Six Questions to Ask Yourself to ‘Charge Your Worth’
When you’re advised as a business owner to “make sure you are charging your worth”. This can be one of the most confusing and unhelpful pieces of advice out there when it comes to valuing yourself, determining pricing, and ultimately setting up your business money mindset for profitability.
The problem is that the concept of “worth” is totally subjective – is it just what someone will pay if you fake super confidence and hustle hard enough? And how will you even know if you got it right?
Plus, it can feel over-simplistic and unhelpful when it comes to your own unique situation, your market, and your stakeholders.
And don’t forget those pesky feelings of self-worth and imposter syndrome that creep in and make you doubt your own value! Especially if you have dealt with prospects helpfully telling you you’re too pricey.
Six Practical Questions to Ask Yourself
I have a journalling exercise to help you get a feel for how well you’re current pricing model is doing justice.
So grab a notebook and pen and jot down your thoughts on the following 6 questions.
- What are the costs involved in delivering this offering(s)?
When evaluating your pricing it’s important to ensure you are factoring in ALL costs of providing that product or service.
Dependent on your industry this might be your time, freelancers/outsourced services, shipping, materials, hire costs, consumables and more…
These costs should (ideally) be covered profitably by the amount your clients pay you.
2. What are ALL my costs of running this business?
Next think about how the pricing of what you offer has to cover ALL your overhead costs to run your business.
Here there will be lots of ‘hidden’ ones… such as admin, insurance, subscriptions, accounting and many more…
Check through your accounting records or from memory and list them all out you’ll be surprised just how many there are!
3. What are my unique skills and expertise?
For this one you simply list out all the elements that make up your unique skill set, experience and knowledge.
If you get stuck you could perhaps think about what you do in a typical day or week – and then list out all the skills needed to deliver those activities and tasks.
It will likely be quite eye opening to reflect on just how special what you offer is!
4. What have I invest in, in terms of training and qualifications?
When you took professional exams, industry specific training and courses you very much invested (time and money) in elevating your earnings potential. Enabling you to stand out and to provide long term stability.
Often once attained these qualifications have ongoing obligations such as subscription fees, CPD requirements and adherence to standards.
So when setting your prices consider all you invested and continue to invest in these attainments.
And what your clients therefore benefit from because of this – in terms of quality, credibility and service level.
If you didn’t take any particular industry specific qualifications to enable you to provide what you offer, you could also think about the transferable skills you have from other areas you’ve worked in or studied in or simply the journey you’ve been on.
5. What do I need to earn from this to sustain me?
This one will somewhat depend on your situation – is this a full term endeavour, a passion project or perhaps a side hustle you are running alongside employment.
But consider, given your financial situation, business activities, other incomes and all your outgoings, what does this business need to pay you to sustain you?
Factor in all your regular costs, inflation etc.
And how does that translate to what you need to be charging in order to sustain you now and in the future?
6. Who do I want to work with and what will they pay?
Here you can forget about price comparisons to anyone else in your sector because they are not necessarily offering something similar to you in quality, experience and results.
So think about who it is you serve specifically and what they will pay for what you do?
This one can be confronting because yes you might get some unwelcome ‘feedback’ from people who are not your ideal client on your pricing… but ultimately they aren’t who you want to work with so you can take their views with a pinch of salt, once you’ve got over the initial hurt and audacity!
Once you’ve finished at journalling on these more practical money mindset questions and then reflect on your pricing and if you feel comfortable making some changes based on all these considerations.
And in the coming months I am dedicating a whole topic to pricing and profits. Where we will get into some more specific calculations for formulating your prices so watch this space!
Hi, I’m Harriet, your trusted CFO, Business Growth Specialist, and Finance Educator.
My passion is to financially empowering creative entrepreneurs to achieve healthy profits and cashflows, so they can make a positive impact in the world. With my collaborative and supportive approach, I am dedicated to guiding you to greater confidence with your business finances.
Say goodbye to fear and confusion, build solid finance foundations and step into a supportive environment where you can turn your dreams into a reality through aligned finance strategy.
I provide accessible finance training in my free Facebook Group Money Mastery for Creative Business Owners – you are most welcome to join!
Harriet Formby MA ACA