After writing last week’s post, I recorded a video talking about our cultural tendency to view money in a monolithic manner. When it is anything but.
For example, in business money represents revenue, profit, and cashflow.
Personally, it represents what you pay yourself, how you fund your lifestyle, how much you’re able to save, how you’re able to build wealth and create a legacy, how you’re able to be philanthropic.
These different “representations” add a bit more nuance to your potential answers to the question I raised, “What does money need from you – today?,” don’t they?
Because it means thinking about your answer through one or several of these lenses.
It’s why your money has many jobs, and why if you work as an entrepreneur or small business owner, your prices have many “jobs,” too – in your business and your life.
And frequently, this isn’t as straightforward as you might prefer. Bringing to bear another cultural tendency: the desire to want money to be easy.
This introduces another nuance: I am not saying everything about money needs to feel like an upward slog. Or, that you need to add a level of unnecessary complexity to how you make financial decisions.
Being what I describe as a hardship martyr isn’t healthy or beneficial.
A trap that can stunt your financial progress and success.
Let the easy things be easy
A healthy habit is to track your money. However, most folks just focus on tracking their spending. Don’t be like most folks. Be sure to also track your earnings; new sales vs. repeat sales; booked business vs. accounts receivables; open deals vs. closed deals.
And, let the discipline and practice of tracking be easy by using tools and systems to help make it so.
Because you can’t beat the insight you gain from tracking. It illuminates patterns and trends. It can help you forecast and plan. It can help you determine if your prices are really working for you.
Struggle Less with Hard the Things
When dealing with money, what’s something you find hard?
Here are a few things that immediately come to my mind:
- Talking about money
- Making decisions
- Changing behavior, mindset, and expectations
- Determining what is enough
What am I missing from this list? What would you add to it?
While you noodle on your answers, I’m going to dive into each a bit more because guess what? Not only do they each play a role in how you think about and approach money, in general, but they affect the same when it comes to pricing, too.
Talking about money: As you’ve likely heard me say countless times, money is about so much more than the dollars and cents. Whereas talking about the math of money is easy, having those more substantive conversations that require tackling the emotions of money is another matter. These discussions reveal values, beliefs, and expectations. They tap into things people can often become self-conscious about, e.g., feelings of deserving, identity, and comparison.
You can’t price your way out of needing to talk about money – with yourself, with your prospects, clients or customers, or with your colleagues and peers.
Making decisions: There are some decisions – financial and otherwise – that aren’t binary; they are not right vs. wrong; yes vs. no; better vs. worse.
With non-binary decisions, though, the answer is more in the realm of, “it depends.”
It depends on the context and circumstances. These carry a great deal of weight, making one decision or choice that is “right” for one person “wrong” for another. In the moment of decision, “it depends” can feel extremely frustrating and unsatisfying because it’s not anchored to an objective measure.
When it comes to the non-binary decisions you have to make, you’d benefit from having a decision-making framework that reflects your values, priorities, and preferences.
The same trifecta your pricing should reflect.
And one of the things that makes pricing hard is when your trifecta bumps up against your desire to have the prices you set be “right” for everyone. They won’t be. And sometimes you have to internally wrestle with this fact and what this means to/for you.
Changing behavior, mindset, and expectations: A study I reference often is by Duke University. It found that 40% of the things you and I do on a daily basis is based on habits – habits we practice unconsciously.
Habits that drive your behavior, shape your perspective, and influence your expectations.
Habits that are resistant to change – even when you know they need to be adjusted.
Changing your habits doesn’t just mean doing something differently. Most likely, it also means tweaking your goal, disrupting a long-held belief, and changing aspects of your environment. It probably also means having patience and being willing to occasionally fail on the follow-through until the new (or improved) habit takes hold.
When it comes to pricing, you might be stepping out of your comfort zone. Your prices may be what helps to re-shape your relationship with money – using new (or improved) habits.
What’s enough?: I am astonished by how often I’m asked during interviews to define what’s enough money. Because I truly dislike when people try to determine what “enough” is for someone else. Or, pass judgment on someone else for however they’ve defined enough for themselves. In my opinion, “enough” is deeply personal and based on so many factors.
My issues with the question are: enough for whom? And, enough to do what?
To live on? If so, where? Enough to survive a setback and thrive afterward? Enough to spend without constraints? Enough to travel the world…twice? Enough to retire or scale back working at 35 vs. 55 vs. 75?
A lot of people struggle with defining their “enough to” number/s. If this is you, too, I’m going to bet it is for the same reasons as I often see: You’re looking for certainty where none exists. You want your number to be “correct.” You want assurance that it’s realistic or achievable.
But here’s the thing: Any number will do. It doesn’t need to be correct, realistic, or achievable. However, you do need a number – since it is more directional than anything else.
With regard to your “enough to” numbers, your prices play a key role. They contribute to the myriad of factors that determine whether you can reach them, as well as how long it will take.
I have a tendency to not want anything to go wrong. I know this is utterly ridiculous…and yet.
I also know I’m not alone when it comes to managing perfectionism – with not wanting to make a mistake or miss the mark/goal or not exceeding someone’s expectations of me. I have high standards y’all! 🙂
High standards are all well and good, except when it doesn’t leave room for grace when things go awry. Because there’s no way to avoid making a mistake in calculation or judgment on occasion. Similarly, it’s unlikely that every outcome you aim for will be achieved.
Before I sign-off for today, I’d add these two to the above list: forgiving mistakes and reframing “failure.” Doing either or both is not easy, but it is extremely necessary.
There will be times when you’ll miss the mark either with your pricing, with the scope of your offer, or a combination of both. When this happens, pause, reflect, adjust, and determine what comes next – a revision, or something entirely new.
Dealing with your money and figuring out your pricing may not be as easy as you’d like.
It also doesn’t have to be harder than it naturally is, either.