Hello, Reader,
Today, let's talk about something I cannot stress enough: determining if you're pricing yourself out of the market for customers or clients.
If you're just starting out on your business journey, one of your first goals should be to secure paid clients and customers.
That's right. PAID CLIENTS AND CUSTOMERS.
However, I don't want you to get sidetracked and only think about getting paid because let me tell you, it can be easy to focus only on price.
But it matters how you price yourself initially. Why? Because if you're just starting out, you need momentum! Specifically if you received initial capital from investors or lending banks. How will you begin to pay them back?
And this matter is urgent when the barriers to entry in your industry are low.
This means that anyone can start a business in X, Y, and Z industry if the initial investment is low; the skills required for the business are easy to learn, or platforms like Kajabi and Udemy make it easy to create and sell digital products. These are just a few examples.
Furthermore, with the rise in tech and now new innovations like A.I. it is becoming easier and easier to create an online business in less than 2 hours.
Why Pricing Matters
Think of your first few paid clients as the oars to your business boat. You built your business and now you're ready to move! But your boat can't go anywhere without these oars. Your first and second paid clients give you the information you need to go in the direction you want to go.
Essentially, these initial clients will help you create momentum and bring you closer to the breakeven milestone that most businesses take years to get to. According to Amod Dandge, CEO of HomeStop Inc., most businesses don't see a profit until their 3rd of 4th year of business. YEP. You read that right.
That's a long time if you ask me. But with each paying client, you are that much closer to your breakeven point depending on your level of initial investment, your particular industry, the economy and other factors.
The great thing is: You can always adjust your prices over time as you gain more customers and testimonials.
If your offering is too similar to what's already out there, attracting new clients will be tough, especially if you're priced similarly to your competitors, and you've only been in the market for a short period of time.
Think about focusing on getting those first few clients by providing them substantial value and consider pricing yourself lower initially to capture a share of the market.
This strategy allows you to get your foot in the door, gain some traction, and start generating cash flow.
You can then reinvest that cash flow into high-level strategies such as improving customer experience, hiring a team or scaling your marketing.
While you may feel tempted to match your pricing with established competitors, remember, most businesses already have established resources in place and perhaps a reasonable share of the market. But even with these advantages, some businesses take years to see profit, so it's crucial to have a long-term plan.
A reminder that success is rarely immediate—it might take months or even years to break even. The important thing is to validate your ideas, your products, and your services.
With each paying client, you'll receive feedback that will only help you refine and improve your offerings moving forward.
So, focus on providing value, learning from feedback, and continually improving your products and services rather than stressing over a low price.
You'll find that gaining traction, and growing your business with paying customers will give you the boost and motivation you need to persevere.
Starting a business is becoming ubiquitous these days. Grab your share of the market early and keep refining your offerings, and always prioritize the needs and wants of your customers.
I got you, Reader. Book a call with me to get your business on the right track.