Underpricing: a guide on how not to.

Have you been struggling with growing your business and generating enough money to make a profit? Maybe you have been feeling a little bit lost and overwhelmed with all of the free advice, content and resources on ‘how to build your business’ that you’ve found yourself excessively collecting?

That’s totally okay. No body ever said that this whole starting a business thing would be easy, if it was everyone would be doing it. But you decided that this was the right path for you and you have a purpose supporting you and your business.

The truth is, when it comes to entrepreneurs starting a business

NO ONE HAS ANY IDEA WHAT THEY ARE DOING.

It’s just like most people say the same thing about motherhood or just life in general. We as humans just adapt to new circumstances, we listen to our intuition and go with the flow. We live, we learn, we fail, we succeed.

Even the most successful entrepreneurs had to get it wrong a few times before they got it right.

One common mistake that I see a lot from young entrepreneurs (myself definitely included) is underpricing and undervaluing their products or services due to limiting beliefs.

If you’re reading this thinking, holy guacamole I didn’t even realise I’m doing this, or if you know for a fact that this has become a habit, then read on because I want to help you overcome this and start making some serious dollar!

So you’re totally undermining your skills and abilities in your career field and thus it’s having a detrimental effect on the growth of your business. Girl, you need to have a serious self loving convo with yourself, pronto!

If you think about it, the whole reason you are sabotaging your own business’s growth is simply because of these limiting beliefs that you have.

 

In case you are wondering, Ashlea, what do you mean by limiting beliefs?

 

I mean that every person has these negative beliefs buried deep in our subconscious mind that have probably been planted there for years! These beliefs then stop us from being able to take our business to the next level, despite the fact that we really want to.

• I am not good enough

• I am not experienced enough

• I am not confident enough

• I am nothing special

• I feel like an imposter

• I am not worth that much

• Others won’t want to pay me x amount

• My target audience can’t afford the price I want to charge

• I’m worried of losing potential clients due to a high price

• I feel guilty for charging the price I want

• I don’t believe in my abilities

• I don’t value my services

 

Did any of these sound familiar to you?

 

All of us have this negative and toxic self talk and it all sounds the same. To be honest, those little self-doubting voices in our head are always going to be there. It’s simply just a matter of learning how to acknowledge them and know that they aren’t true, that they are just a belief that has been affirmed in your head over a long period of time. Then you can start to change your mindset so that these comments don’t get in the way of your success any more.

I have been struggling with this too and I was thinking about this the other day when trying to price a quote for a service that I don’t usually offer, and I noticed that as soon as the client asks for a price I naturally stick to this routine.

First of all, I panic a little. Then I always say that I will get back to them on it. Then I go over lots of different numbers in my head until I settle on a number that I like and think is reasonable. I think about how valuable this project is and if my price fits nicely. Then my biggest mistake is overthinking, because that’s when I let all of my negative self talk interfere and this usually results in me lowering the number that I was happy with. Now, I want to mention that I am a very indecisive and doubtful person, so the next step is I ask somebody close to me if they think my price is reasonable. Bearing in mind that they have no idea because a) they have never bought this service and b) because they don’t sell this service.

One piece of advice that has really stuck with me is, don’t seek advice from someone who isn’t in the position you want to be in.

For example, don’t ask for money advice if the person is in financial struggle. Don’t ask for relationship advice if the person is in a bad relationship. Don’t ask for business advice if the person has never owned a business. You get the picture?

Because by doing this and taking this person’s advice, you are basically going to end up where they are.

Why do I end up asking for advice and validation from these people?

Because of my limiting beliefs. Because I worry that my value doesn’t match the higher price tag.

So I undermine my skills. I undermine my services. I undermine my value.

We all do it.

 

So where have these limiting beliefs come from?

It has mainly evolved through your lack of confidence and years worth of experience.

If we look back into our past, we have always been told how much our time and abilities are worth.

The time when your parents or a family member would give you money for doing chores around the house

The time when you babysat or petsat for a neighbour

What about the time when you worked in a corporate job and your boss was the one to tell you how much you were to be paid.

We have all been conditioned to accept that other people determine how much they pay us for our service.

Now that you are running your own business and being your own boss, now is the time to change that.

But I completely appreciate that this is a difficult shift and transition to make, but I urge you to give it a go and be the empowered and confident version of yourself that you are meant to be.

Before we get into the nitty gritty of how to change this. I want to quickly explain how your actions effect your business.

So when you are underpricing your services/products, you are undervaluing your abilities and basically saying into a megaphone ‘hey, I can do this for you but I don’t believe in me or my service so I am letting you pay a small amount for it.’

Obviously, with this message being sent into the world, you will only attract the ‘wrong’ types of people. What I mean by that is you will attract those who undervalue you (because you undervalue yourself) and who are looking for the cheapest option possible.

Have you ever bought something supppperrr cheap and still really valued it? Probably not. Think of all the freebies you have been given. The McDonalds happy meal toy, or a promotional pen from a company or a free leaflet. I bet all of those things have either ended up in the bin or in the back of a drawer, completely forgotten about. Why? Because it holds no value to you. Yes, this toy might be exciting when you first got it, but there are new toys being handed out.

If you are wanting to buy a new laptop, which one would you value and love more, the £400 Dell or the £1,000+ Mac?

When you invest money into something you are automatically giving it value and therefore you treat it so much better as it continues to bring you joy.

The same goes for services.

If you are aware of Law of Attraction, then you will understand that money is simply just energy and it only has a purpose once we give it one. We give money its value, not the other way around.

Bottom line is, if you believe that your service is valuable and can confidently price it, then you will attract the people who want to invest in you and believe in the value of your service.

Money mindset is a huge topic, it could take years trying to reframe the way your brain thinks so to stop these blocks and limiting beliefs from getting in the way of what you desire. There are so many amazing resources on this that I really encourage you to explore and educated yourself on.

• You are a badass at making money by Jen Sincero

• Manifestation Babe – Kathrin Zenkina (her podcasts are golden!) but everything she does is amazing

• Gabrielle Bernstein (what a woman!)

 

So step #1 is working on your money mindset.

If you live a life focusing on the lack of money you have, then sorry to break it you, hun, but you will always have a lack of money. If you start changing the way you talk about money, it will change the way you see it, which will change the way in which you receive it and how it flows to you.

Even if it means that you don’t fear money anymore and see it as an empowering and powerful tool to help build your business and help you to project your voice. You are entitled to have as much money as you want.

 

Step #2 is gaining confidence.

This is where the self love chat comes in. Let’s be honest, one of our biggest critics in our life is ourself. I bet there isn’t somebody who is harder on you than yourself. As humans we all have this weird natural ability to hate, doubt and criticise ourselves which obviously, isn’t helping our ego. Us ladies need to become badass women!

So try and be kinder to yourself. You are doing the best you can with what you have and you have the potential to be, do and have anything you desire in life. If you learn to practice more self love talk, I’m positive your perspective on life will be so much nicer.

The more we have wonderful and empowering conversations with ourselves, the more we start to muffle the limiting beliefs that have always been holding us back.

Okay, so maybe just chatting ourselves up in the mirror isn’t exactly going to make us superwoman and stop underpricing and undervaluing our business but it honestly makes a great difference.

What you can also do, if you have just started your business in a field that you maybe haven’t got much experience or qualifications in, it can be difficult to consciously charge a large amount of money for it because let’s face it, you don’t feel confident enough. And that’s totally okay!

So my advice would be to either start off by offering a service for free (be very limiting to how many people you offer this to!) or try a skill swap where you find someone who needs your service and vice versa and you do something for each other instead of paying money.

This is a great way to test your organisation methods (ie, email scripts, website logins, software etc.) and this will build your confidence knowing that someone LOVES what you have done for them and would happily recommend you to others. By doing this, you are feeding positivity into your mind and have evidence that you totally rock at your service, thus giving you the confidence to charge what you want.

The only caution I have, is for those who have been in their business for a while and still charge lower amounts. I have done this and it’s has not benefitted me at all.

When we are in the first year of our business, we feel this need to have clients, despite how much they charge. You think, as long as I have a project to do and someone is paying me, what does it matter how much they pay?

Hmmm… it matters a lot. How are you going to grow your business if you are constantly selling yourself short?

I made this mistake a few times and it just hasn’t really worked well. Firstly, I discounted my services 50% when I launched my business just to attract clients. (It didn’t work) Then the first client I had was through referral and word of mouth, I gave her 50% off because of this silly sale I was so determined to do.

Secondly, I offered to design a website for free. This would have been fine, but I already had some confidence and I wanted to try out a new website platform so I thought I couldn’t charge if I have never used the platform before. Reasons it was a bad decision, a) I never want to use the platform to grow my business b) the client, I felt, didn’t value me, my time, my service and my experience c)It took so long. Obviously it wasn’t on their top priorities so the communication was so prolonged. In the end it didn’t really feel worth it.

Thirdly, I tried to win over a client by competing my prices with somebody who was in the beginning stages of setting up their business and was charging an incredibly low amount. Reasons it was a bad decision, a) this lady kept ghosting me b) she was never looking to spend the amount that I and many other web designers charge c) when I looked at the price I was offering her, I felt so disappointed, like that couple hundred wouldn’t grow my business a lot in terms of the time and effort used on this project.

Fourthly, I undercharged for a small project which at the time I thought made sense. However once the project was complete and I sent an invoice, I felt a bit disappointed. Yes it was money and a new project but I felt I should have charged more for the work I had done.

My point is, we all do it to try and win over clients because we think that by going cheaper and booking more projects, is better than nothing. Whereas booking few clients and charging the prices you want to will be a lot more beneficial and financially substantial for your business. But this is something that we can all change over time.

 

Step #3 is determining your value

This is by far the hardest step because obviously if you are here, you haven’t done this well so far. And to be honest, I don’t have a huge amount of advice for this (I’m still trying to find the magic numbers myself)

What I would like to say is that if you have already been through turmoil with pricing your services and been let down by what you have previously charged, then just choose a number you are happy with (or you feel comfortable charging) and just go for it!

You’ve already underpriced yourself, so really be brave enough to charge the prices you want right now!

If you feel guilty of charging your services, then this may just take time building the confidence but settle on a price that you feel happy and comfortable with. Otherwise you will just continue feeling the impostor syndrome and that’s not fun or abundant.

I understand that most of us fear overcharging in case that one potential client turns their nose up and walks away. But that is okay, as long as you are confident that your price is right, you will attract the people who believe in that and want to work with you.

Truth is, we assume that potential clients either don’t have the money to pay us or don’t want to spend that much money, in other words, invest. But that is probably just a reflection on our current money mindset and current situation. There are so many people out there who want/will want to work with you. Money is just a way of your clients thanking you for what you have done for them.

I want to tell you one more story. I recently priced a quote which is the largest amount I have quoted to date (yes, it is a huge project). So there I was twiddling my thumbs trying to decide how much to charge, being totally aware of all the self sabotaging behaviours I had been doing over the past six months.

So I settled on a price and very excitedly send over my quote. I told a person close to me the number I decided on and the first thing he said to me was ‘can you justify that number?’

Why would he say that?, I thought.

Obviously, I did because I had worked it all out, not just picked a number from thin air. But the idea that I would have to justify it to him seemed bizarre.

Then I thought about it. When we walk into a shop, let’s say Tiffany’s because i’m a classy woman 💁. You see this gorgeous ring that you must have and ask the lady behind the counter how much it costs. The lady says it’s £13,000. The last thing you would ever do is ask her to justify the price. I mean it’s ridiculous!

You will never have to justify your prices to clients. And if they ask you, probably don’t do that. If you respect the business and the product/service, then you accept the price as it is.

So you should treat your business the same. I mean, that £13,000 Tiffany’s ring sells. Yes, some women may have left the store in a huff and a puff, grumbling about how absurd the price is. But other women will happily walk in the store and purchase it. Or others (definitely me!) have the 13k ring on their bucket list.

One last thing before you go:

I have created a pricing your services document + spreadsheet which includes some strategic steps to help determine your prices based on expenses and profit. Click below to grab yours for free!

 

 

So this was a very different post to what I usually write but I had been going through this little revelation and had heard other female entrepreneurs voicing their struggles with underpricing. So I had this huge flow of inspiration and I really really hope this has helped you.

I would love to hear your journey with starting your business, pricing your services and your money mindset!

Also, if you have any questions or would like me to clarify any points, just let me know in the comments or send me a quick email. I would love to chat with you more about this.

Have a great rest of your day and stay fearless!

 

 

 

 

 

 

 

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