Tip 46) The dangers of being too cheap!

One of the biggest issues I come across with small business owners and sole traders is the price issue. 'How much should I charge?' is probably one of the most commonly asked questions (and many people price themselves too low).

The answer to this question obviously depends on a lot of different factors, and I will write a blog about that over the next few days, but in the meantime here are four reasons why you shouldn't start in business with your prices too low...

1. You may not be making enough money for your business to support you. You might assume that what you lose in price, you’ll make up for in volume but it doesn't always work that way, and you could end up a busy fool. However fab your products or services are, if you are not making enough money, your business won't be able to continue to offer those services. You owe it to yourself to charge what you are worth. Have confidence in yourself and your products and services. 
2. When you start low, it can be very difficult to increase your prices later if the client stays with you. (I learnt that one from personal experience when one client stayed with me for ten years!)
3. If clients refer you to their friends, chances are it will be at the lower price. 
4. Clients can often assume that if you are a lot cheaper than your competitors, you are not as good. 

If you are adamant that you want to start out with lower prices, make it VERY clear that it is a limited time special offer – that way you can put your prices up when you feel more comfortable. More on putting up your prices soon too!

Here's to creating a win-win for you AND your customers and clients! 

Jo x

P.S. As always, if you need help, either pop along to one of our online Mastermind sessions or contact me for a 1-2-1.​