A lot of entrepreneurs have great skills and are good at what they do. Some will get enough clients to pay back their business expenses.
Only a few will have a business that’s profitable and scalable and that will stand the test of time.
Those who have a profitable business also have a different mindset. When I personally made the jump from 10 years of corporate career to being my own boss, I had to make several mindset shifts to successfully let go of my old mentality of Employee and learn my new mentality of Entrepreneur.
Here are 5 of them that saved my business and made it profitable:
1. You are worthy of getting paid
As an entrepreneur, one of the first excruciating things to do is figure out how much to price your services. Often, when someone resists putting a big price tag on their services, it almost always boils down to a self-worth issue.
If you feel you’re unworthy or not worth getting paid much for the work you do, I can guarantee you that you won’t.
It will be easier for you to raise your prices once you increase the feeling that you are worthy of receiving higher compensation for your work. Then the world will start reflecting this new internal value you get in the form of opportunity and new clients who are attracted by entrepreneurs into that price range.
Here is an exercise I invite you to answer in order to improve that feeling of worthiness:
First, start this worthiness ritual: At the end of each day, list 3 ways you bring value into the world (it could be related to your business or your personal life)
Then think of someone you admire and think about how much they would charge if they were offering your services?
2. Money is simply an exchange of value
In my corporate career, I often felt like people judged me on what I had (or didn’t have). I had all the kitchen gadgets you could dream of, I was living in a nice duplex in one of the most expensive neighborhoods in town.
I always wanted more to be able to consume more. But money is not the end goal. It is just a man-made concept that was created because it was easier to consider the value of goods and services with a universal currency. Aren’t you glad you don’t need to trade chickens and goats for this amazing new rug you want in your living-room? (I mean, where would you raise the chicken and goats, right? Who has space and time nowadays!)
So, now we exchange a value for a service. And that brings the question: Do you think your services have value? Often, when entrepreneurs are having a block around raising their prices, it’s because there might be some subconscious belief systems running deep that are sabotaging them.
In order to debunk those, ask yourself:
– Do I pay attention to what other people have (or don’t have) compared to me?
– Do I think it’s unethical to be charging a lot of money? Do I believe I can help more people if my prices are more affordable? Will people think I am a scam? Do I think that I can’t possibly charge that much because I am not an expert?
Then, take a piece of paper or your journal and reflect on your answers. Was there in your past some examples that led you to feel that way about life? Note down everything that comes to mind until you have this AHA moment!
3. You get better clients by charging more
I was talking to a lady the other day who was telling me that she found out she had better quality clients after she had raised her prices. She felt the clients she was attracting at the lower price were very demanding and not respectful of her time, often canceling a session last minute. They were the ones who tried to bargain and only do a part of her program for cheaper. They ended up rarely doing the work and therefore not getting results. Sometimes, she even had to chase them to get their monthly payment plan out of them. This was definitely not how she had envisioned her coaching business.
Once she raised the prices of her programs, she found out that higher-paying clients were more serious about their work together, paid on time, did the work, canceled within her policy and respected her time and expertise.
On the type of clients you have been attracting lately; what type of behavior do you wish wasn’t happening? What type of behavior do you wish you could see instead if they were your ideal client?
4. Think results, not time
When you start your own business, you’re not paid for your time anymore. The only thing your customers care about is what value you provide, what transformation you can make in their lives.
You must charge by the value you provide.
And you must also charge enough to ensure your needs are met so that you can invest in the necessary things for your business such as marketing, social media (and paying someone as soon as possible to do these things).
To help you figure out the exact value you deliver,
I invite you to ask current and past clients what they’ve been able to achieve as a result of your work together.
Then, define if your offering is helping your client achieve or improve one of the following 4 critical topics: Time, Money, Love, Health.
Finally, ask yourself how much it would cost your potential client NOT to invest in your services? For example, if you’re a health coach helping women prepare their body for natural pregnancy, how much would it cost them to have a medical procedure to get pregnant?
5. You only have 24 hours in a day
Many beginner service-based entrepreneurs don’t think about that. Whether you are a photographer, freelancer or a coach, you have to spend time to deliver the service to your clients.
And if you don’t know your numbers, you can quickly drive yourself to exhaustion without accomplishing your goals.
You have a limited amount of time and energy available so avoiding the overwhelm zone is critical if you want to keep providing high-quality service instead of overlooking something that will get one of your clients upset.
Building a thriving business isn’t a sprint, it’s a marathon.
And protecting your personal time and sanity is very important.
Charging bigger fees allows you to feel safe with your finances while freeing up your time to keep your sanity.
Let me give you an example of a new health coach: If this person wants to be working with 21 new clients in 3 months, that means that they need to get an average of 7 new clients per month. Assuming they have a conversion rate of 50% on their sales calls, that means that to bring 7 new clients, they would have to have 14 sales calls per month, about 4 sales calls per week, which means about 6 hours of sales calls per week (it’s not abnormal to spend 1.5 hours on a sales call at the beginning for a new coach).
That means that each week, they are already spending about 16 hours on coaching (preparing sessions and on the call with the client) and sales calls.
Then, if they decide to host two 1-hour webinars to attract the 14 sales calls, they need time to prepare the webinars, create background technology, to get people to register to the webinars etc…
And on top of that, they have to keep creating awesome marketing content, take care of their marketing and social media and administrative tasks for the week.
Quickly, the numbers do not add up.
You can be maxed out on the number of people working with you and if you price yourself too low, double check that you are reaching your financial goals when you’re at maxed-out capacity.
Here are few questions to help you calculate your own numbers:
1.How many client appointments and sales calls can you handle in a week?
2. How many hours do you need to spend on creating content, marketing, and administrative tasks per week?
3. How much do you want to charge per client?
4. Would you reach your financial goal if you maxed out on your number of clients?
Feeling like you need to shift another type of mindset block you’re having when thinking of raising your prices? Grab my free PDF to learn about the 9 Must-Have Mindset Shifts To Start Charging Higher Prices.