One big question that all business owners face is what do I charge?
You will have asked this question yourself.
Price is relative. People will tell you to focus on value not price but I want you to go further than that. Much further. Let me ask, what’s the most you would pay for a picnic hamper? £20? £200? £20,000? Until this evening I wasn’t aware that £20,000 would be an option, then I watched a documentary about Rolls Royce, in their latest signature car customers have an option to add a picnic hamper to the car for the modest sum of £20,000, bargain!
But I know you are not Rolls Royce.
So what’s the most your customers will pay? Well that all depends on who your customers are. The biggest mistake business owners make is thinking about what they would pay for their services, or worse still what their competitors charge. It’s easy to do in a world where the main supermarkets seem to fill every ad break with price comparisons, even the meerkats keep up the facade.
It’s true that there is a chunk of any market that is very price sensitive. People on low income have no option to be anything but. You can choose though who you want your customers to be. You can choose to be the most expensive in your industry and delight your customers.
Take web design as an example. Even if you’re not a web designer you probably have experience of buying a website. The options are baffling. But behind those options is a real choice about quality. You can but a website online yourself for free, use a ‘help to build’ option like Wix or WordPress or you can go custom and have a site built from scratch. Then with any of theses come the options packages. Much like the picnic hamper. Do you buy stock images or have some professionally taken? Do you use a template or have each page designed by a graphic designer? Do you write the wording yourself or employ a copywriter? Websites can cost anything from £0 to £millions.
Let’s look at the facts. Whether you work 40 hours a week building a low value website or 40 hours a week building a bespoke custom site you have still worked 40 hours a week. Assuming you have the skills and can deliver the quality why would you choose to earn less? Face it, life’s short. Would you rather earn £500 a week or £5,000? Most small business owners I meet are exceptional at what they do. But they undervalue themselves and are fighting to earn a living in a pool of customers that just can’t support them.
There are lots of £5 car wash services but I recently found a chap charging over £8,000 for a car wash. Yes you did read that right, you can view his site here. He was targeting the elite car owners and offering a very thorough car wash. His service was so bespoke and detailed he’d turned car wash into a professional service. The difference between him and you is just mindset. And I know you are reading this thinking, yes but I couldn’t do that because…..
You can! You choose your customers. Your product should meet their needs profitably. It’s all in your hands. Choosing to compete on price is your choice. So is choosing to compete on quality or any other factor. Free yourself from your self-imposed control on price. Shed the self-doubt and transform your business.
Here’s an exercise to try. Focus on the problem you solve for your customers. Now think about that problem and how it affects someone who earns over one million pounds a year. How could you change your offer to appeal to them?