Service Providers have had many challenges when trying to figure out pricing. Most business owners do not really have a formula for pricing and it is a common area for me to offer expert advise on in my consultations. This year alone I had to work with multiple business owners set the pricing sheet.
Lets look at a few reasons why pricing can be challenge for business owners
- Lack of Research – This is a commonly found problem with start-ups and new business owners. Most businesses lack the research on what is the price tag for their services. Some will try to price out or over price their services without identifying what the industry metrics are.
- No competitive analysis – It always scares me when I see a business do no competition analysis to identify what the competitors are trying to offer. If you are in business it is just as important to know what your competitors are offering and what the rates range from.
- No service sheets – Most of the time service providers do not list down the services they offer or limit themselves to one core service. It is important to give your clients a visual and a call to action. A service sheet can do just that.
- No idea what to charge – Mostly found in startups some business do not do proper research and either charge outrageous rates or try to sell on price or bargain. This can sometimes bite them in the long run.
- What are you worth VS What is the cost – Some service providers let the ego determine the pricing. When you think you are worth millions and let that effect your pricing you will find more people moving off to your competitor. It is important to stay competitive but let your content do the selling.
- Personal needs VS Business needs Some start-ups will sell desperately because of their personal needs. You must always put your business needs first in this arena. Do not make business decisions based on personal reasons.
Have you made any one of these mistakes? How did it affect your business?