Why can't we ask for what we are worth in our businesses?
Disclaimer: This is all based on my personal experience selling handmade since 2012 and running a service since 2016. I am not an expert and I’m sure there are many schools of thought on pricing that are different than my experience! You have to do what’s best for you!
No business can survive if they are they are consistently undervaluing and underpricing themselves. As small business owners, correct pricing is even more important. We generally do all our work ourselves and if we are selling ourselves short than we are wasting our most valuable resource: our time. You can’t stay motivated to run your business if you are underpricing yourself and simultaneously running yourself into the ground trying to stay afloat.
One of the main reasons we underprice ourselves is because we just don’t see how anyone would pay what we really think we are worth. In the poll I posted on the Doing Business and Raising Babies Instagram, 85% of you said that you struggle with how to price your products or services and 92% of you said that the reason was because you didn’t think people would be willing to pay what you’d like to charge/need to charge.
So where does this idea that no one else will value our services or our products for what they are worth come from? Why do we constantly undervalue and under pay ourselves? Studies have shown that one of the main reasons for the ever present wage gap between men and women is that men will ask for what they want (even if they don’t really deserve it!) and women will go above and beyond doing the work, but won’t ask for what they are worth. While this is meant to apply to a professional, corporate world, could these same factors be affecting us as small business owners who are women? And if so, what can we do to get past this idea that we should take less than we deserve?
I recently adjusted my prices in both my handmade shop and my pet sitting service so I’d like to use those as examples as to why this idea of people being unwilling to pay appropriate prices isn’t necessarily true. In my Etsy shop, I sell hand embroidered items. Most pieces don’t take a super long time to make and I feel they are priced appropriately already. However, one of my most popular items (especially around holidays) is embroidered children’s art keepsakes. For the last two years that I have been making them, I had prices set on embroidery size only. So a 6 inch piece was $40, an 8 inch piece was $50, and a 10 inch piece was $60. The huge problem I ran into was that some people sent in artwork that was very simple and took 1-2 hours to complete and some people were sending in super detailed full color drawings that sometime took up to 10 hours to create. I was selling a product for $40 that varied in time commitment between 1 hour and 10 hours and yet I still thought that raising my prices to account for that was somehow greedy and no one would pay for it. After all, I’d rather make a $40 sale than no sale at all. After a busy Christmas season (my first working with a baby at home) I decided enough was enough. I needed to value my own time. I went through and repriced based on both size AND detail of drawings, giving separate prices based on whether they were ordering a simple line drawing or a full color piece. Just a few days ago, I had a repeat customer contact me about doing another and it was the first time I had to give my new prices. I was 100% convinced she would balk at my new pricing structure, the new piece she was requesting would now be more than double the cost of the piece I had made for her a year ago, but I sent her the quote and explained the changes, and she replied “Sounds good!” I was blown away. I asked for an appropriate amount based on time and didn’t lose the customer. It was eye opening.
Moving on to a service based example, when I first started taking pet sitting clients in January of 2016 I picked my price of $12 for a 30 minute visit because that was what I saw other people in my area charging. When I got my first call from a potential client, I was so excited and so worried that she would think I was too expensive, that I told her I would do her visits for $10. She was a 3x per week client for 7 months so I lost all that potential income during that time. My thinking that she would think I was too expensive didn’t even make sense, after all, she had already seen my website and my prices and called to set up a meeting. Luckily, I only made that mistake once. Still, over the next two years it became clear that my pricing model wasn’t the best. Sure, $12 for 30 minutes seems like a lot ($24/hr?? Sign me up) but when I had set my prices at the beginning, I forgot to take into account something important. While yes, I was only actively working at the clients house for 30 minutes, I was also commuting to and from. If they lived on the other side of town and it took 25 minutes to get there, by the time I got home I had now invested 80 minutes into completing this job. Now, $12 for an 80 minute commitment didn’t seem so great and sustainable. Once more, I ran into the fear of raising my prices and losing customers. So I kept my prices for two years. Again, the added responsibility of working with a baby made me finally open my eyes and say it’s time to ask for a more appropriate price. So I sent out a letter in December detailing my new pricing structure and told everyone that it would go into effect January 1st, 2018. My worry that I would lose my customers was again unfounded, and when the change was make I only lost one. You can’t let fear keep you from asking for what you’re worth.
What I’ve learned from my experiences is that you can’t underprice yourself thinking that means customers will choose you because you’re the cheapest option. This can backfire and people will think that your product or service isn’t of good quality. You also can’t price high to make your service or product look like the best unless you’re doing something to make it worth it. For example, when I raised my pet sitting prices after two years, I sent a letter announcing the change and highlighting all that I do to give them the best care and best service around. Something like taking a pet First Aid/CPR course doesn’t cost much ($65 every two years) but it adds tremendous value because I now have skills that others may not have in case of an emergency and it lets people know that I take my job seriously and don’t treat it as just a fun thing to do (even though it is fun!). You can add value in a number of ways that don’t have to be expensive. Up your packaging game. Let people know they can contact you with any concerns or questions (you might already be open to this contact but you should say it!). Include a handwritten thank you note in your packaging. When photographing your products, style them a little more so that they are presented in as nice a way as possible (you can have an amazing product but if you have a poorly edited product photo, no one will be able to tell and therefore they won’t believe you when you say it’s high quality!). Highlight any certifications or training related to your business, even if you have had them the whole time, if you don’t tell and remind your client base, they won’t know and with that extra knowledge they will see how valuable your service or product is. Providing amazing customer service can go a long way when showing the value of your product or service and it doesn’t cost you money! Sit down and look for ways that you an add and show the value of what you are providing to let people know that you really are worth what you’re asking.
There are many things to take into consideration when coming up with your pricing. I am not a fan of traditional pricing calculators because I don’t believe there is a one size fits all formula for something as complex as this. Only you know the specifics of what your business requires and only you know what factors to take into account while choosing the best pricing structure for you. The Mother Run business planning workbook includes an entire section on this and you can get that section as a free pdf by clicking here.
I would love to hear your stories about your struggles with pricing. Leave a comment below or shoot me an email at email@example.com. I hope these workbook pages help you and I hope that you are finally able to ask for what you truly deserve and are worth! Don't do yourself a disservice by undervaluing what you have to offer!
Yours in business and motherhood,