I’m all about raising the prices for your services as a way to get more money in your pocket and free up your precious time.
However — there’s a booby trap here.
A lot of people feel like if you raise your prices, it means you also have to do more work in order to justify it.
I also fell into this trap. When I initially doubled my prices, I felt like I had to make my process more complicated and hand over more deliverables. I didn’t want them to feel like they were getting ripped off if I wasn’t working extra hard for it!
But the problem is if you make your process more complicated and increase the time it takes to deliver… is increasing your prices actually even more profitable?
It’s a myth that bigger packages are always more profitable.
In actuality, what makes something profitable is the money you charge relative to the amount of time & resources it takes to deliver.
As an example, which one is more profitable:
- A $10,000 package that takes you 100 hours to deliver?
- A $3000 package that takes you 10 hours to deliver?
Most people would automatically want to sign the $10,000 package because it just sounds so much better.
But in reality, you’re actually making significantly more profit on the $3000 package.
Consider it: If you had 100 client hours to work in a month, the max you could make is $10,000. But since the $3000 only takes 10 hours to deliver, you could do 10 of those in a month and make $30,000 (although you would need to spend more non-client hours finding and onboarding 10 clients as opposed to only one… so it’s a balancing act).
Of course this is all hypothetical – you need to figure out what would make the most sense for your services and business.
But the point being is that in order to make the most profits, you can’t inflate your process at the same time as increasing your prices or it’s pointless.
So isn’t it unfair to raise your prices if the client doesn’t get more of your time/effort?
First of all, no, because you’re an ethical, knowledgable service provider who does an amazing job for your clients and you’re probably already undercharging.
I guarantee you there’s plenty of people out there who charge way more for the same thing and do a much worse job. You already know this.
Second, as an expert, you really need to be selling packages based on the value you’re providing (rather than hourly). Your clients are paying for the result – they don’t care how you get there. For my clients, they want an amazing brand and website. They don’t care what tools I use or how long it takes me as long as they get what they want.
Hourly is a pretty crappy way to charge because it penalizes you for being an expert.
As an expert, you’ve honed your craft over time. Every time you perform your services or complete a project, you grow your bank of experience and knowledge, and as a result, you should naturally be getting more skilled and efficient at delivering the result.
A lot of us feel guilty if we charge a lot for something that feels easy to us but if you’re a true expert, it SHOULD feel easy.
You might have heard some version of this old anecdote:
A large shipping freighter stopped in its tracks, halting work for days. Every worker on the ship gave fixing the engine a go, with no luck. They finally called in an expert repairman. He looked at it for 5 minutes, gave it one tap, and it roared to life. He sent the owner a bill for $10,000 in which the company owner replied “$10,000? It took two seconds!”. He sent back a revised bill that said “Fixing engine: $1. Knowing where to tap: $9999”
You get the idea. But don’t worry – unlike this anecdote, your clients aren’t going to question the time it takes. It’s actually a huge benefit to your clients if you can get them the incredible result they want in a quicker amount of time. Why would they want to draw it out?
For example, why would my clients want to wait months and months to get their new brand and start making more money? How does that benefit them?
With value based pricing, which is not tied to the time it takes you to deliver (unlike charging hourly), you get to increase your prices over time in step with your growing expertise and efficiency – NOT because the client gets more “stuff” or because you spent more time and effort on it.
I can’t stress this enough… if you want to make maximum profit and have the most amount of free time, it’s soooo important to streamline your services and process whether you raise your prices or not.
Niche who you work with
You’ll want to niche who you work with so you only work with clients who need the same framework of services. In my case, most small services businesses need the same sort of logos, website, copywriting, business cards etc. Of course each business and brand is unique so the end product is not at all the same, but I’m not reinventing the wheel for each person. I can create a repeatable process to take them through, which saves an enormous amount of time.
As another example: If you’re a coach, you’d want to create a signature framework – which is a package of pre-set sessions, in order to get your client to their desired outcome. The goal would be to only attract and take on clients that will be a good fit for your framework, rather than take on any old client and then try to create a new framework for each person. Doing that is a humongous time suck.
Standardize & document how you do things
Standardize and document how you do things like onboarding clients, off-boarding, and all the repeatable steps of your service. If you’re a one-person business, your processes are likely just hanging out in your head. This means that you can never get help, and you waste tons of time just remembering how to do things.
Eliminate unprofitable services
Eliminate some of your services and narrow what you do down to one to three offers. It’s a myth that more services = more money. In fact, the more services you offer, the more you appear like a jack of all trades instead of an expert. You also have to spend way more time marketing/explaining each thing and creating and maintaining standard processes around these services. So figure out which of your services you most enjoy doing and which ones are most profitable, and consider cutting out the rest.
Cut out the BS
Is there certain things you do because you think you have to, but it isn’t really bringing that much value to the client?
For example, when I doubled my prices, I started making people a fancy, customized welcome page as part of their onboarding so it felt like a high-end experience. But at the end of the day, it just felt like a waste of time that didn’t really contribute to their end goal. So I quit doing it. Same with doing things like automatically making people tons of logo variations as part of their package (which is a standard branding thing). For some people this is useful, but for some clients they’re never going to use the variations so why bother?
Automate & delegate
Once you have your niche focused, your services streamlined, and your processes dialled and documented, that’s when you can go through the list of things you do in your business and figure out what high-level steps only you can do, and which steps could be outsourced. Honestly – you don’t have to be doing things like onboarding clients, off-boarding, bookkeeping, preparing social media posts or other repetitive jobs. They’re a waste of your time. Hire a contracted, part-time assistant to do them (or automate some tasks with software) and get them off your plate!