BUILD THE BUSINESS YOU WANT

What Small Businesses
Do Badly

Small Business Pricing Strategy and Undercharging

For small businesses, overdelivering and undercharging are common issues. Many business owners give very little thought to their pricing strategy. When they start their businesses they are desperate for work, they are desperate for business and they may be desperate for money. Therefore, they can fall into the trap of undercharging.

Sometimes they are undercharging because of a mindset block to charging their worth. Sometimes it is because they are not actually aware of the true value they bring to the marketplace.

Small businesses struggle with pricing strategy and often look to other businesses for inspiration, even though those businesses may also be undercharging. In the early days of business growth, this problem may not be an obvious one. You start to make money, you start to win clients, and you start to feel like you are creating a successful business.

George Swift
Author : George Swift
Author : George Swift

What Small Businesses Do Badly

Small Business Pricing Strategy and Undercharging

For small businesses, overdelivering and undercharging are common issues. Many business owners give very little thought to their pricing strategy. When they start their businesses they are desperate for work, they are desperate for business and they may be desperate for money. Therefore, they can fall into the trap of undercharging.

Sometimes they are undercharging because of a mindset block to charging their worth. Sometimes it is because they are not actually aware of the true value they bring to the marketplace.

Small businesses struggle with pricing strategy and often look to other businesses for inspiration, even though those businesses may also be undercharging. In the early days of business growth, this problem may not be an obvious one. You start to make money, you start to win clients, and you start to feel like you are creating a successful business.

George Swift
Author : George Swift
Author : George Swift

Running Out of Time

Inevitably, if you are good at what you do and you start to create a degree of success in your business, you WILL run out of time. You will not have enough time to invest in sales and marketing in order to win new clients and even if you could win new clients, you do not have the time needed to service those clients. You will hit a wall.

At the point you run out of time, your business needs to be financially successful enough in order to have a surplus of money to invest back into the business.

Time, Money and Energy

In business, you have three core resources, time, money and energy. Typically, most small business owners do not have access to a lot of money, so they rely heavily on their time and energy. As previously mentioned the more successful your business becomes, the more likely you are to run out of time.

As you run out of that time, you need to make sure that your business has enough money. If you have enough money at that point to reinvest in the business to buy back the time you need in order to grow your business to the next level, you can glide past this potential pitfall that many other business owners fall foul of.

Minimising Risk

Undercharging and running out of time are some of the biggest traps that we see small service-based businesses falling into, which can ultimately contribute to why small businesses fail. Unfortunately, sometimes by the time they find out that they have a problem with their pricing, it is at the point where they have hit this wall, they have run out of time and they don’t have enough money. This can make it really challenging, as they may need to re-engineer their business and unpick their bad pricing habits in order to solve the problem to get their business back on track and onto the next level.

Quite often businesses have to take a step or two back before they can start to take steps forward again. If you are in the early days of your business, take the time to develop a pricing strategy for your small business and make sure that you are pricing your services not only for the money that you need today but also for the money that your business needs in the future in order to be able to continue to grow. This is an essential part of minimising the risk of getting stuck and hitting a business growth wall.

Time, Money and Energy

In business, you have three core resources, time, money and energy. Typically, most small business owners do not have access to a lot of money, so they rely heavily on their time and energy. As previously mentioned the more successful your business becomes, the more likely you are to run out of time.

As you run out of that time, you need to make sure that your business has enough money. If you have enough money at that point to reinvest in the business to buy back the time you need in order to grow your business to the next level, you can glide past this potential pitfall that many other business owners fall foul of.

Minimising Risk

Undercharging and running out of time are some of the biggest traps that we see small service-based businesses falling into, which can ultimately contribute to why small businesses fail. Unfortunately, sometimes by the time they find out that they have a problem with their pricing, it is at the point where they have hit this wall, they have run out of time and they don’t have enough money. This can make it really challenging, as they may need to re-engineer their business and unpick their bad pricing habits in order to solve the problem to get their business back on track and onto the next level.

Quite often businesses have to take a step or two back before they can start to take steps forward again. If you are in the early days of your business, take the time to develop a pricing strategy for your small business and make sure that you are pricing your services not only for the money that you need today but also for the money that your business needs in the future in order to be able to continue to grow. This is an essential part of minimising the risk of getting stuck and hitting a business growth wall.

Reevaluate

If you are already experiencing the trap of not having enough time or money to reinvest in your business, then you may need to take a step back. To avoid small businesses burnout, reevaluate your prices, reevaluate your target market that you are selling into, reevaluate your product and just make sure that your business is generating the revenue and the profit that’s required to continue your entrepreneurial journey.

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