I want to tell you a story about the influence of deep beliefs. If it resonates with you, leave a comment; I’d love to hear your own thinking about this.
Is this familiar to you?
Frustrated by the businesses we’ve been employed by, filled with the fire and drive to do something better than what already exists, fuelled by a desire for a different kind of freedom, we go out into the world and start our own businesses. We’re creatives, fantastic technicians. We might not have the knowledge we need in business, but we’re lifelong learners, and the world is our oyster.
In the beginning, everything is frightening. Sales is scary. Networking is a big unknown; we may never have had to do it before. Defining product is easy enough, we’re technicians, we’ve got this. Pricing? Well, we go with what we feel like we deserve. Customers? Well, we know who we want. We just need to find them.
The prices are pretty low, but we want the work. Right? So we look around at what others charge, we tweak it based on our own rockstar skills (which usually allow us to reduce the hourly rate – given that an hourly rate is all we’ve known). Then we take some money off the price, because it looks way too big. Hell, we would never charge that ourselves.
Then come the first successes.
The first month flies past, and we can still pay the rent and buy our food. Awesome!
Then the first six months is gone and we’re starting to feel it.
The first year is a huge milestone, one we are tempted to celebrate, with cake and wine, and friends and flowers and parties. Some of us know that Year 1 is a relatively easy win, so we hold off the celebrations. Most businesses die in their first three years, so the first one is only one third of the way down that tricky pathway.
By the second year, you feel like you’ve got some footing. You’ve got some networks in place, some good friends, (hopefully) some mentors kicking your arse along. But towards the end of this year, you’re wondering if what you’re doing is right.
There are other, newer, entrants that have given you a taste of your first competition; at least, it’s the competition you take seriously. You start to wonder if your products are right. If there’s a better way to package it, to piece it together, to sell it, to tell the story.
This continues through your third year. It’s an epic, rollercoaster of emotions, where you feel like you’re surviving but maybe not growing as fast as you wanted (or hoped). You feel like there’s a better something just beyond the range of your ken, and you’re not sure what it is.
And then, in your fourth year, you realise that you didn’t do the pricing right to start with. And when you go to look at the ‘industry standard’ rates, that you have been underselling yourself for nearly half a decade. That there are younger, less experienced kids, earning triple what you are earning. That all this time you’ve paid attention to the value, to the flat pricing, to the certainty for others. And you’ve utterly neglected the other side: The perception that your buyers have.
If this is familiar to you, then that’s awesome. Because it pretty well describes my last four years.
Pricing: What you charge versus what your industry body says is appropriate
In fact, when I went and did a comparison against national standard pricing this long weekend (according to the major unions and industry bodies anyway), I was shattered to discover that what I pitch to people isn’t even a third of the baseline.
It’s way less.
Is it no surprise, then, that people have been shocked when they hear the pricing? That the perceived value – just on the price – is so low that it’s an easy opt-out or come-in-second?
How I started with pricing is a study in survivalism and the influence of deep beliefs
In my case, the pricing has been an interesting study in survivalism and deep beliefs. The truth is, my beliefs about pricing aren’t even mine.
They’re my dad’s.
They go like this:
Keep your prices low. Get one or two core clients. Work with them forever. Be stable. Don’t raise your hourly rate too much. Keep it below everyone else’s in the market. That way the work will be with you. Remember the core clients. Work with them forever. Be stable. Keep your hourly rate low enough that it’s still attractive or they might go elsewhere. Keep them like this forever. Don’t interrupt them. Keep your prices low. Get a few core clients. Work with them forever. Be stable. Don’t raise your hourly rate…………
Is it any wonder I’ve been struggling to grow my business? Every attempt has been tempered by this narrative, which is holding me back from taking that Next Big Leap.
It’s pretty obvious to you, I’m sure. The key difference between us is that my dad is keen to be an employee forever, with the freedom of being employed by himself, and the stability of regular pay and regular hours. In contrast, I’m keen to grow and work with diverse people, to employ others, to do fantastic and brilliant things by others (and thereby, by myself).
And I’ve been talking about it for, well, forever.
It also turns out that it’s been bugging me enough to talk about it for more than a year.
I mentioned it in passing last night to my darling husband who, in walking past, said bluntly:
‘Well, do something about it. You’ve been talking about it for long enough.’
Me, surprised: ‘Have I?’
‘Yes.’ He stopped, the cup he’d picked up off the coffee table dangling from a finger. ‘You’ve been talking about it for more than a year. Probably two years. So that means you need to just do something and stop talking about it.’
I asked him why he never said anything before.
He shrugged. ‘I don’t know. But it’s been ages.’
Time to stop talking about it, indeed. This is what happens when you don’t have a consistent or close mentor, I’ll just say in passing.
Time to find out what is most important.
It’s at this point that I feel moved to tell you, dear reader, that on Friday morning I sat down and did one of Miriam Castilla’s meditations, on core values. Then did her exercise to find one’s core values immediately afterwards.
The result surprised me.
It surprised me because all of the things that I feel like I want aren’t actually the things that are important to me. The things that I feel like I want include feel-goods like fun, comfort, support, friendship. These are all still important but they’re not the deep, meaningful things that I really want in my life.
Those things are, in descending order: Truth, trust, freedom (in a wholistic sense).
Yes, trust is more important to me than love (because without it, love it empty). Yes, freedom is more important to me than independence, because in my mind you can be independent but not free, particularly where money is concerned.
Is it any wonder that my husband is bluntly truthful about just about everything? Is it any wonder that I get frustrated with what I’ve created, when it’s not giving me the wholistic freedom I’m after? Is it any wonder that I feel like I want deep, cuddly support and comfort and never get it?
It was in this frame of mind that I realised how much at odds with me is this mantra of my dad’s. I’ve taken it on after a lifetime of hearing the same thing by one of the first and most important role models in my life. But that narrative comes from his life experience, not mine.
It was in this state that I decided I’d had enough.
So I sat down and reworked everything, from start to finish. I still had that slight hiccup of holy shit that’s a lot of money, but that feeling is coming from my own sense of worth. That sense of worth is totally at odds with what others see.
I’ll give you some examples.
On Monday I presented a workshop in Sydney, which was sold out, and was introduced as one of the best content strategists in Australia. I’ve been introduced at conferences as a thought leader in my industry. I have more than 10 years experience writing and editing professionally, mentoring writers, developing and rolling out strategic publishing activity. I’ve been noted as a master in the art of critique. I’ve done some frankly amazing things in my life.
And I still wasn’t charging rates in line with all of that? I’m surprised nobody had slapped me down for it.
In any case, let this be a lesson to you.
Here is some advice if you’re in a creative business and thinking about money.
In your first year, go and do some work with someone to surface your deep beliefs about money and value. Take this shit seriously, because it impacts your life in ways you can’t possibly imagine.
When you set your pricing, start with the industry-recommended rates. When you are thinking about business models, begin with this information and see where it takes you.
If you don’t, then you’ll be five years in, with misaligned message and pricing and brand, and wondering why things aren’t working properly.
Like me. Happily, identifying things is the first step in changing them. And from today, things are going to be wildly different around here as a result.