5 Reasons why you need to choose your pricing carefully when you start a business
When you start a business it always seems the right thing to undercharge for your products or services. Lots of customers paying a low rate is better than none, right? This might be true at the start, but not charging the right price from the beginning can have a negative impact on your business further down the line.
1. Cheap fees turn people away
Most people think high fees turn away clients but actually, it is low fees. If you offer an amazing service for a very cheap price, people will think there is something wrong with you.
They might think you are a brand new business so don’t have any experience or that you are desperate for business. This will cheapen your brand and people will walk away.
2. You will attract the wrong people
The people who choose you because you are cheap will take advantage of you and push the limits. These are not the people you want to work with long term. By charging a good price, you will attract people that can afford you and see the value in your work.
It might take longer to get to these people but in the long run your business will thrive.
3. People will refer you based on your price, not the quality of your work.
If you are cheap then people will refer you, which is great in terms of work but at what point do you break the chain? At some point, you will need to tell someone that you have raised your prices and that could be awkward.
4. Cover sickness and emergencies
They say there is no security in self-employment but you can create a little bit of a safety blanket with your pricing.
Raise your prices so there is enough room in your budget to send work to a freelancer if needed. Whilst this might not leave you with much profit from that job at least you will not be letting your customer down.
5. Give yourself some security
Running a business brings the insecurity of not knowing what money will be coming in so by charging a little more you can put some money aside for those quiet periods.
So there you have it, now go and review your pricing and make sure you are charging your worth.
