How To Tackle The Challenge Of Setting The Right Prices For Your Business

setting prices for business

Hey there! Let’s dive into something that might be a little too real for some of us running home-based businesses: are we charging enough for our services? You’d be surprised how often the answer is a resounding “No.” This isn’t just about making ends meet; it’s about valuing our worth and ensuring our business isn’t just surviving, but thriving. It’s about correctly setting prices for our business.

A Real-World Example: The Bus Driver Dilemma

Take, for example, the local school district facing a bus driver shortage. They pay $40 an hour, which sounds decent, right? But when you break down the hours and consider the costs of living, it’s hardly enough. This scenario isn’t just about bus driving; it’s incredibly relevant to us as business owners.

The True Cost of Running a Home-Based Business

Most service-based businesses set their hourly rates between $25 and $75. Sounds fair? Maybe on paper. But remember, unlike regular employees, business owners don’t just clock in and out. We’re the marketing department, the billing department, and everything in between. If you’re pricing services as if you’re working a 40-hour week without accounting for these extras, you’re setting yourself up for burnout.

I learned this the hard way. In my first year, I was working 12-14 hours, seven days a week. It was unsustainable. I realized that if I didn’t adjust my prices, I wasn’t just risking my business—I was risking my health.

The Psychological Barrier: Fear of Raising Prices

So, why do we hesitate to charge more? Fear. Fear of scaring off clients, fear of not being worth it. But here’s the thing: quality clients—the ones you actually want to work with—understand that quality doesn’t come cheap. They expect professional rates that reflect professional services. By underpricing, you not only undermine your own business but also potentially deter serious clients who equate higher prices with higher quality.

Evaluating Your Pricing Strategy: Are You Selling Yourself Short?

Let’s not fall into the trap of the $40 bus driver scenario. If your business isn’t supporting you, it’s time to take a hard look at your prices. Setting prices for business isn’t just about putting numbers on a rate sheet—it’s about understanding the value you provide and ensuring that you’re compensated for it.

It’s uncomfortable to jump from charging $50 an hour to $125 or more. But remember, those who value what you offer will be willing to pay for it. Don’t sell yourself short—literally. Evaluate your pricing strategy today and make sure it reflects the true value of your services. Your business—and your peace of mind—will thank you for it.

So, have you checked your prices lately? Are they truly reflecting the value you provide? Let’s not wait for a crisis to make the change we need to succeed.

Are you interested in learning more about setting prices for your business?

Setting Rates Based On Value

Join this six-week self-study course that will take you step by step through finding exactly what your value is, teaching you how to set your rates and prices accordingly.  Each lesson is delivered weekly; right to your email inbox with access to worksheets and a private Slack chat group where you’ll have direct access to me. If you’re baffled as to what you should be setting your business prices at, this is exactly what you need.

TMarieHilton

Tina Marie Hilton provides online technology services to forward thinking businesses. She writes on her Tips from T.Marie business blog to share insight and information with other small businesses and entrepreneurs. It also makes her feel like that certificate in creative writing isn't going to waste completely.

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