How Much Should I Charge?
What if a client asks for me “X” (example: product, content, etc.) what should I charge them?
Posting these types of questions to an online support group may seem like the logical thing to do.
And you will get responses.
Lots of them.
We charge $400 per month
We charge $20 per hour.
Our minimum monthly is $2000.
The prices that others charge will be all over the group.
And frankly, I wonder if any of them have actually studied why they charge those prices.
What science did they use to extrapolate the price they charge?
Did they just pull a number out of their backside or was it based on their own cost of doing business?
Do you know that 97% of entrepreneurs have no idea what their true cost of doing business is, nor have they ever structured their pricing to reflect it?
So, all those posting their prices trying to help may have no clue if those prices are accurate for their business.
In fact, some entrepreneurs just copy their competitors prices and then try to make a living being a copy cat.
That doesn’t work either.
What if your competitor doesn’t know his/her true cost of doing business and guessed at pricing and used a competitor as a model. And now we have entrepreneurs copying each other over price and yet, the price isn’t even correct.
You might be thinking no way, that doesn’t happen.
Oh, but it does.
There are millions of companies out there who have no idea what they should charge and they just copy their competitor.
So let’s take $400 a month as the monthly price. What if after analyzing your cost of doing business your true price that you needed to charge was $750 a month, would you raise your price? Some would, some wouldn’t. Some would be too afraid to lose business or not be competitive.
But, here’s the thing…if you continue to price services like your competitors, then you are telling your customers that you are the same and to just flip a coin as to who gets the business.
Yet, if you charge a higher price, show your customer the value you bring to the table and the benefit your service can provide, they will choose you the majority of the time. And instead of making $400 a month you are making $750 a month or more.
Stop copying your competitors prices and start understanding your own business prices, that’s when you will start making more money.