The Importance of Knowing your Worth

I often hear people saying that they have a ‘little’ business, almost like it’s a hobby or they are embarrassed to admit they are a business owner.  But why do this?  Why hide your light under a bushel?

Is it because you don’t know your worth?

Starting and running a small business is no small feat. It requires dedication, hard work, and a constant juggling act of tasks. One crucial aspect that often gets overlooked in the hustle and bustle is knowing your worth. As a small business owner, understanding the value of your services is essential for sustainable growth and success.

In this blog post, we’ll explore why knowing your worth is crucial and provide some practical tips to help you navigate this important aspect of owning a business.

Know Your Worth

This is not a difficult as it sounds!  Your business plan and your core values should clearly set the direction of your business.  Think of them as your Satnav, you put the destination in at the start of your journey as to where you want to go.  You know the value of what you do, make sure that you communicate that.  Our values help to shape us and to appreciate our worth.   (see our previous blogs about our values).

If you need help with your business plan, we offer a one day business planning session to help you get on the right track.  Fill out our form to find out more.

When working out pricing, you’re likely to ask yourself:

#I know what my service is worth, but what if no one will pay that?

#Should I charge the same as my competitor?

#Do I need to take on every client who walks in the door in order to make money?

#How do I charge more when my costs go up?

There will be far more questions going through your head, but lets just work on these for now.

Tips for Knowing Your Worth:

Knowing what your service is worth

What do you offer that is different to your competitor?  What’s your USP? Make sure you communicate this so that others are aware of why you may charge more than they do.  Make it clear why you love what you do, your passion for your work will excite others and make them want to join you. Say it in your own way.  Don’t use technical language or business speak if that’s not your style. This will also help with recruitment and retention of brilliant employees. (See more on this in our blog)

 

Setting a fair price

Setting the right price for your products or services is a delicate balance. If your prices are too low, you risk undermining the value of what you offer. On the other hand, if they’re too high, you may lose potential customers. Knowing your worth allows you to find that sweet spot where you’re compensated fairly for your efforts while remaining competitive in the market.

It’s very difficult to work out how much to charge your clients.  We get it as it’s something we think about and evaluate all the time.  Should we find out what our competitors are charging and charge less, or the same?  We think not.  The services we offer and the way that we work aren’t the same, so the prices should reflect that.

A great way to figure out how much to charge your clients other than your costs is to know how much your services are worth.  That’s not just how much you spend delivering the service, but what your service is worth to the client.

Think about your ideal client.  By client, we mean the people who pay for your service, this is different to the receiver of your services.  In homecare, this would be family members or the local authority for example.  What are their expectations?   These will be very different, with family members expecting excellent personal care standards and that their loved ones are treated with dignity and respect.  The Local Authority might be more ruthless and want quick calls delivered as cheaply as possible but still maintaining high standards!

 

Confidence

You don’t need to take on every client who walks in the door in fear of losing out. Confidence in your business and what you provide is key. When you know your worth, it shows in your interactions with clients.. Confidence can help you negotiate contracts and navigate the challenges of business ownership with a steady hand.

It might be tempting to feel that you need to take on every client who knocks on your door even if you under charge just to get them over your competitor.  Chances are, it’s not worth it.

If a contract comes along that doesn’t feel right, doesn’t fit your values or seems too good to be true, really think about it.  If you say Yes and it causes you problems and takes up a lot of your time, what have you gained?  You might have also missed better opportunities that you didn’t see as you were too busy dealing with this contract. You can say No.  Just try it!

What would future you think about what you are doing now?  Future you will be grateful that you didn’t take on that awful client who would have made your life hell, gave you sleepless nights and missed opportunities with your family.  There will be other clients who will value what you do.

 

Charging more when costs go up

Things change and you need to re-evaluate the value on a regular basis in order to remain in business. We review our fees every 3 months. It means that if your transactions go down, we will adjust your fee to be less in line with that. It’s not always a case of making more money, it’s making sure that we are delivering exactly the right service that our clients need.

Don’t be afraid to put your prices up, even to your existing clients.  Everyone is aware of how much prices for goods and services have increased over the last few years.  A price increase is almost expected.  If you have a client who is still paying you the same as they were in 2019 or even earlier, then it’s time to review that.  This goes back to your business plan and knowing your destination.  Being clear on your goals and clearly communicating your values helps with this negotiation.

How much do you charge?

If you want more advice on whether your pricing fits your business, we can help.  Working with other businesses in your sector, we can help with benchmarking your prices.  Take a look at our website  and fill in a discovery form today to get clarity for tomorrow.