Crafting the right pricing strategy can be a conundrum but mastering this is pivotal to your business's longevity and growth.
Know your financial needs
Understand how much you need to cover both business and personal expenses. This helps determine if your business is genuinely sustainable.
"Ask yourself: How much money do I need? Because you're never going to know whether it's going to be sustainable if you don't know how much you're spending."
Understand your work-life balance
Once you know your financial needs, consider how much you want to work. This decision plays a significant role in creating a fulfilling lifestyle.
"Calculate how much time you spend on various projects and how much money you get from them. If you end up earning very little per hour, that might not be sustainable."
Don't undersell yourself
Ensure you're not undercharging for your services. Calculate the profitability of your work per hour and adjust your pricing strategy accordingly to avoid devaluing your time and effort.
Choose the right customer
Know who your target customer is and assess their ability to pay. This understanding is vital in building a sustainable business model.
"You may start off wanting to serve a particular group because you're mission-driven. And unfortunately, they can't pay... So, who can I work with doing what I want to do? Who's going to pay me enough to do that?"
Diversify your revenue streams
Different business models yield various income levels and require different effort levels. Consider diversifying your revenue streams for financial sustainability.
"One of the things that kept us going was our events and retreats... And then we have coaching, which is a completely different game, with much higher profitability. So, there are different business models, different revenue models that will give you more money."
By mastering the art of pricing, you can create a business model that stays true to your mission and supports both your financial and personal needs.
Want to continue down the rabbit hole 🕳️ 🐇?
Check out these resources that will keep your inspiration tank full...
Listen - Delivering An Exceptional Sales Experience with Dana Publicover
Listen in to Inspiration Space mentor, Dana Publicover, as she shares experts tips you can use to embrace your inner sales person and design an exceptional sales experience.
Watch - Price the Client, Not the Job
Watch this bitesize lesson from Chris Do, Founder of The Futur, and we promise you'll never leave extra money on the table again.
Read - Profit First
Profit First offers an intuitive solution to the challenges entrepreneurs face in their pursuit of profitability. Unlearn misconceptions about profitability and discover the benefits of managing your funds across multiple bank accounts.
It's a must-read for those eager to revamp their financial strategies and prioritise profitability.
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