Why Underpricing (and Overdelivering) Is Creating Business Burnout

We women entrepreneurs keep underpricing ourselves when offering the same service or product as our male counterparts. On average, we price up to 20% less. When I first heard that, I was blown away!

Pricing is one of the quickest and most powerful ways to adjust your business trajectory and make it more sustainable. I’ve seen it in my business and those of my clients. So in this episode of the Promote Yourself to CEO podcast, you’ll learn why properly pricing your offers is the first step to designing a successfully sustainable business and how to figure out the math in your pricing.


On this episode of Promote Yourself to CEO:

4:49 – What is the feast or famine zone, and does your business fall into it? 

13:43 – Discover the two biggest reasons why businesses in this zone struggle to compete. 

16:54 – I demonstrate how underpricing can easily lead to overworking by using the example of a wedding photographer.

20:07 – Taking the wedding photographer example further, this simple step is an easy way to improve your profitability and ease burnout.

25:07 – What if you want to double your rates? You need to take a deeper look at these factors in your business.

30:27 – Pricing impacts other aspects of your business. Michalowicz’s Profit First percentages can help you figure out the math to meet your revenue goal.

33:46 – I push back against the hype of online gurus who have a certain mindset about pricing and the need for a large audience to get enough clients and customers.

38:27 – What if you’re not used to selling at a higher price or booking multiple sessions at a time per client?

45:51 – Keep these questions in mind as you crunch your numbers.

Mentioned in Why Underpricing (and Overdelivering) Is Creating Business Burnout

This post is just part 2 of a much bigger series: 3 Key Strategies to End Hustle and Entrepreneurial Burnout

If you’re ready for a business that doesn’t require working 24/7 and to finally get out of the feast or famine cycle – you’re in the right place! Here’s what you can expect from the series:

1: How Hustle Culture Creates Entrepreneurial Poverty for Women Entrepreneurs
2: Why Underpricing (& Overdelivering) Is Creating Business Burnout

3: Increasing Profit and Decreasing Burnout: A Case Study with Sarah Young

4: Your Profit Roadmap for More Sales & a Truly Sustainable Business
5: From Struggling to Selling Out Your Offers: A Case Study with Leesa Klich
6: Avoid Hustle & Burnout with The Hidden Money in Your Business

If you’ve been loving this series – join the waitlist for The CEO Collective to be the first to know when we open the doors to new members PLUS get a waitlist only bonus!

Keep learning! >>> Increasing Profit and Decreasing Burnout: A Case Study with Sarah Young

Did you know that on average, women entrepreneurs underprice themselves up to 28% compared to their male peers offering the same exact product, program, or service? When I heard this information from a recent FreshBooks study, I was blown away. It really helped me to see that pricing is one of the most powerful ways we can quickly adjust the trajectory of our businesses and make them more sustainable. In this episode, we're going to talk about why properly pricing your products, programs, and services is the first step in designing a sustainable, successful business.

Are you ready to grow from stressed-out solopreneur to competent CEO? You're in the right place. I'm your host, Racheal Cook, and I've spent more than 15 years helping women entrepreneurs sustainably scale their businesses. If you're serious about building a sustainable business, it's time to put the strategy, systems, and support in place to make it happen. Join me each week for candid conversations about stepping into your role as CEO, the hard lessons learned along the way, and practical profitable strategies to grow a sustainable business without the hustle and burnout.

Hey there, CEOs. I hope you're excited because we are digging into the first of three strategies to help you end the entrepreneurial poverty of time, energy, and money, to put an end to burnout, and put an end to the hustle-and-grind culture for women entrepreneurs.

I know it's a lot to promise in just three episodes. But I want you to consider this month like a masterclass in foundational business strategy. Each episode, I'm diving into a specific strategy that can quickly change the game for you and your business.

When I'm working with my clients inside of The CEO Collective, there are always a million different things we could do to help our business. But what I'm looking for are the strategies that take the least amount of effort but yield the biggest results. I don't want to spend time, energy, and money on approaches that are only going to incrementally improve your business and ultimately wear you out because it takes so much bandwidth to incrementally improve, just little slight improvements.

But if you focus on strategies that make an exponential improvement in your business, then you find that you escape that entrepreneurial poverty of time, energy, and money. What are we talking about today? Today, we are diving into pricing.

Pricing is one of my favorite things to talk about with my clients. I find that this is an area we don't talk about enough in business. We don't talk about it enough at all. Honestly, there's not a ton of information out there. There's really no one right way to price your products, programs, and services in your business.

But I often find that this is an area that intimidates a lot of people, that makes us feel uncertain, and also brings up a lot of feelings around our worthiness, around “Are we enough?” around “Can we even do that?” If we don't take the time to set our prices correctly, it can hold us back in our business for a very, very long time.

Why is pricing so key, so important? I tend to see a lot of people, when they talk about pricing, they are essentially pulling a number out of thin air, just because it sounds good, or the worst possible thing is they are crowd-sourcing their price. They're going into a group or looking around and asking people and saying, “Hey, I'm offering this and I'm thinking about charging this much. What do you think?”

Then they're getting a lot of information and a lot of feedback from people who are most likely not their ideal clients, and who don't really have any valuable insight into whether or not this is the proper price for their business. Then they put themselves out there at this price point that is not strategic and it may or not actually help them achieve their goals, which just leads to an ongoing challenging cycle of feast-or-famine and entrepreneurial poverty.

In the last episode, we talked about how so many women entrepreneurs find themselves in entrepreneurial poverty because they are in the feast-or-famine cycle. They got their business up and running, they started to get some clients coming in the door so they have some revenue coming in, but because there's a lot going on behind the scenes in their business—and there is, we all have a lot happening managing behind the scenes—they never quite figure out how to stay on top of everything.

This means that that feast-or-famine cycle is likely happening because they lack a consistent marketing and sales strategy. But more marketing isn't the answer. It's not the only answer. Sometimes for many businesses, there's a bigger reason why they're stuck in the feast-or-famine cycle. This issue is holding them back from the predictable profits they're hoping for.

It's when their business gets trapped in what I call the feast-or-famine zone. The feast-or-famine zone is where a lot of businesses get trapped because they don't have clarity on their strategy to properly price, package, and position their products and services.

The feast-or-famine zone is where you really don't have enough clients and you're not really making enough money. But no matter what tactic you try, you can't really get out of it. You can't really get out of the situation. What is the feast-or-famine zone? I want you to think about a spectrum.

There are businesses that serve mass market at low prices. These are the businesses that everyone knows the name of, these are the Walmarts and the Amazons of the world, and they can afford to compete based on low, low prices because they have sophisticated systems behind the scenes to deliver their products. They have economy of scale, meaning they are able to buy more at a lower price point than other buyers and other retailers.

Their purchasing power is more. They can be the biggest buyer of every single product in their storefront, and because they're the biggest buyer, they negotiate better deals. Those little details aren't visible to everyone else. We don't see how Walmart is the biggest buyer of bananas. I don't know if they're the biggest buyer of bananas, I'm making that up. But if they're the biggest buyer, then they have more buying power and those suppliers are likely to give them a better deal simply because of volume.

That's how these big mass-market retailers work. They have economy of scale, they have more purchasing power, they are the biggest buyer of many of these products. Because of that, they are able to compete at low prices. They also know that because of the volume of business that they do, they can afford to lose money on several categories in their business because they know that their buyer is still going to go buy something else.

A great example of this is Costco. I read recently that Costco has actively stayed focused on keeping certain products at an amazing, amazing price point. An example is their rotisserie chicken. If you've ever gotten a rotisserie chicken from Costco, you know the price point hasn't changed, and because it hasn't changed and it is such a good deal, they know that people are going to come into Costco to get that rotisserie chicken.

Costco is going to lose money on that rotisserie chicken, even though they have completely integrated everything. Now they own their own farms to make those chickens, to grow those chickens, raise them. I don't know the right terminology here. They know they're going to lose money on it but they also know that most people don't just come into Costco to get one thing.

They're going to lose money on that rotisserie chicken, it's going to be better and cheaper than what you can buy pretty much anywhere else, and people are going to still buy other things when they're in the store. They're not going to raise the price of those hot dogs. Do you know if you go into Costco, I know this, I remember from being a kid, my grandparents used to love going to Costco and then we would have lunch at Costco, their hot dog and a drink is like $1.50.

They are losing money on that. But they know that people aren't just going to come get the one thing, they know they can afford to lose money on that because people are going to buy other things. If you're not aware of this, and you're a small business owner who decides they want to try to compete on price against a mass-market company that is set up with a whole lot better economy of scale, with more purchasing power, with more streamlined operations and logistics, you can't compete on that.

I share this because these are the businesses that a lot of people are looking at for how does business work, but you have to be aware of the spectrum here. Mass market low prices is one end of the spectrum. Now on the flip side, there are extremely high-end businesses that serve a high-end clientele at a premium price point.

Let's think about this. You can go to Walmart, and you can buy a white T-shirt for like three dollars. You can even buy a pack of probably 3 or 5 white T-shirts for under $10. Then you could go to Nordstrom and buy a white T-shirt for $35. Then you could go to a designer, a high-end designer boutique, and buy a white T-shirt for $100 or $300.

Did you know that even though Mark Zuckerberg wears the same thing over and over and over again, he's wearing a black T-shirt that is like $300? You wouldn't know because you would just think, “Oh, it's just a black T-shirt. But no, there is a spectrum of pricing here and they are all solving the problem of “I need a white T-shirt very differently for different types of clients.”

You might be thinking, “Well, why would I spend $100 or $300 on a T-shirt when I can get a white T-shirt at Walmart for $3 or at Target for $5?” Well, the reason Nordstrom can price a T-shirt 10 times higher and the designers can price their T-shirts 100 times higher is because they understand their clients, they understand their clientele value, and they understand how to price for what they value.

People who are going in to grab a white T-shirt from Walmart are okay with a T-shirt that is disposable basically. They're not planning on this T-shirt being in their drawers forever. They're not looking at this white T-shirt as an investment into their wardrobe.

But people who go to Nordstrom or who go to a boutique, they are willing to pay 10 to 100 times more because they value things like higher quality, higher quality of fabric, higher craftsmanship, higher level of attention to detail compared to what you would get at Walmart for $3.

Because for $3 at Walmart, that is a product that was mass-produced probably in very undesirable conditions in a factory probably in Asia where people have been exploited because there's no way you could produce it for that low of a price point if you were paying people a decent livable salary.

People are being exploited in order to make that $3 T-shirt. You're not getting the highest quality of fabric. They're not focused on the highest quality craftsmanship, the highest quality cut. They're looking at what can they get out in bulk, in volume for the lowest possible price point.

What happens here with pricing? What are we learning about pricing? People in the middle, the businesses who are in the middle who aren't super high-end and who aren't super low-end, they get stuck in the middle of the pricing spectrum. This is the feast-or-famine zone.

When a business lacks the strategy to price, package, and position their products, programs, and services based on the values that their clients have, then they end up struggling to compete. Here's why. First, their profit margins suffer. The biggest challenge with attempting to be competitive with your prices is that you're automatically, by positioning yourself as price competitive, setting yourself up for price shoppers.

These potential clients are driven by what things cost versus what the value of that product, program, or service is. These potential clients aren't coming to you because they love your work, because they believe in what you're doing, or because they're looking for the results or the transformation they've seen you create. They're coming to you because you're affordable, because you're the lowest price, because you're the Walmart of your industry.

You are a commodity. You have commoditized your business. It is very hard to be the Walmart of your industry as a small business owner. Truly, this is why so many small businesses go out of business because they simply cannot compete by being the lowest price point, especially because everybody tries to do this. So many business owners think the answer to pricing is to be the cheapest. It is a race to the bottom.

The second big problem is there isn't enough capacity. When you're operating in the feast-or-famine zone, when your products, programs, and services are underpriced, but you are maxed out, you are maxed out with how many clients you can work with, your calendar is fully booked, you now have created entrepreneurial poverty on yourself because you're completely booked out, you have to work as much as possible.

The only way to grow your business is to work more and more and more because of the price points, because there's no margin, and it means you're just going to deplete all your time and energy. The only way for your numbers to work if you're the lowest price is for you to be completely booked out. That means you're overworking and you're underpaid.

If you want to create a livable income and you're trying to be the least expensive option out there, you're going to be working extremely hard, extremely long hours. When you break down what your hourly salary is, you might be incredibly depressed. You might realize, “Oh, my gosh, I am not even making minimum wage,” and I have heard the stories. It is heartbreaking.

Let's give you an example of how this might look. Let's say you're a wedding photographer, and I will just say first, I'm going to pull some numbers out of thin air here just for the purpose of an example. But let's say you're a wedding photographer, you have a revenue goal of $100,000 a year in your business.

Now, again, I am pulling numbers out of thin air. I want to keep the math really, really simple. The numbers I'm about to lay out here could dramatically vary based on location, based on experience, based on everything you include in your package, your service, etc. But I want to give you some basic math so you can see how this might play out in your business. There will be parallels here that you could look at.

Let's say that it's a wedding photographer with an annual revenue goal of $100,000 top-line revenue and you start this wedding photography business thinking, “I can easily shoot 25 weddings a year, 25 weddings a year at $4,000 per wedding.” Maybe that seems like a reasonable, affordable number.

But as you get more experienced in the wedding industry, you realize that weddings tend to happen in seasons, which means 25 weddings a year isn't a wedding every other weekend all year long. It's more like there's a fast-and-furious wedding season where you're shooting two weddings every weekend for three or four months in the late spring, early summer, then another two to three months in the fall. Those are the busiest seasons for wedding photographers.

You also have to account, for each eight-hour wedding day where you're doing all the photography, there's another 12 hours or more of client management, just conversations with your clients, and another 20 hours of editing all the photos.

When you start crunching numbers, then you realize all that's going into you delivering this product, program, or service, you realize you're not getting paid hundreds of dollars an hour. You're getting paid more like $50 an hour because of all of the work that goes into servicing a single wedding.

Then you add in your overhead expenses, your website, your marketing expenses, your camera equipment, paying your taxes, hiring a second shooter, maybe even trying to outsource editing, you realize that the top-line $100,000 you were hoping to make, you're only bringing home $40,000, maybe $50,000 if you're lucky, and you were able to do everything yourself.

But you're stretching that revenue out because again, wedding seasons, they're really intense a few times a year and that means you have a lot of revenue coming in at once but other times of the year where it's slow and nothing's happening. That means you've got to be very on top of managing your cash flow, managing your finances so that you can continue to pay the bills that continue to show up month after month.

This is what happens in the feast-or-famine zone. If you're underpriced for your services, it becomes a lot of work for not enough pay. How do we get out of it? We have to raise our rates. We have to raise our prices. This is one of my favorite things to talk about with my clients because I get it, I know it can feel scary.

Raising your rates can feel really scary. It brings up, again, a whole lot of money mindset challenges, a whole lot of money stories you have to work through as an entrepreneur. There are just a lot of hang-ups, a lot of fear around raising your prices. But if there's one thing I know for sure, it’s that the majority of women entrepreneurs are underpriced and overworked for the value that they are providing to their clients.

We are doing too much for way too little. This is a recipe for burnout long term and this is how we end up trapped in the cycle of entrepreneurial poverty. This is how we end up working all the time for not enough money finding ourselves on that path to burnout. Raising your rates to more accurately reflect the value of your offer, the results that you provide, the transformation that you provide, the level of service and experience that you provide can instantly shift your business to being more profitable and more sustainable.

Let's take a look at our example. Our wedding photographer who's on the fast track to burnout with her crazy wedding season schedule. We said that her existing price point of $4,000 a wedding, 8 hours a day of coverage, let's say that's competitive with other local photographers. Competitive not being my favorite word because it means your average, it means compared to everybody else, everything looks the same. There's nothing really differentiating you from anybody else.

You're put in that affordable bucket. It's really hard for them to decide why should they choose you over anyone else because you're all priced the same. You're a commodity. You've made your business a commodity. To make her revenue goal happen of $100,000 top-line revenue every year, she has to max out her calendar and she can't add any more weddings because you don't have the time.

She's already doing two weddings a weekend during those busy seasons. Even a small price increase can make a difference. Even just increasing her prices by 25% to $5,000 a wedding would either allow her to make $125,000 per year, so she's adding $25,000 per year to her revenue, or allow her to reduce the number of weddings that she needs to offer that she needs to cover that she needs to shoot in order to make the same amount of money.

What? Yes. This is why I love playing with the numbers. If you haven't grabbed the Get Paid Calculator, I want to encourage you to go get this tool that we've created so that you can see the impact of a 20% or 25% increase in your business. Because what we often see is that increasing your rates by 20% to 25% is an easy way to increase your profitability because it allows you to make the same that you're making now but working with fewer clients.

You can increase your rates by 20%-25%, drop how many clients you're working with, and still make the same amount of money. Go grab the Get Paid Calculator. It is going to be such a light bulb moment when you start plugging these numbers in. This is huge. I've had a lot of clients that this is our first step in freeing up their bandwidth and giving them back more time and more energy so that they can work on the next stage of building their business.

If they wanted to make the transition from working one-to-one to working with groups or offering more leveraged, more scalable group programs, group courses, things along those lines, or if they wanted to make the shift to bringing on other people to work with their clients, this is one of the fastest ways to start making that happen is to increase your prices by 20%-25%, reduce the number of clients you serve by 20%-25%, you'll make the same amount of money in less time.

It's not a huge price jump so for most of your clients, it's not going to be such a price increase that they run away screaming or anything. But it will free up the bandwidth you need to start moving in the right direction.

Now what if increasing by 20% or 25% is not enough? That could be possible. I want you to think about, let's zoom out, let's not compare ourselves to everybody, but let's really zoom out and say, “What would it look like if I doubled my rates? Is that a thing I could do? What would that look like?”

In our wedding photographer example, let's say she doubled her rates. Instead of $4,000 a wedding, now it's $8,000 a wedding. What does that do to your business? Now when you're looking at doubling your price point or tripling your price point, which I have had to help and coach some of my clients through because they were so undercharging for the level of service, experience, results, and transformation they were providing, then we have to reevaluate how you are presenting your work, how you're packaging and positioning your products, programs, and services.

This is a next-level conversation. Because if you're going to charge premium prices, then you need to have premium positioning, premium packaging, premium level of presentation. We need to reevaluate who your ideal client is. Because a client at $4,000 for wedding photography might be a different type of client than someone who can spend $8,000.

We have to be willing to dig deeper when we're looking at this because pricing is positioning. We need to be willing to do the deeper work here to figure out pricing and how it impacts how we market these products, programs, and services, how we sell these products, programs, and services, and how we deliver these products, programs, and services.

I want you to remember Nordstrom can charge 10 times more than Walmart for a white T-shirt. There's a reason. The focus there is quality. It's a different level of experience, a different level of service than when you go to Walmart. At a higher price point, the $8,000 or $10,000 price point, our photographer is pricing herself out of the commodity group where people are comparing them to everyone else.

Again, it's a race to the bottom to find the cheapest photographer. Now she's likely moved herself into a higher tier of wedding photographers, which means her clients are going to look at her differently. They're going to feel differently about this type of photographer. These are the types of photographers who get booked out, not just months in advance but a year or even two years in advance.

These are the photographers who have impeccable, impeccable customer experience for their clients. Because of their pricing, they have the profit margin to go above and beyond for their clients. These are the ones who surprise their clients with flowers, who surprise them with gifts throughout the year, who send them on their wedding anniversary a beautiful photo print that they have put together for them.

These are the photographers who have raving fans. These are the ones that when they do your wedding, and suddenly you're posting all your wedding pictures from them online, all of your friends are going, “Oh, I want to hire your photographer. They did such an amazing job.” This is what happens when you look at your pricing not just as the price, but as a reflection of the value of the results, of the experience, of the transformation that you offer.

Again, you can get even more high-end than that. But there's no ceiling to the high end. There is a floor to the race to the bottom. I want you to think about are your offers underpriced for the true value and the end result, the transformation I provide to my clients? Am I able to deliver a Nordstrom-level experience to my clients? Am I able to provide an experience that makes them think, “This is worth every penny? She takes incredible care of me. I loved working with this person, I would absolutely pay this again.”

Not just an experience where you're just another name in their Stripe account. This is a lot about pricing. This is a big conversation. It's something that I love, love, love talking about. Pricing is one of those things that if we're not sitting down and crunching the numbers, we're not looking at it as a piece of our overall strategy, then we find ourselves in a situation in our business where we're working too hard, we're not able to reinvest back into our businesses, we're not able to bring on team members to make our businesses easier to run.

That is going to be huge if you're looking for a more sustainable business. We're not doing ourselves any favors if the numbers don't work. If the math doesn't math, then the business is going to be hard. It's just going to be a challenge to get out of that feast-or-famine zone.

Understanding your pricing, understanding the math of your pricing, and how it impacts everything else is crucially important. It's not just the pricing, it's understanding your capacity. How many clients can you reasonably serve? Like we said in that example of our wedding photographer, she felt like she could handle 25 clients a year.

Well, I've had a lot of clients in multiple different industries and niches, and they might tell me 25 clients is way too much. Maybe for a website designer, 25 clients would not be possible to do 25 websites in a year. I've had yoga teachers who told me 25 private clients a week is way too much. They could only handle 15, maybe 18 or 20. But it's a lot. It takes up all of their bandwidth.

I've had clients who work one-to-one and they might say, “I can really only handle six to eight people at a time and that feels good.” You have to understand there is a correlation here between your time, your energy, the level of service you want to deliver, and the right pricing for your product, program, or services. You need to think through the math in order to make sure your pricing is correct for your business.

I love using, again, the Get Paid Calculator that we have created. You can go get a copy of it, go to the show notes, there's a link. You'll make a copy of this. What it allows you to do is to start on the first part of the calculator by figuring out what your take-home salary is going to be.

From there, the second part of the calculator is coming up with the right revenue goal for your business and it uses the Profit First percentages to help you get an idea of how much you would need to spend to run your business: all of your operating expenses, how much you would probably need to put aside for tax, how much you need to put aside for your profit account, and also how much to pay yourself.

From there, it brings them to the third part of the calculator where you can plug in all of your different offers, how many clients you want to work with, and the price points and you can quickly see whether or not it is going to help you achieve your revenue goals.

What I love about this is you can start playing with the numbers, you can increase or decrease how many clients you want to see for each offer, you can increase or decrease the price point, and it just gives you all of the data so clearly and so quickly so that you can make the right decision for you.

But ultimately, I want every person listening to this to really think about the fact that pricing is positioning. If you are feeling overworked and underpaid, then we need to not just look at pricing as just a number that gets run through on your invoices, but we need to think about how it relates to our entire business strategy.

The final thing I want to say here as you're thinking about this, as you're thinking about pricing is there's, again, a lot of hype. I kicked off this whole series with the last episode talking about how much hype and misinformation, misleading information is out there right now by these so-called aspirational business influencer, guru, experts who will put together stuff on their social media or wherever, they'll be on video saying, “Well, to make a six-figure business you only need to sell 2000 units of a $50 product, 1000 units of $100 product, or 100 units of $1,000 product.”

I have a really hard time with this. Because I feel like it's very misleading. I want you to understand that there's more math that needs to happen behind the scenes. There's more that you need to think about. For the audience that I serve who are primarily service providers, expert-based businesses, coaches, consultants, creative entrepreneurs, health and wellness entrepreneurs, these are people who are offering transformational products, programs, and services.

They're helping people to be healthier, to be happier. They're helping people to get better results in their life, their business, or their relationships. These are premium offers. These are not mass-market offers. When you try to pigeonhole your business into a Walmart strategy, it is only going to keep you trapped in that feast-or-famine zone.

If you're selling things at these lower price points, the volume you need to make the math work is so big. The volume you need is so big. When you get into a Get Paid Calculator, we actually have a component in there that tells you based on how you're selling your offer, how many people you need to get it in front of. These low price point offers have to get in front of thousands, tens of thousands, hundreds of thousands of people in order to make the math work.

You have to sell a ton of low-price point offers in order to make a sustainable income. It's a huge barrier to a lot of people who want to have a more sustainable business. Because most of us aren't wanting to be celebrity influencer entrepreneurs. Most of us aren't wanting to have to spend all of our time creating content and just building massive audiences.

If that's you, cool, that's a different model. But if you're running service-based, transformation-focused, results-driven products, programs, and services, you are playing a premium positioning play. You are not supposed to be the Walmart in your industry. Most of us don't want to be online 24/7. We're not necessarily looking to have audiences of hundreds of thousands of people in order to sell enough of that $100 product to make the money that we're looking to make.

I have so many clients who are making $15,000, $20,000, $25,000, $40,000 a month right now with incredibly small audiences, maybe just a few 100 or under 1000 people, definitely not tens of thousands, and they're making great money because they're focused on the right price point for their transformational product, program, or service. They have positioned themselves differently. They are not a commodity.

They are delivering at a whole different level than the people who are trying to be the mass market in the industry, who don't know the names of any of the people who are paying them for their information products or online courses. It is a different game. It is one based on getting results. It is one based on impeccable experience. You need to think about how do you want your business to look and what does that price say about what you deliver in your business.

I encourage you to think about the math, grab the Get Paid Calculator, crunch the numbers. I encourage you to think about the price point that you're putting out into the world. Remember that you can increase your prices as you need to. You can increase your prices on an ongoing basis. In fact, there are a lot of my clients who I recommend to them at least every six months or every year, review your prices and adjust accordingly.

There are some people that just every year, they need to make their price adjustment, especially with inflation the last few years, holy cow. But also as you are getting more experience, as you are improving your results for people, you're creating more resources for your community, for your clients, you are helping them get where they want to go faster and more efficiently, your price may need to be adjusted to reflect that.

I often see people who set a price point and they only make a 5% or 10% increase here and there but it never matched what the value is to begin with. They're always going to be underpaid for what they're bringing to the table.

If you're in a situation where maybe you're not used to selling at a higher price point and you're not used to selling more than like an hour of your time, maybe people are just booking one session at a time with you, then we want to start thinking about positioning and packaging your work into a more clear offer, a more comprehensive transformational experience with a clear result and a clear outcome.

I'm not going to dive into this right now. This is something we work on with a lot of our clients inside of The CEO Collective, but for the majority of the people I work with who are in the field of health, wellness, coaching, therapy, they're working on helping people make change and it's dependent on that client to actually do something for a while for a period of time in order to see the results they're looking for, it's really hard to get that transformation in a single session.

You might get inspired in a session, in a single session, you might get hyped up, you might get motivated, but lasting change and transformation require consistency and it requires commitment. That's on both parts. That's consistency and commitment from the client and consistency and commitment from you.

When you create and package your product, program, or service into a clearer program, then suddenly you can price it more appropriately, work with fewer people, and eliminate the need to constantly be selling people into the next session. When I first started my business, and this was way back in the day, this was 2008, 2009, I knew that I didn't want to offer just one-off hourly coaching or consulting.

The first price point I put out there was $2,500 for 6 months of coaching with me one-on-one. That's like a session every other week, 12 sessions, twice a month for 6 months, $2,500 if they paid in full, $500 a month. That was my first package that I put together and it was so helpful for me because it meant that I needed 20 people to start in January, 20 people to start in July in order to hit the six-figure mark in my business.

For me, that took all the pressure off. I didn't have to get in front of thousands of people at a time, I just had to talk to enough people to fill 20 spots at a time. Now for you, that might seem like a really high price point. I don't know if there's anything I can offer for $2,500. That might be making you uncomfortable. Maybe you're thinking that's too high a price point for your service and you need to think about it. The math needs to math.

Or maybe you're thinking 20 people at a time, that's too many people for me to work with. I can only work with half of that. Well, maybe $5,000 is the more appropriate price point for you so that you can hit your revenue goals. If you can't work with as many people, you just have to make sure that your level of transformation, your level of service, your experience match the price point.

This is a big conversation. You want to keep these things in mind. You really, really want to keep these things in mind as you're thinking about pricing and going through the Get Paid Calculator, you need to sit down and crunch numbers. Remember, if you don't have a massive audience, then you have to make sure the math is working.

If you need to get 10 people in your business, you need to have the marketing and sales system in place, the audience in place in order to get those 10 people coming into your business.

You also have to be willing to have conversations and know that for a lot of people who are doing incredibly well as businesses that are service-based businesses, expert-based businesses offering more premium products, programs, and services, these are the people who aren't flashy online. They're not putting on these crazy intricate launches. They're having conversations behind the scenes and they're getting people consistently every single month into their programs.

They're being very clear, very strategic, very specific in how they're approaching their marketing and their sales. They are not wasting time and energy on attempting to play the influencer game. They're spending their time and energy on being sustainable and successful.

When you get better at putting in that kind of work and having those types of conversations, you'll start to see more and more sales coming in the door at higher price points and it will make such a difference from you three, six months down the road when instead of feeling like you're constantly just trying to get in front of enough people, you can stay focused on quality, not quantity.

Your numbers start to work. This is where we start to see people breaking the six-figure mark, getting into the multiple six figures, and I can't tell you how many clients I have, they aren't on social media, they don't even really have a website. They're still running these incredible businesses and delivering these incredible offers. They're doing things that are very much high touch premium, premium level of service.

These are the true business owners to me. These are the people who have a solid business foundation and they're not chasing the next online trend, social media platform, or what have you. They're focused on what works best for them and what works best for their clients, what truly reflects the transformation, the value, the results that they are bringing to the table.

A lot to unpack in this episode on pricing. This is just scratching the surface. Inside of The CEO Collective, we talk a lot about pricing. We have a lot of additional training on that. But I will encourage you now to just go grab the Get Paid Calculator and crunch your numbers.

I want you to think first what is your take-home revenue goal? What do you want to actually pay yourself, your pay from your business? Then come up with your revenue goal in order to make your take-home pay goal and then it helps you reverse engineer the right prices for your product, program, and service.

You want to be thinking about your capacity. How many people can you reasonably serve? If you need to serve more people, what needs to happen in order to increase your capacity? Do you need to outsource something? Do you need to hire some team? Do you need to bring somebody else on who can work with your clients? What needs to happen in order to serve more people?

Crunch the numbers to figure out and make sure that everything actually makes sense, that your pricing makes sense for what you're trying to achieve with your business. Doing this type of math with the Get Paid Calculator is one of the fastest ways to make sure that it's possible for you to hit your revenue goal but also for you to really get clarity on what is and isn't working in your business.

If you're looking at your existing pricing, you run it through the Get Paid Calculator, and you realize, “Wow, I am way underpriced for what it needs to be now that I've done the math and looked at my numbers.” You have time to course correct and look at how you can increase your prices so that you can be more sustainable.

I hope you love this episode. I hope you are thinking more critically about your pricing strategy. In the next episode, we're going to talk about the second key strategy to help you create more sustainable business, to let go of the hustle mindset, and build that more sustainable business. We're going to be talking about going out there and getting more clients. What does it actually take to get more clients to fill that client docket now that you have the correct price point and what to do without creating more challenges and bottlenecks in your business?

If you love this episode, I want to hear from you. Please take a screenshot of your podcast app. Tag me in Instagram Stories @racheal.cook. Let me know your insights, your ahas, your takeaways. Does this have you thinking about pricing? Did you grab the Get Paid Calculator? Are you going to be doing some price changes in your business? I cannot wait to hear from you.