Teachers in Business

How to STOP Underpricing Yourself

October 12, 2021 Sara Torpey Season 1 Episode 45
Teachers in Business
How to STOP Underpricing Yourself
Show Notes Transcript

Underpricing is a lose-lose. 

You lose because you don't make the money from your business that you want (and deserve!), and your clients lose because they aren't getting the BEST possible version of you (the one where you feel amazing about your business, your life, and your work!). 

And here's the craziest part - when you are NOT underpricing yourself, it's actually EASIER to make money and sell your work... sounds crazy, but it's 100% TRUE. 

This week I'm going to share 4 simple ways that you can use RIGHT NOW to stop underpricing yourself. 

You can use these to start making more money in your business and to feel absolutely certain that the money for time tradeoffs you are making are WORTH it today!

Join the webinar: https://us02web.zoom.us/webinar/register/WN_dpWeLRkTSVaR1UuZhzlKAw

Book a free call: https://calendly.com/torpeycoaching/letstalkcoaching

Welcome to Episode 45. This week we are going to start talking about under pricing. Under pricing is one of the trickiest things that people come up against in the world of running a money making business, right? It is this dangerous thing because we feel like we charge less, it'll be easier for people to buy what we have. And if we charge less, you know, it'll be harder for them to say no, and all these things. But actually, none of that is true. What's really interesting about under pricing is it's a lose lose, it is a loss for you, as the business owner, because you don't get the money that you want from the equation, you're not making the money you need in your business, you're frustrated, you don't feel like your time is being valued. And then it's also a lose for the person you're serving. Because they're not getting the version of you that is like absolutely over the moon, with the what you're being paid with all these things. And that's not to say you're going to show up like cranky, or you're not going to give them the best service you have. It's just, it's a whole lot easier to show up in love what you do when you're making the money you want than it is when you're like, gosh, but like I feel like I should be making so much more than $20 an hour right? It is under pricing and changing pricing. So it's based truly in the value your clients are getting from the work you do is one of the things my most successful clients do. This is something they figure out that they really work to get straight, because it's really about their mindset, how they think about money, and how they think about the value they're giving other people. This is one of the big differences between my most successful clients and and other businesses is that they have given up on underpricing themselves, they are not here for that. This week, we're going to talk about four strategies. four ways to think about this so you can stop underpricing yourself like today because it really does such a disservice to you and all the people you serve. Under pricing is not you showing up at your best it's just not and I know like, like people argue this with me. But it's just not like it's there's no version where we are happiest when we're not getting what we're worth. We would rather show up thrilled, right for all the money like that would be way better. So strategy number one is to stop thinking about how much it costs you to do. Stop thinking about what you feel like they're willing to pay, take the word affordable and throw it out the window. affordability is an opinion. It is your judgment. And you thinking to yourself, well I want this to be affordable for them. Is you judging whether or not they're going to pay what you're worth, it is none of your business. If it is affordable, affordable isn't a thing, affordable is in the eye of the beholder. You know, it's like Starbucks, some people would rather die than pay $5 for a cup of coffee. Some people do it every day. It's affordability in their view on affordability that really makes the difference there. So if you're thinking, well, I want my pricing to be affordable, it is time to let that go because it's garbage. That's you judging. Instead of thinking about it that way, think about what you're offering and what that is worth to your clients. Like I offer business coaching. So when I work with clients, what they get is a sounding board to bounce all their ideas against, they get somebody who's experienced who's made all the mistakes, who seen all the mistakes, who can say to them like Oh hey, you know what, if you go down this route, this way you can try it. But here's what's most likely to happen like let's rethink this. They get someone who can teach them the new skills they need, help them to practice help them get out of their own way. And for them, you know, that can be worth in their business 10s of 1000s of dollars, it can be worth hundreds of 1000s of dollars over time, just in dollars. But it's also like I have a client who gets on every week who's like this is my favorite hour of the week. I feel heard in that is life changing. So I'm going to price what I do based on the difference it makes for them based on the impact for them rather than on my feelings of affordability for that. I am not going to like price it at a million dollars because I you know there is some room for realism here but there is Not, you cannot just sit in affordability. The other thing that people say to me all the time is I have one client who started with bright, but the thing I'm doing for them, it's so easy for me to do. Yeah, it is, that's why it's your superpower. But it is not your clients. So think about something that's really hard for you to do, that you get help with, that you've paid for help with and how freaking happy you are to pay that person. Right? Like, there are a couple of things like I actually had a consultation today with someone that's helping me pick out new glasses, in new frames, we did it over the internet, I am she was like, it's gonna be $150 for the consultation, and that we'll talk about the glasses afterwards. And I was like, Sure, I will give her whatever she wants, I want to be happy with the glasses that I'm going to need to wear every day. That is life changing for me. So I'm willing to pay that I'm willing to I was like, sure, great here, here's my card, like I couldn't wait to pay her. And that's the thing. It's easy for her. But it is worth it to me. Think about that as your pricing. The second thing that can help you stop under charging is to actually calculate your like real, real hourly rate. Because here's the thing that we do, we think like, Oh, that sounds affordable. And you know, that sounds like the price I want to make it. And we just leave it there. And then we don't ever stop and go like, okay, so for every person I work with, that's going to be 10 hours. So if I charge them $400 for this work, and it's going to take me 10 hours to do I'm getting $40 an hour, there are so many cases where clients have said to me, okay, I'm going to start this new package, I'm going to build this new service, here's what I'm going to charge for it. And I've said to them, okay, what's the hourly rate of that? They'll say, Oh, it's gonna be $1,000 it's gonna take me 20 hours of work. And we do the math, and they're like, Oh, that's I don't want to make that per hour. Like, that seems crazy. And the problem is, is that most of the time, you know, we're not thinking like, Oh, you know, if I do it like that, I'm making $50 an hour, like I and then when you get down to that calculation, you're like, why time is worth more than $50 an hour, you guys crazy. And so when you actually do the math, and a lot of cases, especially for my clients that run some kind of coaching or tutoring business, when you get down to like, well, it's gonna be a $600 package, and we'll meet 10 times, it's like, well, but yeah, it's $60 an hour, except you're doing prep work on either end. And if you do a half hour of prep work every week, we're like, all of a sudden, the rate is like plummeting. So you really do want to have a sense of your, our, our, our hourly rate, and keep it in mind like you are worth more than $30 an hour, there is no one listening to this. Truly, that isn't worth more than that. If they're running their own business, like you have skills, people should pay for them. As the meme on the internet goes like it took me 15 minutes to do this for you today. But 20 minute, 20 years to learn how to do it that fast. So they mean to pay for your experience and your expertise. It's not just worth $30 an hour. The third thing to think about is to consider the full range of what people pay for what you offer. Like I think people who tutor are a good example when you do some level of tutoring or student coaching, because I have a lot of listeners that do that. And a lot of clients. You know, there are people out there on the internet tutoring and coaching right now for $20 an hour for $10 an hour for 15. And we think about ourselves in relation to them. And we think like, Oh gosh, but if I charge 50 or 60? Like I'm so much more expensive? Well, yeah, because you were worth so much more. But that's a whole separate conversation. What we don't think about is what is at the other end of the equation. So for every person, every 10 people maybe charging $20 an hour, there are probably two or three, charging two or 300. Maybe you don't want to go that far. But it is entirely possible that you are somewhere closer to the middle. But when we don't think about the full range of prices at either end, when we don't think like Okay, wait. Like for coaches, it's the same. I know coaches that do six month packages that are 15 $100 that are $3,000 that are whatever. And I know coaches that do six month packages that are $50,000 and then when I think about my pricing in the middle of that full range and my full understanding, it's like oh, well then I'm not out of scale. Like we think we're out of scale, because we only think of what's at the bottom, we don't think about the top, but the top is there and it is higher than you think. And when you think about it in scale, suddenly it doesn't feel so outlandish for you to be charging $150 an hour, or $200 an hour for what have you. It feels like oh, well, I'm charging $150 an hour, there are people out there charging four or $500 an hour for their time. This is not crazy. People pay for this. And really the other thing to think in the same bucket is like, there are a limited number of people you can serve. So if you think about how many people you could possibly serve any year, like for me, it's probably 30 or 40. What you say when you're like, well, but there are not going to be another people enough people to pay my rate, like I'm going to charge $200 an hour to do this coaching, tutoring whatever with students, and there are not going to be enough people to chart pay my rate. What you're saying is that there are not 40 people on the planet. Who would pay for that. And that's insane because there are 3 billion people in tons of families who need you. So when you're downplaying what you are willing to take when you're under pricing, what you do basically is, is say like, Oh, well, but I have to be open to more people, because there aren't enough people that would pay me at this price when there are like, it's just bad math. And here's the last strategy. Honestly, if you're listening to this, you probably know you're someone that under prices, you know, you have a tendency to under charge for your time and your value and you're thinking about it.

 

So the easiest way to change this is to add 10% or 20%, even to what you're charging right now. Like I would say, maybe 70% of the time when new clients start working with me, the first thing we do is raise their rates. Not every time depends. And sometimes we do it slowly, like we make a plan to do it slowly over time. But like I was talking to a potential client a couple of weeks ago, and she said to me out, you know, I've been doing some consulting, too. And I said, Oh, what are you charging? She was like, Oh, I'm doing I forget what kind of consulting marketing me social media, something like that. And she was like, Ah, you know, I probably undercharged, I charge $50 an hour? Holy moly, yeah. And I said, you know, like, we probably need to double that, at the minimum. Because the average growing rate for like a marketing strategist and marketing consultant, a social media consultant, is closer to $200 an hour. So the people that you're that are paying you are like holy crap, like, this is great, because they know how good she is. But also she's like, Ah, yeah, I didn't do it, right. And she's not feeling as good about it. That time, money trade isn't as good as it could be. Because she's not winning from it, everybody should be able to feel good about it. And that includes you. So it's entirely possible that you could add 1020, even 50% to your rate right now, and get closer to where you should be. It is okay to raise and there are processes, you know, it's pretty simple actually, to raise rates, and to talk to your current clients about it when they renew or the next time they buy a package or whatever. People spend a lot of mental time and energy thinking through, like, how do I raise my rates, when actually most of the time people are just like, Okay, cool. It is not as complicated as it seems. So, stop under pricing. That is the lesson for today. Take what you need from these strategies today. And let me know how it works. Like Tell me about how you're raising your rates. Because when you get paid what you're worth, you get to do more good in the world. When you are valued when you are paid your value that good spreads, your abundance creates abundance for others, this is the lesson right? So you are getting paid more allows you to pay other people more allows them to pay other people more. It is a virtuous cycle. It is not a cycle we should feel bad about. Like we have to get out of our heads, this affordability, the guilt the rest of it, none of it belongs here, let it go. And if you need help figuring this out, this is hands down. One of the most common things new clients come to me for help with pricing is is feels like a really big thing, but can be very simple to both change, adjust and make make you feel much, much better about it is not a complicated problem to solve. And I promise that we will solve it really quickly in your business because it really does and then I'll listen I'm not going to force a price on you. But I will help you come to something you feel really good about and your clients also feel really good about and that's important. If you have questions Please ask you can email me at Sara at Torpey coaching comm you can come to my website and book a time to have a free console call you should especially if you want to talk about pricing and how your pricing is impacting your business. And then if you are not in my free Facebook group, today is the day to join. There are all kinds of resources in there. And you should come play because it's full of amazing former teachers just like you and what better group to be in. I can't wait to hear how your pricing goes and I will talk to you all next week.