Fellow appraiser Martha Peck, ISA AM send me an interesting article out of Forbes on service fees and if professional providers are charging enough for their services and products.
I have heard many times from appraisers that they wish they could charge more. I include myself in that category as well, and I have multiple reasons why I dont, some legitimate, and others, well not so much. The article lists several reasons why we have self doubt about our fee structure and how it relates to our perceptions of the value of our services. It also lists steps to take to overcome those self-doubts and reservations.
The Forbes article is one all appraisers should read and take to heart. The article points out that many service providers which under-charge actually work extremely long hours, are highly dedicated and wish to provide professional services. There is also a lot of self doubt. The article recommends getting beyond the self doubt, have confidence, charge more and good things should start to happen.
Forbes reports
Source: ForbesI speak with people every day who offer great products, services, and programs that are a cut above, but they are failing to make any money. There are numerous critical factors behind a failure to generate sufficient revenue, but it’s usually not what we think. Often, our subconscious blocks and mindsets are holding us back.
For example, I see service providers by the hundreds who stay stuck in a cycle of undercharging for their work. They won’t budge out this trap, no matter how many people tell them that they’re not charging enough (even their own paying clients).
I remember hearing Nell Merlino, Founder of Count Me In For Women’s Economic Independence and the Make Mine a Million $ Business Program (through which I was honored to win, with several others, the “Micro to Millions” 2008 award in CT), speak at a More Magazine Reinvention Convention in NYC, and she rocked me with this message:
“If you’re making $50,000 or less in your business, it’s not a business, it’s a job, and it’s not a good job either.”
I was making around that at the time, and I was truly offended and angered at those words. But I’ve come to see the validity in that message (and I realize that I was in denial about money at the time). If you were working for someone else, and had to toil for 18 hours a day to make ends meet and still generated less than $50,000, you’d say something would have to change, right?
Below are the top four excuses I hear people give for not charging what they deserve. I used all of these excuses myself, before I figured this out:
1. “I’m having so much trouble having people hire me as is. It would never work at a higher price/rate.”
2. “I’m not really sure what my work is worth, and what it could command.”
3. “I’m scared to do it – where will I find customers who can pay that?”
4. “Times are bad – I don’t want to contribute to people’s challenges by making it hard for them to pay me.”
But underneath all this, I’ve observed deeper reasons for a reluctance to charge more. These reasons are:
A deep insecurity about the value you’re bringing
Folks who chronically undercharge also tend to work very long hours each day (18+), and don’t stop. That drive to keep working without stop often stems from a lack of confidence that what you deliver is really good enough. I’ve seen scores of coaches and therapists go over their one-hour session time habitually, giving more and more time for free. The reason? Deep down, they’re afraid they’re not good enough, or powerful enough to help the client in the time allotted.
A lack of understanding the key outcomes you deliver
Another reason why people don’t charge what they deserve is that they haven’t taken the time or effort to measure, quantify or identify clearly the key outcomes that they offer. They also don’t know how they stand apart from their competition. What you offer IS different from your competitors, but do you know how, exactly? Do you know what you bring to the table that your top 30 competitors don’t, and can’t? If you know your competitive advantage, are you marketing and promoting it wherever you go?
A failure to realize that prices that are too low also attract problem clients and customers
Your prices reflect your value, expertise, know-how and your status in your field. If you undercharge, what message do you think that gives prospective customers? Do you want to attract only customers who will pay bottom dollar?
Thinking you’ll get more great clients and customers this way, you’re missing a critical point – people who underpay also tend to make you crazy in the process of working with them. They nickel and dime you, second-guess you, and refuse to honor, respect or value your great experience and expertise (in part because you’re not honoring it yourself).
Mistaking pricing as the most important driver in their business
People who undercharge also tend to think that pricing is what brings in customers, and often neglect critical endeavors like marketing, promotion, social media engagement, publicity, events, thought leadership, networking, affiliate and referral partners, and more. In short, they don’t know how to market their work or generate more business, and rely only on word of mouth. When you rely solely on word of mouth, then the circle of customers you have will only be those who won’t pay enough.
Vagueness about the numbers
You need to have a tight handle on how and where the money is coming in and going out. So many small business owners have someone else overseeing the finances, so they’re clueless about the financial drivers, the cost of doing business and what they’re truly earning. Don’t make that mistake. Take control of your finances and your key business measures and metrics, and understand the financial picture intimately so you can improve it.
What to do differently?
Take these six steps:
1. Identify the process of how you work and what you bring to the table, along with the special outcomes it delivers. Do an exhaustive competitive analysis and figure how you’re different, and better, than the competition. If you find you’re not better than the competition, take some steps to power up your offerings and become stronger and more effective in what you do.
2. Stop relying on word of mouth as the only way to generate business. Start marketing and promoting your business in ways that will exponentially expand your circle of influence. (Yes, you can do this, and it doesn’t have to break the bank.)
3. Overcome your own personal blocks to attracting and earning great money. Check out these powerful books – Tapping Into Wealth, The Big Leap, and The Energy of Money - to revise your relationship with money and become more excited about earning what you deserve, and speaking up for that.
4. Develop stronger boundaries. Start saying “no” to outlandish requests for your time and effort. Know what your time is worth, and demand respect for that.
5. Get some help to build and strengthen your business. Find a way to get some financial, accounting, and marketing help. Take a Quickbooks class to learn how to manage your financial picture. Also identify how you can delegate more (to an intern, a virtual assistant, etc.), and focus more time on what you do fantastically. Leave the rest of the work to those who can support you well doing work they’re great at.
6. Charge 20% more starting today. Just do it. Then figure out what the right number is within the next few months, and start charging it. You can transition your existing clients to your higher fees in a more gradual way, but new customers and clients need to pay you more, starting now.
In the end, if you’re not charging enough, there’s something holding you back from believing in what you deliver, and asking for what you deserve. Usually, these blocks emerge from messages we learned in our childhoods, about our own self-worth and power, and about money, wealth, prosperity, and the energy of money.
Take a step today towards overcoming these blocks. Your business will grow when you do, and you’ll finally be able to love your work rather than drown in it.
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