times ROI (return on investment).
For example, if a program, when applied by a client can help them create a business that generates $100,000+ income, I would recommend this program be priced at $10,000 minimum, which equals 10 times ROI. Pretty sweet, isn’t it? It’s a win-win for you, and the client!
Keeping Your Fees Low Keeps You Playing Small in Your Life and in Your Business.
It’s essential to increase your fees to a level that reflects the true value of your services you deliver to your clients. They get to win, because they get your juicy content that will change their lives.
And you get to win, too, by being able to support yourself and those you love, and you get to create financial security and wealth.
