The Price is Right: 4 Business Challenges You Can Solve By Adjusting Your Pricing

Blog post by Embrace Change team member, Jennifer Duann Fultz, founder of Chief Executive Auntie

When I worked in real estate, the adage, “Location, location, location,” was often overruled by “Pricing, pricing, pricing.” The team I worked for, all experienced realtors, knew that entering the market at the right price was key to getting the best offer for the seller. Too high, and the house might sit on the market for months, causing potential buyers to wonder what was wrong with it without even stepping inside. Pricing too low might cause the same issue, or leave money on the table. But a house priced appropriately for its location, size, and finishes would likely garner multiple high-quality offers to choose from and a smoother closing process.

Similarly, pricing your freelance work properly can help with more problems than cash flow.

Most of the questions I get about pricing come from a desire to earn more money. But a lot of the other complaints I hear can also be solved by adjusting prices.

1. Overwork 

This is simple math: If you net more per hour, you can work fewer hours. Raising your rates also means you can take fewer projects at once. This means less sales, administrative, and client communication time. My rates are now to the point where I can choose to only have one major project running at any given time. While I’m still working a similar number of hours, I save a lot of mental energy being able to concentrate on one client instead of having to get myself up to speed on a different client every week.

2. Client Quality

I was as scared as anyone to raise my rates. I was afraid of running out of clients, but I was also worried that as I asked for more money, the clients would demand more from me. The opposite turned out to be true. As I raised my prices (and started offering more comprehensive service packages), my clients trusted me more, asking fewer questions, fussing less over revisions, and just handing me the reins to do the thing they hired me for. Clients who understand the value of their own time are more likely to respect the value you bring by saving them time and doing the work right the first time. 

3. Resentment

Resentment sets in when we don’t properly account for client emails and meetings, rounds of revision, and other client care tasks. Charging more allows you to deliver a better client experience, which also generates referrals and helps even out the bumps of freelance cash flow. Speaking of which… 

4. Feast/Famine Cycle

Contracting is notoriously unstable, since you never know where the next client will come from or if a current client will decide to break up with you. But it doesn’t have to be this way! Higher billable rates means you can afford to spend time on business development and lead generation. You likely won’t close every prospect you encounter, but if you close 25% or 50% at high enough rates, you can pay for the time spent on the ones who got away.

Now, I always say that money isn’t magic. Plenty of businesses earn lots of revenue but their owners are unhappy. You can, however, improve many common business complaints by adjusting your prices.

Ready to start your own profitable business? Join Cynthia and Jennifer for our next cohort of our Jumpstart Your Online Business course!