You’ve decided to raise your prices. You’ve done the math, figured out your perfect rate, get on your first discovery call and…you freeze telling your potential client your old rates! Welcome to Bummer Town.
If you’ve been getting into the same old cycle of *wanting* to raise your rates, but being unable to say them out loud, post them on your website, update your current clients, and take any action, this is for you!
I’m talking about 5 reasons why you’re undercharging for your products and services that have nothing to do with money. Forget pricing formulas and spreadsheets – this is about the emotional side of your money.
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Do you think you’re undercharging?
If you’re a small business owner, I’m confident you’ll agree with me that pricing is critical. Pricing isn’t just about setting your rates. There’s always an emotional element to how you price your products and services in your business. Here are some reasons you may be undercharging that have nothing to do with the numbers!
Not Owning Your Skills (4:06)
The first reason that you’re undercharging is that you’re not owning your skills. You’re not acknowledging how awesome you are at what you do. You may believe that you still need to prove yourself or that there’s a milestone you need to hit to be worthy of a certain rate.
The thing is, every time you hit that milestone, you make a new one, which means your rate never goes up!
When you don’t own your skills, you undervalue them.
When you have thoughts like “I could be better at this,” you’re undervaluing your skill sets. You’re focusing all your energy on the things that you could be better at instead of focusing on all the things you ROCK at!
Owning your worth is more than acknowledging your technical skills. It’s also about owning the quality of your work! I see business owners who own their technical skill sets but not much else. Knowing how to use Photoshop isn’t the same as creating something beautiful. And owning what you CREATE is what makes the difference.
We’re often humble about being awesome at something because we worry that we’ll come off as snobbish if we’re too confident. We worry about appearing like we’re bragging. As female socialized people, we’re conditioned to deflect compliments and to find a negative critique in our work, no matter how minor it is.
As young people, we learn that being humble is more “feminine” and we carry that lesson into our businesses.
Start Owning Your Skills
Step 1: Make a list of everything you’re skilled at.
This isn’t necessarily all the skills that have to do with your business. You want to have a general sense of what you’re good at. Embrace all the things!
Step 2: What are the qualities that make you good at these things?
Look at your list and identify the qualities you possess that make you good at these things.
Here’s an example: One of the things I’m good at is baking. I think I’m good at baking because it’s actually a scientific process that involves chemistry. I’m also very detail-oriented, so I pay close attention to recipes.
Step 3: How do these qualities show up in your business?
Think about where these qualities show up. If they’re showing up in other places, they’re probably showing up in your business too. For example, my detail-oriented nature shows up in my bookkeeping skills. I can catch small, little errors that other people may skip over.
Use this list to remind yourself of the values and skills that you bringing into your business. Look at this list before you get on every discovery call and it will help you build confidence and stay firm on your current rates.
Appearing Selfish (13:27)
The next reason why you may be undercharging is that you’re afraid of appearing selfish. We often believe that if we ask our clients for more money, it means we’re being selfish. Again, as female socialized people, we taught that our role is to give, not take. We equate taking with selfishness and selfishness with rejection and isolation.
We convince ourselves that asking for a raise is being inconsiderate of our clients’ financial situations. We aren’t associating it with self-care. We often view selfishness as a negative trait, and we have a hard time distinguishing it from self-care.
A good example is when somebody asks you to attend a get-together, and you say no because you know you need to catch up on rest. You feel bad because you told somebody no, instead of feeling good because you’re giving your body and mind a break.
The key is understanding the differences between self-care and being selfish. This is especially true with money because money’s so hard to talk about in general so we don’t get a chance to openly process our feelings of selfishness around money.
Understand the Difference Between Self-Care and Selfishness
Step 1: Make a list of everything your business enables you to do.
Make a list of all the activities you’re able to participate in because of your business. What’s your business enabling you to do in your life? Here’s an example: I have a chronic health issue that’s triggered by food, so I’m limited to what foods I can eat, which tend to be more expensive. My business enables me to pay for the foods I need to eat.
Step 2: What personal needs are being met by these activities?
Take a look at the list you just made, and ask yourself, what needs are being met because of these activities? For me, I’m able to keep my physical health in check because I can afford to eat foods that don’t trigger my illness.
Understand the connections between these activities and your personal needs. When you start seeing these connections, you’ll find yourself feeling much less selfish and more focused on self-care. You’re going to see that your needs are basic and nothing extravagant.
Step 3: Make a list of unmet needs.
Make a list of unmet needs because there may be things that aren’t being met by your business quite yet. What’s the impact of not having those needs met?
This will help you realize that when you’re asking for more money, it’s not about being selfish. It’s about meeting your personal needs. It’ll motivate and inspire you to stop undercharging because you need you need a sustainable business for a sustainable personal you.
Being Mean (20:57)
We often believe that if we ask for what we need, we’re being selfish. Then, we try to make up for it by being overly friendly and helpful. We believe that if we’re not nice, then we’re unlikeable. Have you ever had someone ask you for a discount, and you felt like a total jerk for saying no?
Meanness is naturally associated with negativity. The word “mean” has a lot of negative attachments to it. While that may be true, the main problem is that we confuse boundary-setting with being mean. And there’s a BIG difference between the two.
Being mean is saying or doing something with the intention of maliciousness or hurting somebody else. When you raise your rates, are you trying to hurt people maliciously? Of course not!
Are you trying to set boundaries? Setting your prices is a form of boundary setting. Your rate is a boundary that you create with the public around what work you’re willing to do for a price.
Stop Fearing ‘Being Mean’
Step 1: Make a list of all the ways you worry about being mean in your business.
Yup, I’m encouraging you to make another list! What do you avoid in your business for fear of being mean? Raising your rates? Charging a late fee? What else makes you feel mean?
Step 2: Review the list. Identify the items on the list that are actually a boundary.
With that list, identify the items on that list that are actually boundaries. What of those items are malicious? Which of these are a form of boundary setting? And even more, why do you need to set these boundaries. I’m pretty sure it’s not to be mean to others, but to be kind to yourself!
Beliefs About Value and Worth (27:18)
Your beliefs about value and worth come from unresolved experiences that impact your sense of self-worth around money. These are experiences that happened to you at some point in time and now impact how you react to your pricing and, even more, your worthiness of money.
These experiences can come from early experiences, money modeling by family members, or conversations you have with people in your lives like your parents or primary caregivers. The way that they interacted with money can teach you about your own value and worth.
Here’s a very personal example: When I was a kid, I watched my parents fight over child support for years. My father refused to pay my mother child support, which in turn, is what financially supported me. It made me feel like I wasn’t worthy of being support financially. It was also confusing because my father loved me, yet he wasn’t willing to pay child support.
What I internalized from those years of watching conflict around child support was that the person l loved most in the world refused to take care of me financially. For years, I undercharged in my business because I didn’t believe I was worthy of receiving financial support because if my dad wouldn’t do- why would anyone else?
Identify Your Beliefs About Money and Worth
Step 1: In what ways do you feel worthy or unworthy of money?
What do you think you’re worthy of and what do you think you aren’t worthy of? Is the word worthy difficult for you to wrap your head around? What do you allow yourself to do with money and what don’t you allow yourself to do with your money? How do you allow yourself to interact with money and don’t allow yourself to interact with money?
If that’s still too abstract, think about your spending. What do you allow yourself to spend money on? What don’t you allow yourself to spend money on? That’ll clue you into your view of worthiness. A lot of times, we don’t spend money on stuff because we don’t think we deserve it. That’s an excellent way to gauge where you believe you’re worthy or unworthy when it comes to money.
Step 2: Pick 1-2 items on this list and find the origin.
Ask yourself questions like where do these beliefs come from? Was this something you experienced or was this an experience that was passed down to you? Is this an external message you received or an internal message? Sometimes people are telling us these things, and sometimes we’re telling ourselves these things.
Step 3: How would you relate to money and your value if you didn’t hold this belief?
If you removed this belief, what would change in your relationship with money? Figure out what would be different. What’s different is probably the thing you’ve been really wanting to do but haven’t been able to bring yourself to do yet. You’ve been stalled because of something that you can’t figure out.
Fear of Rejection (35:31)
The last one is a fear of rejection. You’re worried that if you charge the rate you want to charge, that your potential clients will reject you.
Everything that we talked about up until now will be right about you. You’re selfish. You’re mean. You aren’t valuable or worthy. You aren’t as skilled as you thought you were.
We fear that if somebody says no to what we really want to charge, it’s proof of all of these things that we believe about ourselves. We use rejection as proof of our limiting beliefs. What’s funny is that we can have 10 leads come our way, and 9 of them will say yes. But we get one person who says no and we focus in on that one rejection.
Stop Fearing Rejection
Step 1: Journal about your fears of rejection
What does rejection prove about you? What are you terrified of? What becomes “true” if you are rejected for asking for more money?
Step 2: Dig deep into what you’re terrified of.
Use your answer from Step 1 to acknowledge what you’re really afraid of. You may have read this article and thought none of the other reasons resonated with you. But now maybe they do! Go back and read the ones that stand out to you now that you’ve dug deep.
Get down to business on what’s keeping you from charging what you’re worth with my special worksheet. You’ll be able to trace the roots of your money shame and start charging what you’re worth.