Recognise Your Value & Price Proficiently
Cashflow is central to a business growing and being sustainable. Value and price is the key to this. More specifically, it is recognizing your value and confidently pricing that is key to this growth. How do we recognize the value and how do we choose our pricing model when we start a business? No one shows you how to, you will not find it on your college course or school curriculum. Yet, it is one of the key elements for selling proficiently and maintaining consistent cashflow. Ironically this was one of the biggest mistakes I made when I first started in business, I did not take the time to price properly and I did not see the value, I had overlooked a key element of my business success or failure, how to recognize my value and price proficiently.
What do you do if you cannot price confident?
If you do not know what or how to price and determine value upon, acknowledge it to yourself and seek out a specialist. Do not engage with someone who will not sit with you online/offline and work with you to define your price and value for your business product or service. Hands up, I found this a massive challenge and ironically, I now help clients to do just that for their business.
So, where did I go? I was lucky in that I was able to go to my local LEO office and I was very definitive with my request of “I need help with my pricing”. They put me in touch with a great mentor who was willing to genuinely help me to do just that. They asked me the right questions and it led to my confidently pricing and recognizing the value I offered to the right clients.
I also spoke to another trusted business owner who was a great help to me. Ultimately, I would advise that you a.) seek out the professionals who are qualified and experienced to support you with pricing and b.) only discuss this particular topic with someone/people you trust.
When did pricing cost me money?
There were two occasions where pricing cost me money and I learned a life lesson.
LESSON 1- Pricing on assumptions… in a hurry
Assumptions are the mother of all messes and that is what happened on this occasion, I made assumptions!
I was referred to a business to support with a project and of course I made some assumptions that turned out to be just that, assumptions and not facts….booboo numero uno! Number two mistake was pricing upon those assumptions in a hurry as if there was a gun to my head….big….massive mistake!
The onus was not on the prospective client to provide me with the facts, it was on me to confirm them with the client. I failed to do that.
What happened? Well there was a breakdown in communication, a grey area became greyer, expectations were not managed by me and I was not clear on my value which all amounted to the client refusing to settle their final bill. As a startup you cannot afford any of what I have just mentioned. What was lost? Well, confidence that I had in myself for a start, money for which work had been delivered and time, the most precious commodity in business and in life. It was not a good day at the office. However, I remember so clearly sitting in my car and thinking “Mags you need to learn from this now.”
LESSON 2 – Put the writing on the tin
My second lesson with pricing was not stipulating what was included and more importantly what was not included. Coupled with this I took it for granted that “shur they know that is not included” or “shur they know that is included”….when in fact clients often don’t and on this occasion they definitely did not.
Once you are confident on your pricing be confident on your value and that is where “put the writing on the tin” comes in. It goes back to that old adage of “It does what it says on the tin” and if we do not see it, we simply don’t see it, it is that simple.
What happened? I lost money. They paid the bill, but I had not priced correctly and at the end of the day I had over delivered for much less than I should have received….if only I had put all the value on the tin so to speak. I had left money behind; I had put myself under undue pressure and I had a client who did not recognize the value. I was not going to let that happen again.
On this occasion I did not stipulate the specific value to the client, and they failed to recognize the value, simply because I had failed to make them aware of it, yes, it was up to me to make them aware of it. Who else is going to do that for us?
In summary, if your pricing is not clear to you, let alone your clients/customers and if it is a challenge for you then seek a specialist in that area, ask for the help you need.
To be successful at securing your clients and building your business you will need cashflow and you need to be confidently pricing to generate that cashflow. I would also say that you need to make less assumptions and put yourself in your prospective clients shoes, what do you need to make them aware of in terms of your value?
Ask for help, Invest time and money in pricing proficiently. It is a long-term investment into yourself and into your business. Investing in this will develop a smart business owner who will be able to secure more sales and build consistent cashflow again and again. This is what can happen when you recognize and know your value. When you are confident and clear on your value and on your price, your client or customer will recognize it too.