• Tweet
• SumoMe

• Tweet

Money.

That word can bring up a lot of different emotions in a small business owner. Desire. Discomfort. A whole range.

Let’s take a look at the business world out there. A huge corporation for the most part is all about the money. Profit, profit, profit. This obsession with growth and let’s face it, downright greed in many cases, is something that mires capitalist societies.

Small business owners on the other hand (at least the ones that resonate with what we’re about here) care about much, much more than just money; they are passionate about what they do and have started their biz to share their special gift with the world. (Go small business!) And it’s this love that can sometimes make pricing a bit of a tricky issue with small business owners.

Maybe your passion about your product and your desire to have it accessible to everyone is making you price too low. Or maybe you think you can’t compete with “the big guys”? Or maybe even just that you can’t compete with your competitors? Or maybe the biggest kicker of all, deep down inside you feel that you don’t deserve to earn more.

I know that I personally have all kinds of issues with money. I can be frugal to a fault. I hate how some hoard wealth while others don’t have enough to eat. When I get right down to it, I hate money. I think it’s gross. I feel totally uncomfortable living and working in a monetary system. I wish that I could work for free. Seriously, I just want to help people.

But despite how I may feel about it, for now at least money rules the roost. Something that I am working on is dealing with money in a way that is as healthful as possible, and encourages feelings of abundance, not lack.

And step 1 is working on how guilty I can feel about charging entrepreneurs for my marketing services.

So here we go, I am raising my prices. Phew. Exhale.

As a small business owner, it’s OK to change your prices…and feel good about it! If you’re thinking it’s time to adjust those figures, let’s look at some things to consider.

Pricing in General

I love Tara Gentile’s example of pricing in How much should a cup of coffee cost? A 69 cent coffee makes you think of a gas station, 2 bucks makes you think of Starbucks and 5 bucks makes you think of that swanky espresso bar.

Now what if you went into the gas station and they were trying to sell you that cup for the 5 bucks of the swanky espresso bar? No way! Pricing too high or too low makes for an uncomfortable customer.

It’s a reasonable, profitable price that will show value of your business that will make for a comfortable customer.

Pricing strategic to your business

Different pricing strategies exist for different business models. Entrepreneur offers a great overview of the different strategies for pricing a product.

You need to understand your whole market from top to bottom and then figure out where you fit in so that you can price accordingly.

Some questions to ask yourself:

• What does your business MEAN to your customer and what is their experience?
• What is your style? Website, testimonials, sales process, etc. and who is this catering too?
• Will my pricing ensure the success of my business? Will customer take it seriously? Will it push them into action?
• If I’m offering a service, does my hourly rate also include all the background work I would have to do?

MUSTS:

• Cover business costs. The number one golden rule is that the prices you charge MUST cover the cost of running your business.
• assure sales
• Review frequently by comparing with costs of running your business/market/competition/profits coming in

Cheap isn’t always better

Pricing your product as cheap as possible does not ensure an influx of customers.

While it is important to know what your rival’s are doing, going cheaper doesn’t ensure success. Here’s an example from a New York Times article where a special gluten free flour was trying to keep the same price as any old flour and was losing money. She then upped her price because of her higher quality, diet specific product and that got her profits going again. It’s because her product has an added benefit to the regular old flour and so, of course, it’s more expensive to produce. And, of course, gluten sensitive folks out there recognize that.

And now for the sum up pep talk. If you need to raise your prices, you should feel good about it (and not guilty!)

• You deserve a fair wage that covers your time and the costs of running your business. You do good work and what you charge is a reflection of that.
• We need to make a living. If your current pricing structure does not allow for that, raising your prices is nothing to feel bad about.
• Your right people will be willing to pay you. Don’t worry about the price shoppers. What you do and how you do it is priceless.
• Don’t worry about getting your pricing perfect, especially if you’re just getting started. You can always shift things as you learn and grow. This is the second time I’m raising my prices since starting my business.
• Don’t be afraid to stand your ground if you get push back. Remember. you deserve this.
• Don’t be afraid to do what feels good and resonates with your values. I know that for me personally, any clients that I had when I first started my business (and my prices were lower) still get that discounted rate. I also shy away from discounts (unless we’re talking best friends or family members) so rather than feel I need to offer personal contacts and friends special prices, I go the route of value added.

Now I’d love to hear from you. What is your pricing strategy when it comes to your small business? What challenges have you encountered? Meet you in the comments.

Image source: Vlado/FreeDigitalPhotos.net

Tagged as: entrepreneurship, pricing, small business