Category Archives: Practical Money Path

Pricing—Are you charging for your past?

On Friday I took my ten year old son in for a doctor’s visit. It’s a very busy office. As we were walking down the hallway, he asked me, “Mom, how much does this cost?” I replied without really thinking, “Oh- probably about a hundred dollars.” (Thankfully I do have insurance!) To which he fairly yelled:

“This costs a HUNDRED BUCKS? NO WAY!!”

And of course all the heads turned our way as our nurse quickly hustled us into our little room for our 15 minute visit.

I then proceeded to tell my son that the doctor had gone to medical school and paid a lot for her education, putting in many years. And that hundred dollars also helped pay the nurses. And the building had to pay rent and buy all those supplies. Of course by this time he was engrossed in examining the medical equipment pinned to the wall.

But since I still have YOUR attention, let’s think about us—do we charge enough money to really cover all our costs, including all the time, energy and money we’ve put into becoming who we are?

When you think about pricing, you may be overly fixated on charging for your time. Of course you need to charge enough for that hour of your life that you just gave to someone. And you also need to charge enough to cover all your other costs such as your web development and paying your assistant.

You need to charge enough to cover your prep time as well. It’s not just about your face-to-face time with clients. I get into my office at 8am and pull all my client files for that day. As a money coach, I have a lot of interesting and engaging clients. I remind myself where we were last time and I formulate a game plan for our upcoming session (knowing that any game plan may get thrown out the window depending on what they bring in with them!)  This takes time. And good coffee.

But pricing correctly goes beyond this. I have years of experience. Some of this is as a money coach and some of it is in related fields. At this point, I rarely come across something that I haven’t seen before, and I draw on this past experience. It’s not just book knowledge. Sometimes I go with my gut in deciding when it’s time to broach certain subjects such as someone’s past money history or what is really going on with their spending. The hour they spend with me is built on many years that came before that hour.

What about you? You are the sum of your experience and I know that you bring this experience to bear in your work, as you should.

Havi Brooks writes a fabulous blog called The Fluent Self—and she just wrote a really great post on pricing called Coming Up with Prices. Wanted: Ninjas.  She talks about many ingredients that should go into pricing such as all the invisible time that goes into your work like your prep time and all your really invisible work and time that goes into what she lovingly calls “administrative crap”.  (Havi- I have to agree with you on this one. Thank goodness we both have great assistants!)

And she talks about charging for your “invisible past time”.

That hour of service you’re giving isn’t just that hour.
It’s everything that has come together in your life to make you the person you are.
It’s all of your acquired wisdom. All of your experience. All of your insight. All of the abilities and qualities you’ve been developing in a lifetime of being you.

I couldn’t agree more.

Let go of being perfect. Stop living in fear of not being able to answer a client’s question. You’ll never know it all. You’ll never be perfect. But you are still worth charging a lot of money. You have a lot of wisdom, experience and insight that comes from your past. This is huge. Do you use these things to help your clients get the results they want? Of course!

So ask yourself: Are the results your clients get worth more than what they are paying you? If the answer is yes, than stop doubting yourself. And raise your fees 10% right now.  Because it’s about more than that hour. You have a whole lifetime that has brought you here.

Claim all of who you are. This is worth a lot.


TIME TO EARN MORE?

If you would like to earn what you’re truly worth and step into greater abundance, please see Mikelann’s Unlock Your Earning Power toolkit.   Identify what has been holding you back, learn the skills to ask for more and start earning at your true potential. For both self-employed and salaried women.


 

How to take time off and not be stressed out financially

It’s hot out here in Seattle! I don’t feel like working, but I’m making myself do some writing and prep for my clients this week. I’m really looking forward to taking off the second half of August.

Wait! Did I just say I’m taking TWO WEEKS off next month? How is that possible? How will I survive financially? I’m self-employed, for crying out loud. The bills still need to be paid in my business, and I still need to take my same paycheck. And as a single mother, I don’t have other income sources to support me when I take time off. So what is my secret?

Let me tell you about a conversation I had years ago with my friend and colleague Joan Casey—an awesome psychotherapist who teaches you how to find and hold onto your boundaries. One day after we had become friends she started talking about going off to India for the entire month of August. She was really looking forward to her trip. I had gotten to know her well enough to realize she was fully self-employed and lived on what she earned. I asked her if this was the trip of a lifetime. “No, not really. I take every August off—the whole month”.

I looked at her dumbfounded. “How?!”

“Oh, I just have my August fund.” She replied. She explained to me that she simply had a dedicated savings account that she called her “August fund” and she transferred money into it regulary. This was how she funded her time off.

It seems so simple. Why had I not seen it? So I decided to set up my own “August fund”. I set up a dedicated savings account linked to my business checking account. I calculated the amount I would need to fund my business in August, including the amount I would pay myself. Then I cut it in half and decided to try to take half of August off. I took this amount and divided it by eleven. (Eleven months not including August.) I went into my business budget and created a new line item expense called “August Fund” and put down the monthly savings amount. In September, I started funding it.

The following August, I took off almost two weeks. It was beautiful. That was six years ago.

For me, it makes sense for several other reasons. August was always a difficult business month. Many of my clients were on their own vacations, and I noticed that my cancellations were higher than normal. My income was always down anyways, and I was frustrated on top of it. I was trying to work while everyone else seemed like they were playing.

Now that I take off half the month, I stack my clients into the first half of August. It’s a busy time for me. The first week of September is heavier than normal too. I’m happy for both of these. Everyone knows I’m out the last two weeks of August, so we all plan according.

Beautiful, isn’t it? I wish I could say I’m going somewhere this August. But since I just bought a house, I think I’ll stay put and unpack. Maybe I’ll even decorate. I’ll watch a lot of movies and take my son to the beach. Maybe every day.

September is coming. Can you set up a dedicated savings account and transfer some money into it in September? Even a small amount will feel great. You can do it! You deserve it.

What to say when people ask “What do you charge?”

Many service providers are uncomfortable with this question and they mumble their fees, hoping the prospective client will hire them. Guess what? You shouldn’t answer that question! First of all, you don’t know if this person is a good fit for you. So why would you launch into talking about your fees if they aren’t even in the right place?

But here is a better reason to not answer their question right away. By answering the question, “What do you charge”, it robs you of the chance to educate them about the value you provide. And it’s hard to talk about your value if you don’t even know what they need or want from you!

Instead, when someone asks about your fees, respond with,

“Can you tell me a little about what you would like done?”
or
“Can you tell me a little bit about the issues you would like to work on?”

The first question could work well for a copywriter or web developer. Let the person tell you about their project so you can target your response to their needs. And are you the right person for them? The second question could work well for a therapist. They may bring up an issue that you don’t really work on, so before you waste too much time, you could make a great referral.

Either way, with a little bit of information, you will have a much more productive conversation. I always start this way, listen to them for a while, and then tell them about how I could help them (if I think I can). I explain the benefits of working with me and how I work, focusing on their issue and the results we would work toward.

Here is another thought. Fabienne Fredrickson, the” Client Attraction Mentor”, wrote about this very issue on her blog recently. She writes, and I agree, that if people are overly focused on price in that moment, there isn’t any room for a discussion on value. So she advocates setting up a different time to discuss with them what might work for them. For example, when she gives a talk and people come up to her and say, “Hey I’d like to work with you. What do you charge?” here is what she advises:

The solution? Don’t give them your rates on the spot. Instead, invite them for a conversation to be held at a later date where you can fully describe the value they’ll be getting from working with you. I call mine the “get-acquainted session,” you may call yours a free-consultation, whatever. The important thing is that’s where the magic happens. That’s where you can find out more about them, get to the root of their problems, describe solutions, and they sell themselves into your services, based on value.

Fabienne has many different programs that potential clients could choose from. Some programs are more expensive than others. So by setting up a date to talk with them at a later time, she can help them pick the right program for them. Go to her blog for more thoughts from her. She also gives you her exact words she uses when people ask her “the” question.

I’ve used the same techniques and this works very well. I want to help a prospective client find the right fit for them, whether it is private money coaching with me or as a member of a prosperity group. And sometimes I steer them to a different service provider. When you have a prospect’s best interests at heart, and you are in integrity, it’s always a win-win.


TIME TO EARN MORE?

If you would like to earn what you’re truly worth and step into greater abundance, please see Mikelann’s Unlock Your Earning Power toolkit.   Identify what has been holding you back, learn the skills to ask for more and start earning at your true potential. For both self-employed and salaried women.


 

What Do Your Fees Say? The Tale of Hiring a Therapist

I always tell my audiences that their fees say things about them. Many people hope their rate says they are a “good deal”. But is this what you want it to say? Is it making you look second-rate?

Remember that pricing is about perceived value. We all assume that an expensive bottle of wine is better than a cheaper bottle. Of course this may not be true (I have my favorite Trader Joes bottle!), but price does convey a message to us.

I thought about this when a friend recently told me about her quest to find a good therapist.

My friend decided she wanted to do some therapy on a particular issue, and set about finding a good therapist. She was committed to doing the work, and really wanted a good therapist who specialized in a particular area.

After talking with about four therapists over a week, she grew frustrated finding the right one. Rate-wise, she discovered that they charged in the $105 to $145 range. She heard about a potential therapist from her doctor, and called her. This therapist seemed like a great counselor, and my friend began to wonder if this was the woman. She actually had experience with my friend’s issue!

When my friend asked, “What are your rates?” The therapist paused for a while, and then said “$80 an hour. And of course I have a sliding scale,” She offered hurriedly. My friend thanked her and hung up. She didn’t call the therapist back.

When I asked her why, she said it seemed like the therapist must be brand new, or wasn’t confident in her skills, or had few clients and was trying to attract new ones. None of this appealed to my friend, who really wanted help.

I was frustrated because my friend did need help. Personally, I wish she had hired this therpist. And I can’t help but think that the therapist’s own money issues got in her way. (My guess is that she is working herself to death for very little money or having a hard time attracting clients.)

The real question is– what about you? What do your rates say? Remember, not everyone should be able to afford you. If everyone can afford you, you’re not charging enough money. You do want to attract the right type of clients. (And clients who are very fee sensitive can be very difficult to work with. It takes a lot to make them happy.)

So what do your fees tell people? Do they convey confidence?

Instead of discounting, try this to feel good about your full fee

Are you afraid that people who need you can’t afford you? And is this one reason why you discount your fees at times?

I was talking about the topic of my new workbook  Emotional Pricing~ How to Feel Great Charging What You’re Really Worth, and a colleague said to me, “I don’t know about all of that. I don’t feel right charging a ton of money—what about people who truly need help but can’t afford a lot?”

First of all, isn’t it interesting that she immediately assumed that charging what you’re really worth is a “ton of money”. Hmmm. You can bet that it will be hard for her to charge enough money because she assumes that it is just too much!

But here is the real issue: the fear that people who need you can’t afford you. So let me be clear about something: If you want to make more money, you need to work with a target audience who can afford to pay what you need. There simply isn’t any other way to say it, or do it.

I am very passionate about my work and I want to help the world as well, so I make sure I charge my full fee and make great money. Otherwise, I have no time and I feel resentful. (If people are not paying you enough money, it takes a lot of clients to pay the bills….) If I didn’t make enough money, I would eventually have to close my business and take a full-time position somewhere. And before I got to that point, I would experience a lot of deprivation and frustration with how little money I was earning. I doubt I would be in the best frame of mind to really do my best work. Being under financial stress is incredibly draining.

So I charge my full fee. Then, to “give back,” I do a certain amount of pro bono work that I feel really helps the world. I donate some of my time to causes I feel strongly about.

Years ago I heard the “Rule of the Three Fs.” Do your work for your full fee, do it for free, or flee. The point of the Rule of the Three Fs? Don’t discount! So, one way to feel like you are giving back is to do just that: give back. Charge your full fee and decide to donate a certain percentage of your time to a cause that could benefit from your work. It is a much cleaner way of doing business.

Doing a certain amount of pro bono work on the side can be very satisfying. Many powerful business women become strong pillars in their respective communities because they give back some of their time to causes and charities that are personally important to them. For example, I will occasionally do free seminars for organizations in my area that service disadvantaged women. Some of these women are domestic abuse survivors, or have lived their entire lives far below the poverty line. I care about these women, and know full well they can’t afford my fee, so I will do seminars a couple of times a year on how to ask for a raise, how to negotiate or how to raise your fees. I will talk with them about the pattern of underearning and discuss ways to stop underselling themselves.

These women are not my “target market” – they simply can’t afford me. But rather than discount myself or offer a sliding scale, I’ve found other ways to “give back.”

So stop with all the bartering, sliding scales and discounts. Charge your full fee. (Your “full fee” may still not be high enough. You may need to raise yours fees. But that is a different subject.) You’ll make more money with fewer clients if they pay you enough. Then use some of your time to truly give back to the world.


TIME TO EARN MORE?

If you would like to earn what you’re truly worth and step into greater abundance, please see Mikelann’s Unlock Your Earning Power toolkit.   Identify what has been holding you back, learn the skills to ask for more and start earning at your true potential. For both self-employed and salaried women.


 

Keep the Faith- 3 Ideas for Pricing

I want to remind you that “underearning” is about your personal pattern of earning less than your potential. Underearning is not about the economy.  It is about you and your history and feelings around charging people and receiving money.  The economy is an outside factor that may also be affecting you.

When you undersell yourself— setting your fees too low and not raising them appropriately, that is underearning. When you habitually don’t ask for what you need and want, that is underearning. When you ignore opportunities or don’t market yourself consistently, that is underearning. The list goes on. And now more than ever, it is important to look at your part in this.

The truth is that women who have a clean relationship with money are not as affected by outside factors such as the economy. Are they still affected? Yes, they can be. But women who fall into the pattern of underselling themselves and their services are far more affected when outside factors strike.

Earning your worth is part of a personal growth process that all women must go through. This process should not be suspended when outside forces hit! It is about valuing yourself and knowing that your work is worth good money. Outside forces come and go, but the process of earning your worth should never stop. Don’t let outside forces keep you down! Even now, in the midst of so much confusion, you should still be focused on not underselling yourself.

If you take a moment to separate out how you are being affected by the economy vs. how you personally feel about charging people money, you will see that they are two different things. So if you are concerned with the economy but devoted to earning your worth, here are some ideas about pricing:

Price Adjustment
Instead of telling your clients you are raising your fees, consider calling it a “price adjustment”. You should raise your fees by at least 5% every year simple to not fall behind! It’s called inflation. And simply raising them 5% doesn’t honor that fact that you are becoming more experienced. But if you simply can’t imagine raising your fees right now, consider a simple 5% price adjustment. For example, you could say, “In light of the economy I have decided to only implement a five percent price adjustment.” This way you won’t fall behind.

Value Added Route
Go the “value added” route. Instead of discounting your services (I know some of you are tempted!) can you hold firm on your fees and find something of value to entice new clients? For example, can you include an eBook or a tips report? Can you give them a one-time only extra 30 minutes? Make sure that if you do give something away, you let them know it loud and clear so they don’t take it for granted. On the invoice you should list the full value of what you did and then say “no charge”. Make sure people appreciate you.

Hold Your Ground
Hold firm. Don’t back down from your fees. If now is not the time to raise them, so be it. Can you simply stand your ground and make good use of any extra down time you have? Over the last three months I have used extra time to update my bio on my website, finish writing a new workbook and start working with a new marketing consultant. I’ve been doing a lot of writing! I did pair back some expenses and then I held my ground on my fees. After three months of slower work, the phone started ringing more, partly because of all the marketing I did in my down time! (And as I’ve shared with you before, I start each day with a gratitude practice. It keeps me sane!)

Keep the faith that it IS possible to earn what you are really worth.  Take heart and don’t give up! Know that you do deserve to earn good money. This is a process. Commit to working on your relationship to money and it will pay dividends long into the future. In the meantime, I vote that you hold your ground.

One Way to Keep Your Goals in Front of You

Well, it’s January and I am knee-deep in work. Luckily, I’ve also set some time aside to work on my goals for the year. I think the topic of goal setting gets a lot of lip service, but I suspect many of us fall short in actually setting good goals for our businesses.  What about you?

Part of the “gift” of being in business for yourself is that you have control over your work life—and control over the money you earn. Yes, yes. I know it doesn’t always feel that way! Self-employed women can earn less than their salaried counter-parts as we struggle with pricing ourselves right and being visible enough to land customers. But when you look at lists of wealthy women in the United States, you will see a large percentage went into their own business. Oh, the possibility! And what did they all do? Set goals!

Simply put, setting goals is key to earning more money. After all, being self-employed means you are the captain of your own ship. So where, exactly, are you steering your ship? Are you even steering? Or are you simply drifting about, happy that you are not sinking? (Are you pre-occupied with taking on water?) Goal setting is about setting a direction. You may not end up exactly where you thought, but you’ll land someplace really cool if you set the course and actively steer.

Over the years I’ve learned that goal- setting is not an event, but a process. For example, I have a spiral notebook that I carry with me everywhere. The front cover always says “work journal” with the date on it. I use this for to-do lists, ideas, note-taking etc. Not every page is important. But there IS gold in there at times. (Countless times I’ve written down a great idea and then forgotten about it. Later I go back and see it and think, “Wow, what a great idea I had!”) It takes me about six months to fill a notebook. I then put an end date on the cover and file it. I have about 15 of these now in my file cabinet. They are the true history of my business.

Why am I sharing this with you? On the very first page of each notebook I write down my current goals—both personal and professional. I make them “SMART”. (I’ll blog about that later.) Everyday, before I check my email, I open to the first page and read my current goals. I read them three times. Then I go about my day. Whenever I start a new spiral notebook, the first thing I do is re-write the goals into the first page, often changing them, dropping some I’ve accomplished and writing new ones. This makes it a living, breathing process.

 What can you do to make goal setting a process and not an event?

Ode to Five Percent—Coping with Client Cancellations

It’s snowing outside. And here in Seattle, where there are (maybe) three snowplows, everything stops. I mean everything. And of course this fairly rare occurrence would fall during one of my busiest client weeks. I could just scream! I am stacked back-to-back with clients every day this week, partially because I am not seeing clients the last two weeks of December. Today, I can’t even get to my office. And even if I could, many of my clients could not get to me. (Of course my clients that hale from the mid west laugh at us ridiculous Seattlites, and then exude exasperation as they take their four wheel drive vehicles onto roads that are not cleared of snow and try to weave between Seattle drivers who don’t know how to drive in the snow. It’s like being inside a video game. But I digress.)

The bottom line is that this is costing me a lot of money. So what is to be done? First of all, as soon as the weather forecasters started forecasting, I sent a proactive email to all my clients scheduled this week with a snow back-up plan. I offered to convert their appointments to the phone. Several took me up on it right away, as this is also a busy time of year. (Yes, not all of you can do your work via phone, I know. You can’t mail in your haircuts….) For my part, I took all my client files home with me on Tuesday in case I was at home the rest of the week.

Yesterday, I worked at home on the phone and “saw” many clients. It was quite nice, actually.

But there are some clients that I simply have to see in person. Two of those clients are cancelling today and will be re-scheduled for January. This one is truly no one’s fault. Many of my clients are self-employed and they “get it”. They don’t lightly cancel on me. (I have a clear cancellation policy in place that I do enforce, so generally speaking, my clients are very respectful.) But if neither of us can leave our house, well….

Why am I not super stressed out? (Okay, this is stressing me out somewhat.) Because at the end of every month, I add up my total business revenue (the total amount that was paid to me that month) and I tuck away 5% of it into a separate saving account. This is not my tax savings account. That is different (and a higher percentage!) This is simply my “five percent fund”—my business safety net account. A safety net account is used when there is an interruption in income, regardless of the reason. That is it’s only purpose. Maybe you pull from it to go on vacation (no clients that week!) Or maybe you pull from it when it snows and many of your clients cancel.

Sigh. At least it is very beautiful here. But I do confess that I’m one of those awful snow drivers you don’t want out on the roads.

How much is 2009 going to cost me? Being proactive helps combat fear

As you read previously, I’ve been working on my 2009 income and spending plan for the Women’s Earning Institute. I planned out all my income streams for 2009. It was quite lovely. Then I had to plan out what it would cost me…. The process below is what I would recommend you do for yourself—it is how to think about your own business money plan for the year.

There is a lot of fear in the air. Taking the time to actively plan before the year starts off helps us feel like we are in control. Don’t get caught in being reactive. Take the time to plan!

Periodic Expenses
Before I got too far, I made a list of my business “periodic expenses”. This is something I have my clients do. I have some business expenses that don’t pop up every single month, so if I don’t list them out, they can feel very “unexpected” when they do come up. For me, this is things like travel expenses, annual membership expenses and computer upgrades. Take the time to think about your irregular periodic expenses. (Periodic expenses are one reason why business owners underestimate the cost of business—they don’t come every month.)

Needs and Wants
Next, I spent time thinking about what my business needed and wanted this year. For example, I WANT to go to a couple of expensive trainings. And I want to renew an expensive membership I have, though I could let it go. I need to upgrade my computer. I need a new office chair. I want to hire a particular marketing consultant. I simply listed out my business “needs” and “wants”. Some of these things were on my periodic expenses list. Some came up for me as I simply thought about what I really wanted and needed in my business. What do you need and want for your business this year?

Expenses
Then I started working on my expenses for 2009. (I use a special planning tool that is a program that runs in Excel. I use it with many of my clients—be it personal or business finances we are looking at.) I simply went through my spending plan and put down what each category would cost me—rent times 12 months. Phone times 12 months etc. I put in all my “periodic expenses” like travel and computer upgrades.  I put in a lot of my needs and wants. Most important—I put in my salary! Wouldn’t it be great if I could increase it this year? This process will help me figure that out.

Big Picture
In the end, I sat back and looked at what my 2009 income plan was for my business and what my 2009 expense plan was for my business. Guess what—it didn’t work. Sigh. But that’s okay. The first time through feels a little bit like a skeleton plan. It gives me something to work on and think about. There are some decisions I need to make and seeing this laid out before me really has me thinking hard….

Tomorrow I’m taking my entire plan to a coffee shop to keep thinking. I’ve got to get this plan into balance! It makes no sense to start off the year with a plan that is out of balance.  Having a plan helps banish free floating anxiety! (Call me if you need help creating your own income and spending plan. 206-634-0861. Or see link to my private work.) I wish you abundance as you plan your next year.  Remember, you can be in control of your life and business.

Time to make a plan for 2009 income—and open up to prosperity

I’ve been busy creating my 2009 income and spending plan for next year, for the Women’s Earning Institute. I do this work with clients all the time, and know first hand how powerful it is. (Don’t think for a minute that I don’t practice what I preach!) An annual income and spending plan process incorporates looking back at what worked and didn’t work, dreaming about your future, goal setting, running scenarios, looking at costs and getting realistic, all in one!

This is also about opening up to more prosperity in your life. The law of attraction, which so many people talk about, demands that we be specific in what we are trying to attract to us. So give yourself something specific to focus on! Exactly how much money do you plan on making in 2009?

The first thing I did was take a good hard look at this year’s plan. I looked at what I planned for my various income streams for 2008. Some things went exactly according to plan. I planned how much money I was going to make in my private money coaching practice, and it came in just about as planned. I planned my business support groups income, and there were no surprises there either. (Though knowing what the plan was for the year kept me focused on keeping my groups full!) But some of my income streams didn’t pan out. As some of you know, I’ve killed some programs. And I’ve launched programs that were never in my original plan for 2008. Back in July I took a good hard look at my 2008 plan and made some serious adjustments in some of my plans. What a relief to be able to adjust!

These past weeks I’ve been debating my income streams for 2009. (I’ll talk about expenses in my next post.) I’ve gone to a coffee shop on more than one occasion with a calculator, notebook and hardcopy printout of my 2008 plan and actuals. Then I’ve listed out what I WANT to do in 2009. For example, I want to continue seeing private clients. I want to continue my groups. Then I listed out my other income streams: the rate-setting toolkit, live seminars, other product ideas, my 12 week (3 month) teleclass program, etc.

I kept asking myself: how do I want to spend my time? What makes me happiest? What do I want to do more of this year? What do I want to do less of? And how can I open up and stay open to more prosperity and abundance? I’ve done a lot of journaling in the last month!

Then I played with my trusty calculator and started running various scenarios. How many rate-setting tool kits do I plan to sell this year? I wrote down the total amount that I want the toolkits to generate. How many women do I want in my 3 month overcoming underearning teleclasses? How much money would this be? How many times will I offer live seminars on rate-setting and at what price point?

You get the point. It feels expansive and, truthfully, a bit overwhelming at the moment. I am planning some things that I know I’ll need help with. (Remember, I’ll talk about expenses in my next post.) But I am in charge of my life and my business. I have to decide what direction I want to go in. This is about living a conscious life. I’m not going to wander into 2009 without a good plan! Oh no. Of course, plans change and need to be adjusted. That is life. But a good plan will take you far. As for me, planning has taken me a long way!