Pricing is the backbone of every business. It’s that lever that can make a tremendous difference between having a thriving business and a thriving life…or not.
Yet, pricing is far from easy.
For starters, it’s not easy because it involves setting a price that reflects a complex interplay of creating and refining your offers based on:
- market awareness and research,
- customer awareness and insight, and
- competitive intelligence.
Then there’s how these factors intersect with how well you operate and run your business.
This includes doing cost analysis and having strategic foresight, so that you can adapt when industry or economic factors affect any or all components of your business.
And this is just the business side of things!
“In’ & “On”
As an entrepreneur or small business owner, you’re constantly straddling the line between working “in” your business and “on” it.
If you’re like most folks with whom I work, you likely love the “in” part. You could do this ALL day because this is where your expertise shines. This is how you serve your clients and customers; it is what sparks the curiosity of your prospects.
And if all you had to do was show up and DO the work, everything would be hunky-dory.
But then there is the business of what you do.
This involves managing and optimizing various key areas – e.g., offer design, marketing, sales, operations + tech, customer service, and finances.
Not only does each area individually require your attention, energy, and resources, you also have to manage how each area intersects with the other. This is considered working “on” your business and it typically requires a different set of skills, mindset, and strategies than those you tap into when you’re working “in” your business.
The degree to which you balance working “on” and “in” your business well is what helps you to navigate the challenges you will inevitably encounter. It’s also how you can capitalize on the opportunities that surface.
Then There’s This
Understanding the role of pricing when it comes to managing the difference between working “in” and “on” your business is part art and science.
While working “in” the business focuses on “DOING” the work, working “on” the business involves everything else that is designed to support your vision and short- and long-term goals.
Both perspectives are crucial and should inform one another.
Especially since getting this combination right is how you’re able to set prices that reflect the value of what you offer and that drives your operational success, profitability, and strategic growth.
But, there are some who believe that setting your prices so that you get this combination right is simply a mathematical problem that can be solved with a calculator.
I am not in this camp.
First-hand experience with running and growing a business for almost 30-years and working 1:1 with clients for almost as long continues to remind me that…
Pricing is also personal.
Just like business and money are personal.
This is another reason pricing isn’t easy.
It is what also makes pricing a persistent challenge.
Nothing Stays Static
I have a theory. It’s one I started to form during the research and writing process for my book, “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate.” And it is this:
People think managing their money should be easy.
In part, I blame the personal finance industry for fostering this idea. It does so through its messaging, marketing, and tools. A threesome that is designed to make managing your money more approachable and less daunting.
Unfortunately, the strides made in this regard have given many the perception that this can be done without much contemplation, engagement, and personalization. Causing many to oversimplify and underestimate the effort, energy, and emotions managing your money requires. Particularly if you aim to do it well.
So, if you (unwittingly) believe managing money should be easy. It’s not unreasonable for that expectation to extend to pricing, too.
I think part of why pricing is a persistent challenge is this expectation that it should be easy!
But how can this be when EVERYTHING in business and in life is in a constant state of change?
On the business front, examples of things that impact your business are: market dynamics (new competitors, change in buyer behavior, or economic factors); technology changes and upgrades (that are required to operate and grow your business); or financing options and terms (as economic factors trickle down to your business).
Plus, you have to account for everything that changes in and has an impact on your personal life, as well. Like the cost of living, the cost of debt, retirement planning healthcare, education, and unexpected expenses.
Pricing is a persistent challenge because, as the backbone of your business, it needs to change in response to what changes. The ones you initiate, as well as those you don’t. In your business…and in your life.
This is why setting the “right” price for your products and services is one of the most critical yet challenging aspects of running a business.
With the Pricing Made Human® masterclass, I give you a framework so that you can meet and embrace this challenge each time you need to. We shed light on the power of tackling your pricing from all sides: the financial, the emotional, the personal.
Please join us! Click here.
