Ep #7 | Price for Profit: Why What You Charge Says Everything About How You See Your Own Value

Welcome to Episode 7 of the Roadmap to Business Success series, our second episode in Quadrant 2 of the Thriving Business Wheel: Keep More | Profitable Operations.

Pricing is one of the most emotionally loaded topics in business. Many business owners, particularly women, are significantly undercharging, and it's costing them not just money, but credibility and energy.

"Being the cheapest in the market doesn't make you attractive. It makes you look desperate."

In this episode, you will learn:

• Why under-pricing harms your profits and reputation: Charging too little signals a lack of confidence, and buyers trust you less when your prices are too low.
• The hourly rate trap: Why trading time for money is a burnout trap, and why breaking free is one of the most important shifts you'll ever make.
• How to price based on outcomes: What is the problem costing your client? What is solving it worth to them? These two questions reframe everything.
• The mindset piece: Why so many business owners habitually undervalue their skills, and what it takes to price with genuine confidence.
• Why discounting is rarely the answer: How habitual discounting erodes perceived value and attracts the wrong clients.
• What to do instead: How tiered pricing lets clients at different budget levels access your services, without slashing your rates.
• Reverse-engineering your revenue goals: Start with the income you want and work backwards to what you need to charge.

Coming Up Next: Episode 8 on AI systems for maximum efficiency. How to work smarter, not harder, using the tools available to you right now.

Join the Workshop: Kate and Sam are hosting Profit Unlocked on Wednesday 20 May, 9–10:30am AWST | 11am–12:30pm AEST 

You'll get 90 minutes of live profitability coaching.

🎟️ Attend LIVE: $89 | 🎧 Replay only: $49 

👉 Register here

Connect with Your Hosts:

Kate De Jong, PhD | Inspired Business 🌐 Website: https://katedejong.com/ 📱 Instagram: @katedejong.inspiredbusiness ✉️ Email: kate@katedejong.com

Sam Morris | The O8 🌐 Website: https://www.theo8.com/ 📱 Instagram: @the_o8crew ✉️ Email: sam@theo8.com

Thriving Business Podcast 🌐Website:   https://www.thrivingbusinesspodcast.com/ 

Transcript

SPEAKER_01 0:03

Hello, everyone. Welcome back again to the Thriving Business Podcast. I'm here again today with my wonderful co-host Sam Morris in Melbourne. Hello, Sam. Hi, Kate. So we're up to episode seven of season two of the Thriving Business Podcast. We are working our way through the roadmap to business success, which is based on our Thriving Business wheel. We have covered off quadrant one, which was all about revenue generation, and now we're in quadrant two, which is all about profitability. So keeping the money you earn and making it work for you. The last episode we did, which was always one of my favorites, was on profit first and money mastery. So if you haven't listened to that one, highly recommend you go and have a listen because Sam walked us through, in layman's terms, the basic um basic mechanisms for making for for having oversight and control of money in your business. Yes. Yeah. And now we are moving on to a very important topic, which is all about your pricing strategy.

SPEAKER_00 1:08

Yes. And I think particularly for service-based business owners, this is a big struggle. They don't know how to price their services.

SPEAKER_01 1:19

Yeah, yeah. Yeah. And I can relate to that because it's something that I've, you know, struggled with over the years. Um, but lots of learnings along the way. And um I find this topic really interesting because it's it's a it's a balance between psychology, confidence, mindset, and actual practical, what will the market pay? What are you worth? Or you know, charging, um charging what you need to charge to have a profitable business and and to um actually be getting paid the value that you give to people. So lots to lots to unpack in this conversation. Oh, yes, a lot. Another big bull to grab by the horns, as Sam. That poor bull getting pulled a lot.

unknown 2:07

Yeah.

SPEAKER_01 2:08

But yeah, so um I um came across some interesting quotes when I was, you know, doing my little research for this episode as we do. So let me start with one of them because I thought it was interesting. Um, if you're the cheapest in the room, you're not seen as the best, you're seen as the most desperate.

SPEAKER_00 2:27

Yes. Agree with that one.

SPEAKER_01 2:30

So a lot of people, you know, especially first-time business owners, think that by pricing themselves lower than the average, you know, competitor in the market, that people are going to come to them. It's simply not true.

SPEAKER_00 2:42

Yeah. And yeah, I think we've all heard the saying that uh entering a price war is a fight to the bottom.

SPEAKER_01 2:50

Correct, a race to the bottom, yeah.

SPEAKER_00 2:53

That's the word, yes. Yeah.

SPEAKER_01 2:54

So we don't want to get into any of those races because we are um rather than competing on price, we want to be charging our value. And it's our job to articulate and show and demonstrate what that value is so that people feel confident in paying for that value.

SPEAKER_00 3:12

Yes. And here's where, as you mentioned, Kate, the psychology takes its first step up to the plate because our own perceived value of a service is quite often sitting well under the market's perception of a service. Okay.

SPEAKER_01 3:32

Tell us a bit more about that.

SPEAKER_00 3:33

Oh, I was gonna- I thought you were just gonna agree with me straight out of the gate.

SPEAKER_01 3:36

No, no, I'm just I'm curious, what do you mean by that?

SPEAKER_00 3:40

Well, what I mean is that, you know, and and this is particularly true for women. It is well documented, well studied, that women often undervalue themselves. And because women are so prevalent in service-based industry that women are going to say, oh, based on value, well, based on my value, I don't value myself very highly. Therefore, I can't price myself very highly. Yes, very true.

SPEAKER_01 4:06

And this is where confidence mindset comes into it so much. Yeah.

SPEAKER_00 4:11

Yes.

SPEAKER_01 4:11

Yeah.

SPEAKER_00 4:12

So we have to get we have to shift this thought process away from what do I perceive my value as to a reflection of what do my customers perceive the value of the service as?

SPEAKER_01 4:27

Yes. And are we articulating that value? Are we showing that value clearly enough, which is the marketing challenges we talked about in the revenue generation? Yeah. Yeah, yeah. So, yes, we have noticed that, um, Sam, because you and I worked only with women for about three years. And while there are some incredibly um confident women out there, you're right, the majority do struggle with charging what they're worth. And especially I find women who are very established in their careers and and you know that they're stepping out of a career where they've got a really good reputation, they're really well known, stepping maybe into the consulting space, don't struggle as much because they've got that sort of confidence behind them. But I I find in a lot of women where they feel like they're pivoting slightly and they're doing something new, suddenly they get imposter syndrome and their confidence goes down. I mean, I've got a lady that uh I know a lady who um came from 25 years in you know, high um level management in in corporate government and now is branched out on her own and feels like she can't pivot into this sort of change management space because she doesn't have the experience as a consultant. And it's like, but what about all the all the times you manage change within the organization? Yeah, and her pricing she was uh charging was not reflecting the value and the experience that she was bringing. So yeah, it's it's it's a problem that a lot of women they undervalue their skills, experience, and thinking that if they're going into business because it's new, that they have to then prove themselves all over again, which is not the case. Yeah, yeah, yeah. So um, yeah, uh whereas um this is this is another really good quote that I came across. If you don't value your time, neither will others. Stop giving away your time and talents, value what you know and start charging for it. Um, yeah, so this whole concept of value um is both an external internal and external thing, right?

SPEAKER_00 6:33

So I think you know, anyone that's listened to uh the other episodes in this series in in season two, I've said quite a few times that uh I've taken for granted things that come so easily to me. And I know that this is a trap in pricing because if if you are working in your zone of genius and it comes very easily and naturally to you, and and it's something you love doing and you want to do, pricing that service becomes a very, very big challenge. That's right. What you have to remember is that the people that come to you for that service, it's not something that comes naturally to them, it is something that they find difficult. That's right. This is where you have to move the value off of yourself and onto the customer. That's right. How they value it, not how you value it.

SPEAKER_01 7:29

Yes, yeah. Yeah, interesting. Yeah, so um charge what you're worth, not what you think people will pay.

SPEAKER_00 7:41

Yes.

SPEAKER_01 7:42

Um yeah, and there's another great quote here. Um the moment you make a mistake in pricing, you're eating either into your reputation or your profits. Correct. Yeah. So pricing is a is is a way that you can really damage your your reputation. If you are the cheapest in the market, there is a perception that you can't be that good.

SPEAKER_00 8:07

Yeah, it it is true. It is true. And you know, everybody is looking for the best service or best product that they can possibly afford. Because it is not, it is also about uh prestige and association for the customers for the clients, you know. They they may be reaching a little deeper into their pockets to work with a particular brand or a particular person or own a particular product because of what they think it says about them. Yes, that's right. Yeah.

SPEAKER_01 8:43

And though, and they're willing to pay the extra because they perceive value. Value is a lot about perception. It is, yes. I can't tell you the number of clients I've had come to me and they've paid 20,000, 30,000 on you know, on a big name in the coaching industry, or and then just been very disappointed with the outcome they've got. But they did they did pull out their wallet and pay that extraordinary amount of money for this group coaching program, and because they perceived massive value in that. So our job as business owners is to help customers see the value of what we provide. And a lot of that's in what we talked through in the revenue generation quadrant around um social proof and credibility, building that up. Um, in any time you're speaking about what you do, you're talking about the results and the transformation you get rather than you know than what you do. People don't care what you do until they understand why you do it and and the place you can get them to, the end destination.

SPEAKER_00 9:46

Yeah. And I I'm sure you've had these calls as well, Kate. You know, like when back when I was coaching and I was doing discovery calls, I I think that I probably had just as many people say to me, that's too expensive, as the people that said to me, Oh, is that all? That's right. Yes. It's very, very interesting. And if you only listen to that person that comes along and says you're too expensive, you are going to undervalue what you do. Because this is all a matter of finding a a match between what you do and how you're positioned and what you're offering and the price with the right people.

SPEAKER_01 10:32

Correct. Yeah. The right people will will see the value.

SPEAKER_00 10:37

Yes. Yeah. And I think it it is very much about, you know, sometimes hanging in there, it can take a little bit longer to start generating those sales and build up momentum so that there's regular sales coming in. But be wary of the price drop.

SPEAKER_01 10:56

Yes, it is the natural tendency for you're right. I've I've experienced it myself in the past, but also a lot of clients, if they're not getting any um traction, they think, oh, I need to drop the price. And that's often not what you need to do. Um yeah, and unfortunately, what I found is a lot of people pick up on the subliminal messaging with privacy, right? If you stand in your confidence with I'm worth one session with me is worth$2,000. You know, if that's if that's what you truly believe, because you might see a um, you know, if speaking of business coaching, for example, you might see a hole in in the business that's costing them$2,000 a month and they you fix that and your your fee is already, you know, returned, you know, straight away. So sometimes um if you feel really confident about what you're worth, the other person picks up on it. And they also feel the the non-attachment. If you sort of say, oh, well, you know, if they say, Oh, I can't really afford that at the moment, okay. Well, come back when you're ready, you know, and and um when you when you have when you are able to afford it, I'll be, you know, I'll be able to um help you then. And and I find that, yeah, as we've talked about this before as well, that non-attachment and standing in your worth and not com not compromising and saying, no, that's that's the pricing. So come back when you're ready, then yeah, yeah. It's it is very I find pricing very closely linked to your own confidence, and that builds with experience and time.

SPEAKER_00 12:25

Yes, it does.

SPEAKER_01 12:26

And I've noticed that myself, my my pricing strategy has increased as my confidence has increased.

SPEAKER_00 12:33

Yeah. Yeah, and that's not something you can change overnight, but so I I understand pricing for your value, pricing for your worth. However, to the person that is listening right now, Cage, who doesn't understand their worth and their value, maybe they're new, and like you say, maybe they are moving into something that is quite different for them. They're not understanding the impact they can make or that, you know, or exactly what it is, you know, how far they can take people. How do you tell people like that to quantify their value and their worth? What steps do you give them? Like, what do you tell them to think about? What actions do they need to take to try and get an understanding of value and worth?

SPEAKER_01 13:21

Well, a lot of the time um I find people in business do what they do in the corporate world. Uh new people new to business, I should say, they they think of, well, what's my hourly rate? And they, you know, they say, Oh, well, I I'm, you know, I think I can charge 200 an hour, whatever it is. Um, but then as you and I know, Sam, charging an hourly rate is a fast track to burnout. And um, you know, yeah, if you were actually able to, you know, we've just come off the back of the profit first conversation about that$200 an hour gets split into, you know,$50 that goes into T-Tax account, another$30 goes into that. And pretty much the actual money that's left over from that$200 an hour that you actually get to pay yourself is minimal, you know. So you've got to get out of that charging time for money. Um, sorry, charging money for time. So sorry, um, to um to actually charging for the value of the the service that you provide. So to do that, um, the steps I typically walk through with a client are what is it costing the client at the moment to have that problem? So say, you know, they're um I'm trying to think of a good example.

SPEAKER_00 14:41

Um Well, we spoke about the business start last week. Why don't we use a uh someone who is offering health and wellness services, for example? Yeah.

unknown 14:51

Yeah.

SPEAKER_01 14:52

So say you've got someone who's got a chronic um condition and they're having to, you know, they they've got doctor's appointments or they've got um, you know, a whole bunch of medical bills that they're spending. Expensive food habits. Yeah.

SPEAKER_00 15:08

There are costs.

SPEAKER_01 15:10

Yeah.

SPEAKER_00 15:10

Buying new clothes because they keep putting on weight. Yeah. Gym memberships they don't use.

SPEAKER_01 15:16

Yeah. So imagine you come along and you have a service that actually gets to the root cause of this chronic health condition. And um the person wants to change this problem so badly that um, you know, if you can help them see that, and if you've got enough social proof to show that work with me and I'll get you to this point where you won't need the gym memberships, you won't need the doctor's bills, because we'll get to the root cause of the problem and we'll solve it. If the person can see that they're going to get that result, if they feel confident that you can deliver that result, um, and they can make an emotional connection to that, feeling healthy again, then what is that worth to them? You know, if that saves, you know, saves them three months of medical bills, then, you know, maybe that's a$3,000 uh program. So, and and maybe you only need to invest five hours to deliver that outcome. But the point is people are paying for the result you deliver, not the time you invest. And that's we, that's the big shift um you've got to make in business is that people are paying you for the result you can get them. And um ideally, the longer we are in business, the less time it takes us to get that result for someone. Um, but you that doesn't mean you charge less. It's because the the value of that outcome is still the same, if you know what I mean.

SPEAKER_00 16:44

Yes. And in actual for in actual fact, it works in the opposite way is that the better you get, uh, the more, you know, and the results are evident, the more you will charge and the quicker you will deliver. And we we have all seen that. We've all followed people whose prices go up and results improve, and you know, it it goes from a six-month timeline to a three-month timeline. And this is how people become profitable. But it isn't about how much time it took the person to get you that result, it is about the fact that you are achieving that result.

SPEAKER_01 17:20

That's right. Yeah, so that that's sort of the the process you've got to work through is how much is this problem costing your customers? How much will they pay to solve that problem? And there is a bit of market testing you need to do, you know, that um some problems people just won't pay a lot of money to solve. And and that's where the whole market validation process comes into play. And um, yeah, but I think definitely it's the key is moving away from charging um, you know, charging trading, sorry, it's trading your time for money. That's the biggest mindset shift you need to make in business.

SPEAKER_00 17:59

Yeah. So what about the people who do a little bit of market research, um, particularly in industries that might be quite crowded, and think that they have to uh use industry standards as a benchmark and price at that point.

SPEAKER_01 18:18

Yeah, well, I know we always use the golden rule, figure out the average competitor pricing and sit 10% above, something like that. Um it's tricky, it's it's not always uh um the right strategy, but in many cases it you don't want to be the cheapest, as we've already talked about, because people will say, oh, well, she can't be very good at what she does, or he mustn't be very good at what he does. Um there there is a there is a point where some people just you know flat out, oh, that's too expensive. And and they don't value, you know, they don't see the value. But again, it really is our job in marketing and sales to to demonstrate the value and build that credibility and trust. But what's your hesitation, Sam, about sitting 10% above the competitors average rate that put competitors charge?

SPEAKER_00 19:08

My my only problem with that is that that that's making the assumption that you are delivering value that is average plus 10%. Yeah. And and what if that average is actually really poor? What if the value at that average point is really not good? Yeah. That because to me, that's like because your pricing is sending sending a signal out to people that this is what you're worth. So if the industry is flooded with cheap people and you tick you pick the industry average, then it it's still not communicating great value.

SPEAKER_01 19:54

Yeah, it's context dependent for sure. I guess the main message with that is um always sit above the average, don't be the average, but um also don't be the cheapest. But you're right. If so you're suggesting that in in some cases you can charge a lot more than the average market rate because you're um if if if yeah, yeah.

SPEAKER_00 20:17

If you have the right offer and if you have the you know the experience or the credentials to back it up, and you know, there's a few ifs that go with that, but but yes, I think there are uh red flags that people need to be aware of if they're just doing this pricing on their own and they're just like, I'll just pop myself in the middle of the market.

SPEAKER_01 20:40

Yeah, yeah, yeah. Yeah. So what's your advice, Sam, in that situation to someone who's struggling to figure out their pricing?

SPEAKER_00 20:50

Well, get some get some really good advice and help from people, yeah, so that you can price properly. And I I think that could you imagine a world we lived in where it was every business owner's endeavor to be striving towards being the best and achieving premium pricing. Yeah, absolutely. And before anyone has a heart attack about, oh, you know, well, that's just gonna get so expensive everyone. No, it's not, because the cost of not having your problems solved and not having things fixed is usually much greater than what you pay to get it fixed. That's right.

SPEAKER_01 21:32

Yeah, and that's that's really the message you need to get across. So, you know, this morning um I was talking to a a man who does really high quality home filtration systems for water, whole house systems. And the reason he um got onto this is because he had um quite severe cancer for many years, and water was one of the things, drinking pure water was one of the things that helped him heal. Um Yeah. And and there's such he said so many people don't realize just the quality of the water you're putting into your body has such a big impact on your overall health. And um so when he, you know, and and he really goes and is targeting that sector, people with uh chronic health conditions, and um because they can really see the value of of doing that as a starting point. So that people will pay um, you know, whatever um price that has on it to get the outcome of healing faster, you know. So it's it's up to us to to help people see the emotional link and and between where they are now and where they could be if they invest in in the product or service that we're offering.

SPEAKER_02 22:48

Yeah.

SPEAKER_01 22:49

Which goes back to everything we talked about in in quadrant one in the first five episodes. Yeah.

SPEAKER_00 22:54

So tell let's let's talk about discounting. You know, the go-to, the go-to button that people press when they get scared when things aren't moving, you know, the sales aren't happening. Discounting. Let's talk about why it's a bad idea.

SPEAKER_01 23:09

Yeah, it it can work for short periods of time. You know, if there's a if you know, if you really do want to get some revenue through the door and you have a product or service that people know is normally this price and you reduce it for a short time, it can be a good way to get fast cash flow. But as a general rule, discounting, yeah, it just devalues what you do and it's not a good idea.

SPEAKER_00 23:35

Yeah, yeah. There, I think there are some really, you know, business-onner beware situations where discounting can really adversely affect your business long term. For starters, you don't want to be the discount business. You don't want to train your customers to always wait for the next sale. That's right. That's right.

SPEAKER_01 23:57

It can be a really rare one-off thing in which it works because people are, oh yeah, okay. Um, but then you don't do it again for a while. You don't want people to like we all know that boxing day sales, and you know, we all know when the typical sales cycles are, so we wait until then you don't want to be in that position.

SPEAKER_00 24:14

No, I think that if everybody could understand that it is much better for your business to deconstruct your offer and and to sell off a portion at a different price point, at a lower price point, because they're only getting a part of your your bigger offer is a much better option than discounting the offer as it stands.

SPEAKER_01 24:40

Yeah. And maybe you and I can be very transparent here, Sam, and talk about the struggles we had in pricing the workshop that we have at the end of each quadrant. And because of all the stuff happening in the world at the moment, the fuel's high, you know, um, you know, the petrol prices are high, the groceries are going up, everything's um expensive, and we're sort of in a fearful state globally. It was, you know, we fell into the trap of thinking cheaper might be better. Well, I did. Speaking personally, you were the one that actually said, um my tendency was to, you know, um was to drop the price given the situation. However, you correctly pointed out that the value we're offering here, they've got access to two of us with 30 years business experience between us. Um, and what's that worth to someone? So in the end, we've landed on 120 bucks for a ticket to come to our workshop, but you get live coaching specifically on your business, and we're limiting it to 10 people because we want to be able to make sure the people on the call get the right um attention. You can also sign up for the replay and um and get that too. But it's what I again, it's the question: what is that worth to someone? If they spend 120 bucks, what is that worth to them in their business? They could crack their marketing code, they could figure out their own pricing strategy, they could figure out how to, you know, productize their services. You know, there's so many, so much value they could potentially get that it gives them the ability to generate revenue. So yeah, I guess that's speaking to your point about don't discount. It's you've always got to look at what's the value of this to the customer.

SPEAKER_00 26:26

Yes, yes. And I I love this. I'm gonna pick out this word that you have just used, Kate, and that is potential. We are all with in the service industry, I think we are all selling potential, aren't we? Potential to achieve something. Yep. You know, we often talk about, you know, sell a transformation in your marketing, but we're we're we're selling the potential of a transformation. That's right. And so I I think people need to recognize the potential for their own business. And when they can recognize the potential, then that's when they will part with the money to have the chance to achieve that potential.

SPEAKER_01 27:05

Yeah, they can recognize the potential and they trust that you will deliver the that potential for them. Yes. Yeah.

SPEAKER_00 27:12

And I think I and look, we we've had many discussions over the years with different products that we've, you know, like different offerings that we've created and and sold. And you know, I think uh the the price conversations that we've had previously over the years, they're always fraught with danger about trying to anticipate what this, what the value is going to be. And that's why I think this is that you know, pricing strategy is a very, very difficult, difficult one to nail straight away. Yeah, I think people have to accept that it can be a bit of a testing ground.

SPEAKER_01 27:51

Yeah, and it and it is we're testing all the time with pricing. And I've got a client at the moment, he's a residential designer, and he's typically previously been doing what the market does, or so his competitors do, which is charge a fee for the design portion. So they typically charge around$5,000 to draw up some plans for a home renovation. But um he came across a competitor that's doing three and a half percent of the whole build total build price. So suddenly it goes from a five grand job to a to a 20, 30k job to do that um design work simply through a pricing structure change.

SPEAKER_00 28:32

Yeah.

SPEAKER_01 28:33

And he suddenly goes from trying to juggle 10 clients um a month to juggling two a month, but getting charged, but getting paid double for less work. So sometimes that's simple, and and he's in the process now of testing that that pricing change. And he's so busy with because he's so cheap, charging just five grand for you know design plans, he's got a lot of customers, but he's burning out, he's working 12 hours a day or more, working weekends, it's not sustainable. And um, and then when he, you know, we had this conversation, he said, I just saw my mate down the road. My competitor is doing this, and we're like, well, let's test it out. And um, so he's tested it out, and I don't um I suspect it's not going to be a problem because again, it's perception, it's how you present something. In this case, he's saying, Oh, it's five thousand dollars for me to do the drawings for you, or I only charge three and a half percent of the total build price, which seems like a really small um percentage, but it's a really big number, right? Yeah, yeah. And people don't balk at the if they if they're spending, you know, 700,000 on a um a home upgrade or more, um, then suddenly three and a half percent seems like, yeah, sure, that that doesn't seem unreasonable.

SPEAKER_00 29:54

Well, look, the real estate industry has been using that methodology for however many years forever.

SPEAKER_01 30:01

That's right. And so that's another part why people don't bat an eyelid, because that's typical for what real estate agents do. And so suddenly he's and and and he said, you know what, I'm so busy at the moment, I don't actually care if these he's he's put out quotes for two or three people with this new pricing structure. And he said, I don't care if they say yes or no, because I'm so busy I can't take them on at the moment anyway. And I said, that is the perfect time to test because all you need, you there's no attachment, there's no um, you know, if they say yes, it's a bonus and you can book them in for two months' time when your workload drops off. But um that is the best time when you don't need the work to test your pricing strategy. So I'm so excited for him to see if and I have no doubt it'll work because his competitor's doing it fine. And yeah, but we do it. Um that has sort of kicked off a process of him now having to elevate all his branding and marketing because his competitor does look more shiny and polished online. Um, so he's having to elevate and he's getting new headshots done, and you know, so it's a whole now he's really leveling up and and elevating to that next pricing structure. But sometimes simple things like that um can make a huge difference in, you know, just pricing using a different pricing structure, a massive difference in your bottom line.

SPEAKER_00 31:20

Yes, absolutely.

SPEAKER_01 31:23

Yeah, so that's a great example of where just thinking outside the box, uh, and then again elevating your whole approach and look and style and online visibility to match this new level level that you want to play at. So I think we sometimes do, when it comes to pricing, think too small. Um, you know, a lot of it is is our own um self-confidence or or you know, what's the what's the quote? The only limits are the ones in our mind. Like correct. And we had the same conversation, Sam, in trying to price for our upcoming barley retreat. Yes, yes, we did. Another example of where I was saying, well, you know, maybe we should put it a bit lower. And you're like, but they're getting two days of private business coaching. What's that worth?

SPEAKER_00 32:10

You know, and um Yeah, I yeah, exactly, Kate. Uh, because I was like, well, you know, if if you paid for a VIP day, how much would that cost?

SPEAKER_01 32:20

And you know, plus you've got your accommodation and your food and it's the experience itself is wonderful, and yeah, and getting all this, um, you're getting a container to do this transformation in your business. And yeah, that could potentially mean 50,000 a year or more in revenue. So what's five thousand dollars on a retreat? Four and a half if you're if you get the early bird, just exactly get yourself a bit of a discount.

SPEAKER_00 32:50

Yeah. And and we've we've also um added into that uh, you know, uh two offers for the retreat, too, because there is the bonus VIP, Dave. People want to add on to that, you know, and and stay an extra day and get get highly focused attention. But yeah, the all this is crafted not inside a vacuum, but it has to be very open and allow all of the these external things to influence the way you pull of this together, right? Yeah, because it's not just about sticking a price on things.

SPEAKER_01 33:26

Yeah, and we've to we've covered the topic of productization in a pr in a previous episode, which is where you offer different pricing options depending on people's budgets or where they're at. Or um, yeah, and in our case, um, you know, we've got the early bird discount because time-sensitive discounts do actually work to get people to make a decision. So, you know, we've we've offered it to the first five people that sign up, they get a$500 discount. So that just means that those that are keen and they sign up, they'll save themselves$500. And that that that genuine time sensitivity does work as a motivation for people to make a decision. Yes. And then, yeah, like you say, we've got different options. You can do the basic retreat, or you get the VIP day where they get access to to you know private coaching. So the the weekend will be group coaching, but then they get access to one-on-one coaching. So um having different tiers for what people um want, and yeah, that's also a really good, a good pricing strategy. And yeah, again, you know, when we looked at what this what the value of this retreat is, actually, you know, we it it's at least sort of a 30 grand value minimum, and then we're charging five. So again, it's what's the value to the customer? It's not what will the market pay, or people will pay for value they perceive, right? So yeah, and there was another quote someone wrote here increasing your prices is the fastest way to increase your profits, yes, absolutely, without working harder. Um, like this, yeah, like the the drafty example is great example of that, just change your pricing structure. Um uh the other one was um uh price is what you pay, value is what you get. Um yeah, and so people have to see the value, but as we've said, value is a perception.

SPEAKER_00 35:32

Yes, yes, it is, and I think I I had a train of thought thought before. What was it about pricing? It'll come back to me. I hope so. What a time for it to escape.

SPEAKER_01 35:47

Yeah, yeah, because we're coming to the end, but I I hope that we've covered off on uh most of the um, yeah, we've talked about the hourly rate trap. Don't do that, it's the fastest way to burn out and and not get anywhere in business. Um, equal exchange. Money is simply an exchange of value. If your value is high, your price should reflect that without apology.

SPEAKER_00 36:08

Yeah.

SPEAKER_01 36:09

Um, yeah.

SPEAKER_00 36:11

Um I think there's a there's a very, very good exercise people can do that will either red flag or green flag your pricing, I you know, the ideas you have about pricing in your head. And um, and this is a good one. So if you think about what the next 12 months in business looks like for you and how much money you want to make, because you but you know, there is often a disconnect here. People say, Oh, it'd be great if in my first year I can just get to six figures. Okay. Pick up your product and the price you think you're gonna sell it for, and by product I mean product or service, and then multiply that by how many times you're gonna have to deliver it to achieve that six-figure business.

SPEAKER_02 36:56

Yeah.

SPEAKER_00 36:57

Because that'll straightaway tell you whether this is all a possibility or you're dreamy.

SPEAKER_01 37:03

That's right. That's a very basic um calculation every new business needs to do. It's like, okay, I want to make this much money. Okay, well, based on my um, we probably should have mentioned this at the start. It's quite important. We'll have to tell everyone to listen all the way to the end. But um, yeah, what's your pricing strategy? What's your revenue goal? And exactly how much do I need to sell, or how many times do I need to deliver that service to make that um a reality? And if it means that you're having to work 18-hour days, it's not the right pricing strategy, or you're not going to make that much money. So that's a really good point. Reverse engineer, um, figure it out, and figure out what how many hours you are willing to work and what you are willing to charge in order to make the money you need. And for some people, it's it's a um, you know, it's not a um what's what am I trying to say? It's a non-negotiable. Some people have a revenue target they need to to make for to pay their bills, to cover their costs, and and therefore uh, yeah, you need to price in a way that you can reach that target. So yeah.

SPEAKER_00 38:14

And yeah, and please do not do that equation by simply dividing by 52 weeks in a year or whatever, um, or thinking, oh yeah, 38 hours a week. No, because you cannot like if you're delivering 38 hours a week, you're not working 38 hours a week. As a business owner, there's other stuff you've got to do. So you've got to think realistically, I I can actually spend 20 hours delivering because I'm gonna need three hours of marketing and two hours for this.

SPEAKER_01 38:48

And exactly right.

SPEAKER_00 38:49

You cannot, as a human being, work 52 weeks a year, 38 hours a week, 40 hours a week, 60 hours a week. You've got to, you know, be realistic about this. If you have kids, you're gonna have to have time off because they'll get sick. And you've got to block out some time for yourself to have a break.

SPEAKER_01 39:09

That's a really good point. A lot of people stepping out of corporate think, okay, well, um, this is my what I'm gonna charge, and I'm gonna be working 35 hours a week. And you're like, okay, so where in that week are you gonna be doing your marketing, your networking, your product development, you know, your um, and you've got your family. And you know, yeah, it's just not realistic. And a bit like the um, you know, when we're talking about profit first and um you've got the different buckets, it's the same with your time in business. You don't have a hundred percent of time to dedicate to revenue generation. You've got to be doing all these other things, you've got to be managing your business, you've got to be um, you know, doing all the business development and and and the marketing and the sales and all that stuff. So you can see why it's challenging in business.

SPEAKER_00 39:59

You've got you know and I think you know, and and it's reasonable for people to be making these mistakes, particularly when they've stepped out of any type of employment, because in employment uh you are paid for the productivity hours, yeah, and somebody else is taking care of all the other stuff. Right. Yeah. So, you know, we've got to switch off the employment brain.

SPEAKER_01 40:27

Yeah, which is why charging charging dollars for time is just does not work in that scenario because yeah, if you're only working 10, 12, 20 hours a week of actual revenue generating time or less, um, yeah, you've got to have a really high hourly rate if if that's gonna work. Yeah. Yeah. So the the moral of the story um is um charge in terms of the value of the result you get your clients. And however you um and you know, choose to determine that value is up to you, but there is also a perception, you know, that you need to build with the client about that value, also, if that makes sense. Yeah. Yeah.

SPEAKER_00 41:14

Yeah. It's um it's it's there's no quick clear-cut formula for calculating pricing. No. But there are certainly parameters which you can use to guide you to the right price.

SPEAKER_01 41:28

Yeah. And if you if you want our eyeballs on your pricing strategy, come along to our workshop in May where we will be providing um live coaching for you to, you know, get all, you know, any any questions you have, Sam and I will try to guide you to get the the right pricing strategy for your business.

SPEAKER_00 41:49

Yeah.

SPEAKER_01 41:50

I'm excited. I am too. All right, everyone. Well, I hope that was valuable. Any closing comments, Sam? Uh no, no, I don't think I do today. I think we covered it all. We we got the gold out just right at the end there.

SPEAKER_00 42:06

Yeah. Better late than never.

SPEAKER_01 42:08

That's right. All right, everyone. Well, we look forward to seeing you um in the next episode, which is going to be super exciting, all about AI systems for efficiency. So stay tuned. This is gonna be a big one. All right, everyone. Thanks so much. See you next time. Bye for now. Bye bye.