How to Raise Your Fees and Thrill Your Customers

Think the best way to get more customers is to have the lowest prices in town? Think again. Think the best way to create a successful business is to try to appeal to everyone? Wrong again.

The only good thing about having the lowest prices and trying to appeal to everyone is that you'll fail quickly and be out of your misery.

This is a really hard concept for many business owners to come to grips with. Small business owners can really struggle with pricing. There are tons of different approaches to pricing and that in itself creates plenty of confusion. It's been my experience that most small business owners tend to undercharge for their services and products.

Feelings, Nothing More Than Feelings

The bottom line is this. People buy for emotional reasons-not price. People buy from you because you solve a problem for them-not price. Yes, for some people price is the deciding factor for purely economic reasons. But how many times have you seen someone skimp on necessary car maintenance but spend big bucks on a car stereo? People will pay ridiculous amounts of money if they perceive high value. Visit an antique shop-why would you pay tons of money for an Early American kitchen chair when you can get a brand new chair for $30?

Listen, I've been watching the human species for decades and I've come to a conclusion-we're a really weird group. We're gifted with a magnificent intellect, the ability to reason and approach things in a logical manner. And yet, we make our decisions based on emotion! How else can you explain someone with 350 pairs of shoes or 35 antique cars or every Barbie doll ever made? We're just a bizarre species! Once you realize that, it makes raising your prices easier!

Of course, it's a little more complicated than that?so let's talk about some pricing strategies.

Cost + markup

If you make a product, you can price it by taking what it costs you to make it-materials, labor, and overhead and add on a markup percent for profit. If you deliver a service, you can price the service by taking what it cost to deliver the service-labor, overhead and add on a markup percent for profit. If the costs increase, you can raise your prices or reduce what you get for profit. That's a very common approach to pricing. The profit markup can be very small or it can be very large based on other factors.

Competitive pricing

Survey your competitors to find out what they're charging then charge a similar amount.

Lowest Cost Provider

"We have the lowest prices in town" is often followed by the "going out of business" sale pricing. Unless you have Wal-Mart's wallet, systems, and bargaining power, this is a recipe for poverty.

Value Provided

Your pricing in this method is based on the value that your customer perceives you provide them. This is a popular pricing strategy. In my opinion it has a major flaw. Let's say your beloved child has cancer. What value do you place on the doctors, nurses, therapists, etc. who provide care? All the money in the world is not enough to compensate for the value of a cure for your child. The value you perceive and the amount of money you can pay are often widely divergent. In the consulting arm of my business, my customers often tell me that the value I bring to their businesses far outweighs the amount of money they can afford to pay me.

The "What do I need to make?" pricing model

If you need $40,000 to pay your own bills, can your business generate enough sales to net you that amount? How can you structure your pricing to make that happen? This is a more realistic approach to pricing. If you start out with a baseline-a goal-and work backwards you often get a better feel for what you have to charge to stay in business. This is the same as breakeven which we talk about in a different section of the manual.

The downside of this approach is that it limits your income-which means that instead of achieving prosperity from owning a business, you're only creating a job for yourself.

The "What do I want to make?" pricing model

Now we're getting somewhere. Self employment should do more than create a job for you. It should build value. Most small business owners who survive long enough to want to sell their businesses are dismayed to find that the business has little value. No assets. No transferable brand. No saleable systems. Not retirement. It's merely provided them with a living for a time.

This pricing model takes a long term view of your business. Where do you want to be in 5 years, 10 years, 30 years? What are the opportunity costs involved? If your business takes three years before it supports you, what is the cost to you in salary or wages that you could have made working for someone else? Pride of ownership is a wonderful thing, but find ways to make what you own more valuable in the long run.

Knowing where you want to get to gives you the opportunity to work backwards to see how you can get there.

Personal Pricing Strategies

One of my colleagues has a pricing model that she finds works very well for her. She talks to her potential clients about a project. Then, she sits down and thinks about the project, what it will entail in terms of time and energy. She decides on a price, takes a deep breath, and adds a thousand dollars to it. Only then does she call the client with the price. She knows that if she doesn't do this she will under price her services. (And yes, she's very busy and successful.)

Another colleague changed her pricing strategy after giving birth to her first child. She looked at her baby and said, "What is it worth to me to miss time with my baby?" She prices accordingly.

Another colleague looks at each customer and decides what she will charge based on the level of difficulty she feels the customer will present. Some customers are so difficult to work with that no amount of money in the world would compensate for the wear and tear. Other customers make her feel that she'd work for them for free (she doesn't) because they're so great.

Another business takes the approach that they're the best at what they do so they charge premium prices. They back that up with great results and continual focus on what makes them better than the rest.

In short, there are any number of pricing strategies you can use in your business and any number of ways to justify those prices in the market place.

Caroline Jordan, MBA helps self employed professionals earn what they're worth, attract customers they enjoy, and increase their income. For more tips and strategies for working "ON" your business, not just "IN" your business visit: http://www.thejordanresult.com/mastering.html.

limousine Ackley .. Lockport Chicago limo O’Hare
In The News:

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Artificial intelligence-based cameras are giving air defense operators unprecedented capabilities in monitoring and protecting airspace.
Apple's iOS 18.1 Inactivity Reboot automatically reboots your iPhone if it hasn't been used or unlocked for more than three days, providing better data protection.
An inventor designed rooftop solar panels for a Tesla that draws solar energy while the car is parked, adding travel mileage without plugging in.
There are currently no laws governing what artificial intelligence can and cannot do with the information it gathers; here are 10 things to avoid telling AI chatbots to keep yourself safe.
A credit union with over 240,000 members recently revealed it was targeted by cybercriminals, resulting in a data breach that was part of a two-month attack by hackers.
Scammers have become skilled at creating convincing fake websites that can easily fool unsuspecting users. The CyberGuy offers tips to protect yourself.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
CAPTCHAs, which are used by websites to confirm whether users are people or bots, are harmless, but hackers are using them to infect PCs with malware.
Hackers recently leaked personal information of about 500,000 Americans and stole patient medical records that included lab results and insurance details.
The holiday season sees a rise in mobile shopping scams. Tech expert Kurt “CyberGuy" Knutsson helps you learn how to stay safe.
Tech expert Kurt “CyberGuy" Knutsson says a VPN enhances online banking security by encrypting data and protecting privacy.
Beware of these six sneaky holiday scams. Tech expert Kurt “CyberGuy" Knutsson gives you tips to avoid falling victim.
Tech expert Kurt “CyberGuy" Knutsson reveals how to securely back up and factory reset your Android to protect your privacy and data.
Artificial intelligence is making life easier for cybercriminals, allowing them to create elaborate scams to trick people. Kurt the Cyberguy explains how to protect yourself.
Cut through all the digital clutter and delete multiple emails from your Android simultaneously. Kurt the CyberGuy explains how it's done.
Tips to prevent your holiday decorations from being stolen
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Kurt "CyberGuy" Knutsson lays out the immediate steps you should take if your phone has been hacked and your personal information becomes vulnerable.
Fraudsters are sending people bogus invoices through PayPal as part of a sneaky scam that is going around; here's how to protect yourself from being fooled.
A former Colgate-Palmolive employee was shocked to discover $750,000 had been drained from her 401(k) account. "CyberGuy" offers tips on how to prevent identity theft.
Electric vehicle maker Harbinger recently showed its electric delivery truck can handle icy roads with agility and stability in winter.
To make the busiest time of year more manageable, here are some tricks for tracking your packages, taking quality family photos and curating the perfect Christmas playlist.
Kurt "CyberGuy" Knutsson explains how to keep your online Amazon gift purchases a secret from loved ones or friends this holiday season.
Factory resetting an iPhone is a crucial step to protect your privacy and prevent theft when you are selling, trading or donating your device.

Awning Cleaning Business Case Study: Entrepreneurship 101

It is most fascinating to study how entrepreneurs spot opportunity... Read More

The Hidden Treasure in Your Business

I started working with another new client last week. He... Read More

Temporary Staffing Agency: How to Start

The temporary staffing industry continues to expand, with yearly double-digit... Read More

A Small Business Consultant Can Help in Many Ways... But One Thing He Can?t Provide

A consultant must remember that the business belongs to the... Read More

Small Business Debt Collection Laws

In your small business debt collection laws will eventually become... Read More

Passion Is Key To A Successful Business

Passion. Passion alone can make your business successful. As an... Read More

Small Businesses You Can Start in Automotive

There are many choices when thinking about a small business... Read More

Top 10 Record Keeping Mistakes Business Owners Make (and How To Avoid Them)

If you interviewed business owners of failed businesses, a majority... Read More

Explode Your Consulting Income

Here are just a few ways to increase and diversify... Read More

Accepting Checks in Your Business Virtually Risk Free

Most businesses accept checks as form of payment for goods... Read More

Starting A Concrete Cleaning Pressure Washer Business

Concrete cleaning can be a lucrative business to start. Here... Read More

FTC Adding to the Franchise Rule

Last summer the FTC put forth a report and then... Read More

Arranging Your Fundraiser

When deciding to host a fundraiser for your company or... Read More

Outsourcing and Virtual Assistants: Small Business Saviors

Work smarter, not harderWhat is one of the best ways... Read More

Conquering Confidence Killers for Small Business Success

"The way to develop self-confidence is to do the thing... Read More

Age Old Marketing Technique Improves Business Plan Executive Summaries

Every business plan book tells you how the Executive Summary... Read More

But This Is Just My Opinion

Hi, Charles...here, Your Cap and t-shirt guy From Texas. How... Read More

Two Types Of Business Plan Cover Pages ? Which One Are You Using?

This is the tale of two business plans with very... Read More

How to Start Home Based Travel Businesses

Home based travel businesses are no longer the wave of... Read More

How to Give FREE Advice and Make Money

When is advice free and when should you charge for... Read More

What is Business Process Automation?

Business Process Automation or BPA for short. This was a... Read More

Financial Fundamentals - What Every Small Business Owner Should Know!

Business owners rarely go into business to deal with the... Read More

Can Your Business Run Without You?

What would happen if you decided to take an extended... Read More

Small Business Success - It?s a Matter of Confidence

I was floored! I couldn't believe what they were saying!... Read More

Virtual Assistance for Healthcare Professionals

Administrative and clerical tasks are the bane of every industry.... Read More

shuttle from O'Hare Alexander ..