· 10 (More) Reasons Why Your Business is Tanking.
1. You’re scared to charge what you’re worth.
Number 1 is the biggest failure point that I’ve seen otherwise good business owners make. Think about it. Your plumber won’t show up for less than $70. Neither will your electrician. They’ve perfected their craft, licensed, and insured themselves. How many hours of you screwing up the job is a one-hour, $70+ visit worth?
Playing music for weddings is similar. I haven’t played one in a while, but my rate was 2-3 times the going rate for a church service. I always showed up for the rehearsal (to lower the risk of surprises), and often ended up buying additional music for the service.
I’ll make an exception for charging less than the going rate. I will provide my services for free. That means that I know you well enough to give you my services as a gift, or you represent a charity that I would like to donate my time to.
Don’t muddy the waters by doing a “favor” and charging less. The recipient will still have had to pay you, and won’t see the benefit that you provided as you do. At the same time, you will have received less than your normal rate and not necessarily receive the amount of goodwill you expected.
Charge what you’re worth. If you’re not worth a reasonable rate, then you probably shouldn’t be in that line of business, at least for yourself.
3 responses to “Read · 10 (More) Reasons Why Your Business is Tanking”
Agreed. If one is substantially less than market, one is probably delivering poor service. You get what you pay for. As a consumer, price let’s me know up front what the quality will be. Sometimes I want top quality, sometimes average, never poor. I love Highland Cleaner’s motto: We don’t discount quality. I like your idea of charging market value and cherry-picking pro-bono projects.
Thomas and Mike, “you get what you pay for” is definitely a true adage. And it’s psychological too. If you are charging too little, you typically don’t feel like you are very valuable and tend to offer poor service as a result.
Just my two cents…
Thanks for mentioning our post.
Jason M. Blumer, CPA
Great post Thomas.
Very insightful and useful for freelancers and consultants.