I was talking to a good friend the other day about a business idea he’s been mulling.
He presented his (excellent) plan for the work he’d do, and the clients he’d attract. And then he said, “And I think I’ll just charge a couple hundred bucks for it.”
Because I can’t help myself, I immediately blurted out, “No.”
“What?” he asked.
“You have to charge more than that,” I said.
“But I just want to do work I like with people I like. I don’t want to worry about money.”
“People who don’t charge their true value,” I said, “will always worry about money.”
The phone line went silent, then, as we both pondered whether that was actually true.
And the more I’ve thought about it since, the more convinced I am that it is true, and for several reasons.
But the primary one is this:
If you don’t charge your true value—what the work you want to do is truly worth—you’ll eventually lose that value.
The longer you go with prices that are lower than your perceived value requires, the quicker your true value diminishes.
If you’re a business with top-shelf quality of work, service, and responsiveness, but with bottom-shelf prices, there’s only two things that can happen:
- You’ll eventually go out of business because you can’t afford to support yourself any longer, at the quality you demand of yourself
- Or you’ll just get worse until the prices you’re charging are the prices you’re worth
An amazing business that doesn’t charge enough to be sustainably profitable will, eventually—inevitably—stop being an amazing business.
What started as a business focused on responsiveness will get slower to answer emails and phone calls. You’ll eventually start hearing the voice in your head say things like, “They’re not paying you enough for this.”
Or, “They won’t even notice if this is a day late.”
What started as business with top-of-the-line quality will start cutting back on extras, ingredients, or expenses. The voice in your head will quietly mutter, “These customers don’t even appreciate the good stuff.”
What started as a business focused on being patient, thoughtful, and careful will start rushing through tasks just to check them off. The voice in your head will say, “I can’t spend any more time on this project, I’ve already lost too much money.”
Pretty soon you’ll no longer be that hidden gem, that exceptional deal.
Pretty soon you’ll be just another discount provider, cutting corners wherever you need to, just to get by.
And just try raising your prices then. After you’ve built yourself a reputation for rushing, cutting corners, and being hard to get ahold of.
So if it’s actually true that you want to do great work, at a great value, then you’ve got to charge prices that allow you to keep doing that for a long time. With enough profit built in to pay your expenses, save for downturns and crises, and establish yourself as a credible and quality provider of something people truly value.
You can either charge your value, or you can lose your value.
But you can’t have value and not charge for it.
If you’re annoyed by this, and are looking for some way that you can work with people with limited resources and budgets, because they’re your ideal customers, there’s still hope.
Charging your value doesn’t mean only working with rich people, big businesses, or organizations with deep pockets. You can absolutely work with small businesses, individuals with tighter budgets, and non-profits. And you should!
But you’ll need to narrow down your offering and your ideal client set until you can provide something of extraordinary value at a reduced cost to yourself (in effort, time, or money).
You’ll need to do less, better, than anyone else.
Just what you like doing.
Just what you’re best at.
And just what your best clients value most.
But there is no sneaky secret option that allows you to provide everything to everyone at prices anyone can afford.
People try that every day, and then they go out of business.
Feel free to let others keep trying, while you do the thing that works.
Charge your value, or expect to lose it.