Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:07] Speaker B: Welcome back to the Total Profit podcast. This is the show where we show you how to lead with clarity, grow with confidence, and actually keep more of what you earn.
I am your host, T2, and I'm here with my favorite price tag whisperer himself, Tally P.
Hey, hey, hey.
[00:00:26] Speaker A: I don't know about Whisper, but I know a thing or two about charging what you're worth.
[00:00:30] Speaker B: And that's today's episode. We are diving into pricing, how to set it, how to raise it, and how to defend it so that your work actually pays off.
[00:00:41] Speaker A: This is one of the biggest profit levers out there. You don't need to work more, you might just need to charge more.
[00:00:50] Speaker B: So let's be real. Many businesses under charge. Why is that, Tommy?
[00:00:55] Speaker A: That's a great question. Fear.
Fear of what you say, Fear of losing a customer, Fear of rejection or just copying competitors. Also undercharging. But if your price doesn't reflect your value, you could be working for free or less than free.
[00:01:14] Speaker B: Less than free.
I can't say this loud enough. Underpricing does not build loyalty. It builds burnout and it builds broke businesses. And there's a real cost to getting the pricing wrong, right?
[00:01:32] Speaker A: Oh, absolutely. You know, here are some of the costs of getting the price wrong.
You can't afford to hire help, or the perception you can't afford to hire help. You say yes to everything, even low value work.
You resent your business and then your margins, if there are any, they dwindle or disappear.
[00:01:55] Speaker B: Boy, I can't imagine what it would be like to get to a place where you resent your business. Where you resent your business. This is for so many people, a dream that they're trying to build and they poured themselves into it and they're so excited about it in the beginning. And then they get to a point where they resent it because it's just not working the way they thought it would. And so basically, you built yourself a job that you hate.
And that's so unfortunate and sad, but it doesn't have to be that way, right?
[00:02:26] Speaker A: No, we're here to help you take a look at this and understand what we can do to make those changes. So what does pricing power mean?
First, you need to know your cost. You don't know your cost. You can't put a margin on something that you don't know.
Next, know your margins. Set that target. What is it going to take to pull us above that, that break even profit? You lead with that value, not discounts. People will pay for good service. Good products.
And then you attract clients who respect your expertise. That, that's, it's like a double, double win there. You get somebody that appreciates you and is willing to pay you what you're worth.
[00:03:12] Speaker B: And I don't want to skim over what you said about leading with value. So people will pay if they feel like they're getting their money's worth. And so lead with the value, not the discounts and the pricing. And then, yeah, that will lead to the respect. I love that. And you're just, you're just not afraid to say that's the price. No apology, no shrinking, no playing small.
Just confidence.
[00:03:38] Speaker A: You know, I always refer to, nobody ever goes into McDonald's and negotiates the price of a Big Mac. They just pay it. And that's, that's the way we need to look at our businesses. So, you know, again, how do we raise our prices? And what's, what's a strategy? So here's some things to, to think about, is like I said before, knowing your numbers. You have to know what everything, your material, your labor and your equipment costs you. And when you're setting up these, these bid jobs and your products, what is break even? You know, what, what does it take to make that cost at a, if I do a dollar's worth of work or a million dollars worth of work, package your services.
Clarity is raised, raises value 100%. It's like, just show people what, what you're giving them and they will pay it.
Introduce price increases gradually. I mean, if you, if you double your prices, chances are you're, you're going to have some of those, live some of those fears that you're coming into with and announce like a pro, your confidence. You're, you're a great business owner.
Execute that with confidence and change. Exchange that in your conversations and in your bids. And then last, track the impact.
Watch what happens to your bottom line when we get everything costed properly and we execute properly.
[00:05:10] Speaker B: So, spoiler alert, when you raise your rates, you often get better clients and you also get more respect.
There's just a psychological light switch that goes on that drives that respect from your clients. It's awesome.
[00:05:28] Speaker A: And you show up differently. You show up under control. You don't have that stress of missing those targets. And you come into it with confidence. And it reflects like, one of our clients raised their prices by 20% across the board, lost two clients, but their profit jumped by 40% because they were finally getting paid for the value they delivered.
[00:05:49] Speaker B: I love that. Less stressed, more cash. That's the power of pricing done. Right?
So our challenge for you this week is, number one, audit your pricing. Are you charging enough to hit your margin goals? And if not, or if you don't know how to calculate what to charge, please reach out to us. We can help you with that.
Number two, charge or choose.
Choose one offer to repackage and raise. You probably had several offers in depending on your type of business. Choose one, repackage it a little bit, add some value, raise the pricing and present it with some confidence. All right, so number one, audit your pricing. Number two, choose one offer to repackage and raise and number three, role play that conversation. I know that sounds corny, but I'm not going to apologize for it. Practice saying your new price without flinching. I had a boss one time that said if it doesn't pass the red face test, you're not being bold enough. But love that phrase, the red face test. And so you know, if, if, if, if you've got a client that balks at that, it's okay. It's okay. Now you're, you're just making room in your world and in your business for somebody who won't and who's going to pay you what you're worth.
[00:07:12] Speaker A: And chances are the, the bikers are people that you don't want in your client base. It's like they don't realize the value of your services. And it's natural attrition.
[00:07:22] Speaker B: Absolutely.
All right, big shout out to our sponsor. Performance margin. It's the only software that shows you exactly what's profitable so that you can price your work with confidence.
[00:07:34] Speaker A: It's the truth.
It's the truth. It's the truth serum for your business. Know your numbers. Price with power and your bottom lines will reflect it.
[00:07:46] Speaker B: And if you're loving our show, do us a favor. Subscribe, Leave a review. Send this episode to that one friend who's still undercharging until next week. Take her. Cool.
[00:07:57] Speaker A: Cool.
[00:07:58] Speaker B: Don't get too excited. It's all under control.
[00:08:01] Speaker A: It's going to be fine.
