So you started your business, congrats! Now it’s time to talk about one of the most important but seemingly elusive parts of becoming an entrepreneur: ethical pricing for your small business.
For starters, pricing is an incredibly important part of your business. Your prices will represent your business or your brand as well as speaking for you when you have passive problems.
Pricing is powerful. It has the power to attract the right clients and deter those who are just price shopping.
I’ll be outlining some major key points to look out for when first creating your prices as well as big mistakes to avoid.
Note from Kayla: This is a guest post by Angeline Driggers of Dear Eladia. She’s generously sharing her expertise on the topic of ethical pricing with Writing From Nowhere readers. If you’re ever interested in collaborating together, sail your ideas on over.
3 Tips For Ethical Pricing As A New Entrepreneur
Ethical Pricing Tip 1: Market Research
Are you feeling overwhelmed and wondering where you even start? That’s completely normal. The first step on the road to ethical pricing is doing market research.
You want to ensure that your prices are within the range that your ideal client can pay while avoiding being the cheapest option on the market. Your prices are about the value that you create but they are also about you.
By ensuring that you are keeping the mindset that your prices are for your ideal client you will ensure you have ethical pricing.
Ethical pricing is vital for small businesses and solopreneurs because it will precede your reputation. Ethical pricing shows potential customers that your business is there to serve them, not just sell to them.
Doing the market research for your pricing is a great time to check out what your competitors are offering and in what price brackets.
The biggest ethical pricing tip is to not be the cheapest in the room while also avoiding being the most expensive.
Tip 2: Check Your Expertise
Earlier I mentioned that while your prices are for your ideal client, your prices are about you. The about you section is where your level of expertise comes into play.
Your level of expertise will set the tone for what range your prices should be in. When considering what your expertise is, try making a business resume for yourself.
Listing attributes such as:
- how many years of experience you have in your industry
- any relatable degrees or certifications
- if you’ve served any clients or customers before
- any recognition or hard-results that you’ve gotten clients
Hard attributes aren’t the only noteworthy qualities here. Soft attributes are extremely relevant here as well, such as:
- how much research you’ve done on this topic
- if you watch youtube videos or listen to podcasts about your specific industry
Note from Kayla: This is so easy to downplay, but extremely relevant to potential clients if you stay current in your industry! Particularly in the ever-changing world of online business. I always advertise to clients that I stay current on Pinterest’s algorithm via a number of mediums and it’s a real selling point. Own that part of your value, and reflect it in your ethical pricing.
This personal business resume will act as a litmus test.
If you start to suffer from imposter syndrome or want to overly discount, you can check the facts that are on your resume and understand that you are qualified to sell that service or product.
Can I get an amen? Pin that for later if you need a reminder.
Final Ethical Pricing Tip 3: Avoid The Discount Trap
Here’s a big myth for you: pricing low will attract customers.
Unless you’re in the dollar section of Target, people do not purchase for the price.
People purchase for the value that you give and the transformation you help them achieve. Your dream client will not be attracted to you because of your low price.
When you price too low, you will attract price shoppers. Not only will you not get paid what your expertise deserves, the client will likely not care as much about the transformation because they spent pennies on it.
Signing clients that care less is wading right into the dangers of underpricing. I have an entire module of underpricing that you can read for more information.
Final Thoughts On Developing Your Ethical Pricing
Overall, the biggest mistake you can make when pricing is not giving it a second thought. It doesn’t require overthinking: simply follow these tips on ethical pricing and you’re off to a strong start.
Do you still have questions about underpricing? I offer pricing strategy sessions so we can be perfectly confident in your prices and how to sell your offers. If you’re interested in setting up a strategy session you can either connect with me on Instagram or head straight to my scheduling page.
Final note from Kayla: Are there any other experienced entrepreneurs who wish they’d had these ethical pricing tips at the beginning of their journeys?! If you enjoyed this piece of ethical pricing, I think you’ll also love this other guest post on content creation tips for new entrepreneurs.