Be Confident About Your Prices

A thought occurred to me while speaking with a client the other day.   Many clients we work with seem to have a certain angst in regard to their pricing and it manifests itself in an apologetic tone when giving price information or asking for payment.

If you are priced competitively, which means that your prices compete favorably against your competition with all things considered (quality levels, service, warranty, uniqueness, etc.); and you are providing good value for the price, then you should discuss your prices with confidence.

Don’t hem and haw trying to explain why your prices are what they are—it will sound like you are trying to justify a bloated price schedule.   Now this is not to say if they ask why your prices are so high, you shouldn’t explain the value you provide and the benefits they’ll receive, especially if your prices are higher than the discount providers or even mid-range competition. It is imperative that you tell why you charge what you do; this gives you an excellent opportunity to sell your prospect and demonstrate why you are so proud of what you offer.

Another related issue I mentioned is asking to be paid for your service. I remember once when a contractor that was doing some work at my house completed a milestone, which meant another progress payment was due. His wife handled the business end and she came by, along with her husband, one afternoon upon his return from lunch.

“By the way,” she said while sort of hesitating and shifting her eyes back and forth from my face to the ground, “we’re done with post-setting and we’re getting ready to start the frame construction, and well, I was sort of wondering if, umm, if it would be possible, you know, maybe we could get a check?”

Why on Earth was she so afraid to ask for what was she was contractually entitled to? They had done a good job, were on schedule, and held up their end of the bargain. Now it was time for me to hold up my end. She should have simply said “I came by to pick up our next check since we’ve completed post-setting.”

Be proud and matter of fact when discussing the financial aspects of your business with your customers. If they sense that you are not confident in your pricing, they will naturally begin to wonder if your product or service is worth the price. If you’re hesitant about asking for payment, they will wonder if they’re going to get what they are paying for.

Unless you are truly uncomfortable with the work you are doing or value you are providing, your prices should be a source of pride as a payment for a job well done.

Don’t Skip the Business Plan

I had a conversation with a friend the other day. This person has been contemplating self-employment for a few years and has recently become more serious about it. I’ve been counseling him informally trying to help free him from the job he has held for over twenty years and help him in his transition.

Due to many circumstances, I believe he is still very far from taking the leap. A key reason for this is that he is floating. What I mean is that he is unable to decide on a clear career path and how to achieve it. He is waffling between two or three possible avenues but can’t determine the best path for him.

Each time he appears to be making a decision I have provided the same advice: create a business plan. That’s sort of my mantra. For my friend, it is also one of the reasons he has failed to act, he just doesn’t want to “jump through that hoop.” On many occasions he has said words to the effect of, “Do I really have to? I mean is it really necessary?”

Need I state my reply?

During my latest conversation, once again the business plan advice came up and he said that a few people have said that he doesn’t need to do a business plan, just go ahead and open up shop.

I told him that the people that told him that are just flat-out wrong! If they are business consultants or claim to be business experts, they should find other work. The plan is what tells you if what you want to do is feasible, it will guide you to your goal, it will tell you if you are on track as you execute the plan. IT IS A MUST!

Unfortunately, the plan is not a crystal ball. It doesn’t have the inherent ability to transcend the dimensional boundaries of time and space and affect the future. While it forces you as the author to estimate what will happen based upon certain assumptions, it doesn’t mean that what you predict will actually happen. That’s why it is a living document that you’ll have to revisit and revise on a continual basis.

It’s important that you maintain your plan for two reasons. The first is to adjust your course properly when reality doesn’t line up with the plan. But perhaps an even more critical purpose is that when you make these adjustments, you’ll need to see if reality will ever allow you to meet your objectives. Unfortunately, sometimes things veer away from the plan to the extent that it shows that your vision may never come to fruition and the time may come to terminate the business. It’s a difficult decision, but the sooner you realize this, the better off you are.

For the good or the sad, the business plan is the fundamental tool you need before you start, and to map your progress. Don’t skip this crucial step—it’s your best chance for success.