Why does your business need a pricing strategy? First, I want to talk about something that I don’t see talked about enough; the struggles that business owners experience. I often think back to when I first started a business. I had written down all my business goals and plans and I remember the excitement and positive apprehension I felt that all of my dreams would come true and these plans were going to be my golden ticket to financial freedom and success.
My preconditioned mindset about how money was earned seeped in when writing those plans. I was SO certain I could do it. All I had to do was hustle and work my damn ass off and it would work. The money would roll in.
You see, most of us are programmed to believe that hard work pays off. Working harder will get you there. I guess YEARS of corporate and hourly work had taught me this. The idea that if you aren’t seeing results, then you must not be working hard enough.
Yikes. I’m so glad I steered away from this insanely limiting and damaging limiting belief. Let’s face it, you would be pushed to find someone who would rather work a crap ton of hours, hustle, stay up late and miss out on life over the alternative; freedom, flexibility, and living life on their own terms. So, let’s take a look at why you need a better pricing strategy and how your current one could be holding you back.
Working Harder Doesn’t Equal Success
What is your first reaction when you haven’t made the amount of money you were expecting in your business? Mine for years was to just work harder. Surely that was the answer. Nope, and I don’t care what Jillian Michaels says. I mean what does she know about your pricing strategy? There is no direct line between working harder and making money.
I’m sure you can think of someone right now who is putting in all the hours and working to the bone but still have nothing to show for it financially. Flip the coin and you might know someone (or see someone on social media) who seems to be putting in fewer hours, taking longer vacations, have a team, and are making a lot more money.
Is it unfair? From the outside looking in, you might think so.
Or, has one of these people figured out the true secret and method to financial freedom. I would be confident in assuming that the latter has a solid pricing strategy that works for them and not against them.
What is The Law of Diminishing Returns?
*fixes glasses* According to Brittanica:
“Diminishing returns, also called law of diminishing returns or principle of diminishing marginal productivity, economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.”
How can we relate this back to us and our pricing strategy? Well, it’s a proven mathematical fact, studied and played out in work environments in all fields of work. After a certain point, you can continue to work but your hours of work will produce fewer and fewer results until eventually all that effort actually starts to produce negative results.
We need to add a human element here. Breaking it down from a brain-based approach, you only have a certain amount of hours in a day. Our human brains can only handle so much no matter how much we want that fact to be different. We usually start off strong, increasing productivity hour after hour. You will then get to a point or a peak of productivity and what then happens is that you’ll start to recede.
This can be a hard pill to swallow as I’m guessing you are an incredibly motivated and hard-working person who is willing to do whatever it takes to make it work. But, it’s true, working harder and longer can backfire and start to reduce your productivity and ultimately your profits.
Your Pricing Strategy: What Choice Will You Make?
Really you have two….. Continue to exchange hours for dollars in hopes of being the exception in this mathematical fact OR find a way to make the hours you are productive worth more money.
We don’t need to linger on which pricing strategy we would all prefer.
*profitability pricing has entered the chat*
I know for a lot of us, there is some resistance when pricing. This usually stems from lack of confidence, imposter syndrome, and of course our preconditioning. The only person suffering from your lack of a pricing strategy is you. It is for YOU to decide how much your offerings are worth, not anyone else.
Side note: your true ideal customers and clients will be happy to pay you what you deserved to be paid.
So, how do you create a solid profitability pricing strategy? It’s about taking the hours you have already and making them worth more money. The great thing about having your own business is that you can decide what your salary is. Money is infinite when we aren’t making it for someone else.
Correctly valuing how much your time and energy is worth will allow you to stop working before you hit the point where your productivity starts to decrease. The knock-on effect of this is that you’re less likely to burn out and more likely to feel in control of your business and schedule. You’ll feel that you finally have the business that you signed up for because I know being stressed out of your mind, working yourself silly, and seeing no results IS NOT IT.
It’s time to start unlearning everything you were taught about money and hard work and take back control of your pricing strategy.
Ways I can support you
I’ve created a Masterclass to teach you How to Make More Money in Less Time. So, if you’re sick of seeing no results, tired of putting in the work but not attracting abundance, and are ready to make a change, then sign up! This will reshape how your view your pricing strategy, once and for all.
Make sure to check out the Bulletproof Blog for tons more information and advice on topics such as financial freedom, attracting abundance, creating budgeting plans that work and so much more.
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