It’s 2019, I'm on the phone to my not so great accountant, I can feel knots of stress in my stomach. I’m conscious that although I’m sitting in a room on my own I’m shaking my head.

“You’ve doubled the size of the business this year, that’s great news” The accountant says to me. I’m still shaking my head, the knots are still there.

Although the business has doubled, I know from the numbers it still can’t work.
The marketing is working, we’re getting tons of sign ups every month and they’re paying an upfront fee which covers the advertising costs - great.

Our client churn rate is low, most of our founding clients are still here, two years later - great.

But there’s something I can’t shake.

It’s never going to work.

With the prices we’re charging even with this place rammed to capacity - which it was
close to - we’re never going to be able to pay our staff the wages they need and deserve - shit.

With the prices we’re charging it can only work with me taking a minimal wage - I was paying my staff more than me - shit.

At that moment I realised what I was doing. I was screwing over my team, myself and my business to ‘look after’ our clients by keeping their prices at rock bottom.

Over the next 18 months our prices went from a maximum of £80 per month to a a minimum of £150 a month and maximum of £400 a month….

We got busier, our service got better, our staff got paid more and everybody won.
In response to the little devil on your shoulder, we lost some clients too BUT they were:
-  More than covered by the price increases
- Replaced by new people (we had more money to market)
- Many ended up coming back because even though others were cheaper, we were better.

If you want your business to be a win/win you have to price for a win/win.

Here’s some tips to help you do that - check in on these regularly:

1) Always plan for profit. Look at all of your fixed running costs and fulfilment costs. Consider how many clients you can service / products you can sell on average and establish arbitrary numbers that create profit. If you can’t make it work, you’re probably too cheap.

2) Pay yourself as a CEO. If you’re still in the business you have to factor that in as a cost. One day you will want or have to leave the business so someone will have to replace you and be paid accordingly. Not factoring this creates a non sustainable or sellable business model.

3) Shamelessly check the competition. Check out who’s nailing it in your industry, what are they doing, what are they charging? 9/10 you’ll find the industry leaders are confidently charging more AND their clients love them for it (because they’re delivering a great service).

4) STOP charging on time. You don’t sell people your or your team's time. You sell people a result. If they could get that result faster, they would pay more. Get clear on the value you create for your clients, charge what you need to charge. When you can clearly communicate how you will 10x what they are spending, charging premium prices becomes straightforward.

5) Check out industry business coach models. In most industries you will find someone who has figured out a great model for running your particular type of business profitably and they’re teaching that model through books and programs. They will also give away tons of insights for free. Head over to Amazon and search how to run a profitable ‘your industry’ then stalk the author.

Don't fall into the trap of telling yourself you need to become a huge business in order to be profitable at low prices. Build the confidence to charge what you need to charge right now to be profitable at the size you are. Your customers, team and business will thank you for it. 

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