I was chatting to a friend the other day who has recently opened her own business. In fact, I was buying some of her services.
When it came for the time to hand over the money, I was surprised by how little she was charging me. I used to use her services when she worked for another company, and was used to paying much more.
I asked her why she wasn’t charging her usual rate, and she answered that she didn’t feel she could command those prices anymore, due to just starting out on her own. In my opinion she is undervaluing herself.
You see many of her regular clients, such as me, have followed her to her new enterprise. But she is now scared to command the same rates as previous times, as she is now responsible for providing her own income. It’s a trap that I see many times over with new entrepreneurs, and one that I made myself.
You so desperately want new customers and to generate some revenue, that you “prostitute” yourself and take whatever will come your way. You’re not choosy about where the money is coming from, as you just desperately need to get away from the fearful feeling that has become part of your life, since you started out on your own. Money is money right? Wrong.
There are people out there with the money to pay what you are worth. If you position yourself as low cost, then you will attract a client who has no loyalty, because they are always looking for the best deal. The only way you can get their loyalty is to buy it: to lower your price or offer further discounts.
Would you rather be known for being low cost, or high value? You can choose.