HSEP36: 💰 How Much to Charge? Practical Pricing for Solopreneurs
For those solopreneurs out there, running a service-based business, a big question people often ask is “How much should I charge for the service I provide?” However, this "should" misses the real point and opportunity when it comes to determining the value of your time and what you have to offer.
A better question to ask is “For me to do what I love to do, and do it well, how much do I need to charge?” Ultimately, it's about what's practical. It doesn't matter what you charge because there are enough people in the world who can afford the value you offer.
For example, let's say there is a pool of 1,000 potential clients or customers, people who could benefit from what you offer, and you need to make $10,000. You only have enough time to give real value to 20 of those customers. It's clear that you need to charge $500 per customer.
Are you saying that 2% of the potential customer pool can't afford $500 for the value you offer? If your answer is NO, then you don't think the value you provide is really worth that amount. You'll have to reevaluate the value you're offering, and either increase the value or see the current value more clearly; without self-doubt.
A lack-based mindset can make this unnecessarily problematic. It can lead to fear of rejection, thinking people don't have enough money, being seen as too expensive, or being seen as too greedy. All of these can lead to charging too little for services. To avoid this, it's important to consider the value of the services being offered and charge accordingly.
It's funny how, no matter what price you charge, you'll always come across people who argue with you. People with a lack-based mentality will project their lack onto you, but it has nothing to do with you.
This fear of what others will think isn't based in reality. The reality is that you have something valuable to offer, which takes time and resources to create and deliver. If others want to receive that value, there must be an exchange of energy that compensates for the time and resources.
Furthermore, people are not paying for a block (an hour) of your time; they're paying for value that has been created and developed over many hours, months, or years. The value they receive is not a 'block of time' kind of value; it's a value that lasts many hours, months, or years.
For example, if your service adds 10% more happiness to their life for the next 5 years, how much is that worth? If your service helps to improve their relationships and avoid hours of suffering, how much is that worth? If your service removes 20% of stress while they run their business for the next year, how much is that worth?
The questions of "how much is that worth?" are relative and dependent on the person you're speaking to. The deeper question is: do they see the value, do they understand how much it's worth? However, communicating that value is your job, and this is where 90% of solopreneurs struggle. Because they are so bad at it, they feel the only solution is to lower prices.
Communicating value can be difficult for two reasons:
- You don't truly recognize the value of what you offer, and you're just looking to make money.
- Fear of rejection leads you to charge what you think others expect, rather than what is practical.
These hang-ups can lead to a lot of unnecessary questions and dilemmas that take away from getting to work.
Learning how to communicate value is a skill that can be developed over time. You're not selling a product or service; you're selling value, an outcome or experience that enhances someone's quality of life.
Things to keep in mind when it comes to defining how much to charge:
- How much time do I need to find customers?
- Consider the time spent searching for customers when setting your rate. For example, if it takes 5 hours to find one customer, that should be factored into your rate.
- How much time and energy do I put into serving one customer?
- Don't forget to factor in the time spent with each customer, as well as any additional effort required to serve them well. This could add up to 5 hours or more.
- How much are my total expenses to run my business and live comfortably?
- Make sure you have a clear target income to cover your expenses and live comfortably. Don't forget to factor in the costs of running your business.
There are many other factors to consider, but this is a good place to start. If you find this type of exploration helpful, let me know. I'm considering dedicating more time to this, as I have friends who are trying to figure it out, and I want to help them, as well as create content that can help others.
I'm curious to discover what ideas will come to me during the live video broadcast as I delve deeper into this topic. Join me today, for "Holding Space for Love to Be Seen." Join the conversation by watching live on YouTube, share your comments, bring your questions, and let's HOLD SPACE together.
If you are part of the FREE inLight Connect Community, you can watch the recording here for a limited time.