When it comes to your business it's so important for you to make decisions that help you build a profitable business so that you can stay in business and not break yourself hustling.
So today I wanted to talk about a word that I hear a lot that I think can keep you broke as a business owner and under-earning.
And that word is Affordable.
Now you know I like to look at the definition of words.
If something is affordable, it means its price is low enough that you (or most people) have enough money to buy it.
I want to break this into 3 key mistakes you're making when it comes to thinking about ‘being affordable'. Let's look at this in an objective way.
Mistake 1 – You're pricing for them and not for you
When you're pricing your products and services there has to be an equation.
That simple equation is – how much do I want to earn?
Once you know what you want to earn then you have to ask yourself, how many do I need to sell in order to earn that amount?
Then with my tax, superannuation, operational costs, pay etc – what does the price need to be.
That's where you start.
Once you get there, then you need to look at the market.
When I say look at the market, I mean you have to decide where you want to position your brand. If you're Kmart you're not going to charge $5000 and if you're Chanel you're not going to charge $5.
So you have to go through these questions and get practical and clear on what you're building, how much you NEED to charge and then what you need to do for the price to not be an issue for the people you're targeting.
If you need to charge $3000 then you need to target your message, branding, and marketing to people who see it as an investment and who are fine with that. Obviously being strategic with payment etc can make it more accessible.
And that's how I want you to think – not how can I make it affordable but how can I make it accessible. I charge what I need to be profitable and they can access it in different ways that work with their budgets and needs.
Mistake 2 – Thinking you know what affordable means
Affordable for who? For every one you've ever met or for everyone in the world?
When you're talking about affordable you're making an assumption about what people can afford. You're also making an assumption about how much they value something.
Affordable is relative to desire, want and need.
If I want to go overseas on holiday and I haven't been on holiday for a long time then $5000 or $10000 could be affordable for a family of 4, in fact it might be cheap when you take everything into account – like flights, accom, food,
Whereas that may not be affordable for someone else.
So how do you decide?
Knowing the audience you want to work is a great place to start. But the other thing that I learned from my business coach years ago is to stay out of your client's wallets.
Why? Because if someone really wants to work with you they will do what they need to in order to make that happen.
Mistake 3 – Thinking that what you would buy is what your clients will buy.
You don't have the same problem as your client, so your thinking, “I wouldn't buy that or pay X for this” makes no sense. If you don't have the problem that you solve now of course you won't pay money for it.
But you would pay to fix the problem that you have.
This is a Money mindset that you need to break and understand.
There are people who see things as an investment and others who see them as an expense.
You have to focus on speaking to people who want to invest in themselves and understand the value of that.
If you think you to convince people to pay what you're charging you'll exhaust yourself and to be honest that's just not much fun. This is also where people burnout. They keep trying to make enough money because they want to be affordable (instead of accessible)
Unknown Speaker 0:00
Hey, hey, gorgeous. How are you? Welcome back to another week, it is awesome to have you here. As always, I hope that you are doing well. This is coming out at the end of November 2022. And we are almost at the end of the year, which I think is just crazy. I feel like we say that every.
Unknown Speaker 0:43
But these yeah is the same like I believe, but it's we've gotten through it. We've gotten through it out our first year back in freedom mode, which is amazing. So it has been so good to connect with so many new people this year, if you're new to the podcast this year than welcome. If you're an old listener, then I so value you. And I just want you to know that as well. I get so many messages from you, my listeners just saying what episodes really resonated for you why you value it so much when you're binging it on one car drives, and all the rest of it. And like I say to a lot of my clients, the podcast is such an incredible space for me to develop my thought leadership to clarify my message, to share what I think what I believe what my experiences are what I've learned along the way with you. And I'm so grateful that you're here. I'm so grateful that you come and you hang out and you let me know what has really helped you as well. And so it's so exciting to have you here. And I always get excited when I get new clients that are joining BBA or amplify, they're like I found you on the podcast that I listened to you every week. And, and so it's just been such an amazing space for me to connect with new clients. And you know, even if you don't become a paying client, I hope that you get so much out of this and that it really helps you to build a profitable business without the burnout, and become a bold and powerful voice in your industry as well. And so I just wanted to say thanks. I just wanted to say thanks for being here. I really, really value you. Now, it's really interesting, I actually wrote an email to my subscribers. If you're not on my email list, if you're not part of my email community, then make sure you come over and go to CS chadwick.com forward slash subscribe, and you'll be able to sign up but I sent out an email, and it was talking about this one thing that keeps you under earning and when I wrote it. I was like I think that'd be really good podcast episodes. So that's what we're talking about. Today, we're talking about the one thing that might be keeping you under earning and the three mistakes that you're making when it comes to this. Are you intrigued? Are you intrigued? Or listen, I won't keep you waiting any longer. Let's dive in to this week's episode.
Unknown Speaker 3:09
All righty, let's dive in. Well listen, when it comes to your business, it's so important that you make decisions that help you build like I say all the time, a profitable business so that you can stay in business and not break yourself hustling.
Unknown Speaker 3:24
Don't you agree? So today, I really wanted to talk about a word that I hear a lot that I think it can keep you broke as a business owner and under earning. And that word, my friend is affordable. Now you know that I like to take a look at definitions or word meanings as well. It's very important when you're using words to know what they mean. And so affordable. If something is affordable, it means it's priced is low enough for you or most people have enough money to buy it.
Unknown Speaker 3:56
I've just gonna say that, again, it's priced low enough that you all most people have enough money to buy it, how Vegas
Unknown Speaker 4:07
but the reason that I want to share this with you is because I think there are three mistakes that we make when it comes to talking about affordable and so I wanted to break it down into those three mistakes and what being affordable means the mindset around affordable the problem with affordable and for us to look at this in an objective way, you know, something I am always going to come to you with let's look at this. You know, I don't think it's a great way to go but this is why I don't think it's a great way to go. Here's all my reasoning around it. This is like why I think you should really look at this and reframe, reset, reach, you know, refresh your language around it. So I'm gonna give you a different way of looking at this today as well. If this is something that you have said before or that you think quietly in the dark
Unknown Speaker 5:00
Have your office.
Unknown Speaker 5:03
So listen, mistake number one is that your pricing for them and not for you, when you think about it being affordable, and I've got clients that have said to me will cease, I'm just gonna, I'm gonna price it here because I think it's affordable. And my question is always like, affordable for who. So when you're pricing your products and services, there has to be an equation. If you're a BBA or amplify client of mine, you know, I bang on about this all the time, you know, they're that a simple equation of how much do I want to earn? So once you know what you want to earn, then you have to ask yourself, how many do I need to sell in order to earn that amount? Yeah, and you've got to take a look at your tax and your superannuation, and your operating costs and how much you want to pay yourself? And what does that price need to be?
Unknown Speaker 5:53
And that's where you start. So before you go into our let me pull a number out of the hour, and then think do I think it's affordable, we have to actually do the equation. I talked about this in VBA all the time, you got to do the equation, because you've got to take a look at what you want to earn. And then you've got to make sure that what about if I'm paying tax on it? What about if I'm paying superannuation? Or what if I need to take my operating costs out of it? Yeah. And then I want to pay myself, what does all of that equate to? And you've got to start at that place. And so once you get there, then you need to look at the market. So when I say look at the market, I mean, you have to decide where you want to position your brand. If you're Kmart, you're not going to charge $5,000. And if you're Chanel, you're not going to charge $5. So where do you want to position yourself in the market. So you have to go through these questions and get practical and clear on what you're building, how much you need to charge, and then what you need to do for the price to not be an issue for the people that you're targeting. So if you need to charge to $3,000, then you need to target your message, your branding and your marketing to people who see it as an investment and who are fine with that. Obviously, being strategic with payments can make it more accessible. So I'm about to drop some gold here, I really want you to catch it. Yeah. Are you ready? And that's how I want you to think about it. Not how can you make it affordable? But how can you make it accessible? I'm gonna say it again, not how can you make it affordable, I want you to charge what you need to charge in order to pay yourself pay tax pay super, yet run your business, you've got to decide what that price is going to be. And then I don't want you to make it affordable. I want you to make it accessible. So I charge what I need to be profitable. And they can access it in different ways that work for them and their budget through payment plans. Yeah, so you've just got to think about this in a different way. If you're worried about which I we're going to talk about this in the next mistake. But if you are worried about it being affordable, take affordable out and say how can I make it more accessible? Like if I think people are gonna, like this might be a stretch for them? Then how can I make it more accessible, let me do a 12 month payment plan, let me do a three month six month payment plan. There is also the option and we're looking at these in the coming year where there are finance companies where you can actually have a two year payment plan I get paid up front. But you can have a two year payment plan with I think it's like little to no interest. And basically, that means you can access higher paid or higher costing products and services without it kind of making a big dent. Yeah. So you've got to take a look at what are my options here to ensure that I am profitable to ensure that I am covering all of my costs and how I want to pay myself. But I'm making it accessible to people. And so we want to price for us and not them. We want to bring all the value to them. But we need to run our business in a profitable strategic savvy way. Yeah. The second mistake is thinking that you know what affordable means. And so I said this little earlier affordable for who, for everybody you've ever met or for everybody in the world is that who you're making it affordable for? So when you're talking about affordable, you're making an assumption about what people can afford. You're also making assumption about how much they value something which you can't do. You can't read somebody's mind. You don't know what they value, what their priorities are what they need right now. And affordable is relative to desire, want and need.
Unknown Speaker 9:59
So if I
Unknown Speaker 10:00
I want to go overseas on a holiday and I haven't been on a holiday for a long time, then I might be fine spending 510 15 $20,000 For a family of four. In fact, that might be cheap when I take into account flights, accommodation, food, how long were away for Yeah. But that might be a priority for me if I've not done it for a long time. Whereas that may not be affordable. I'm doing it in inverted commas. And you can't see me for somebody else. So how do you decide what's affordable, and what's not? Knowing the audience you want to work with is a great place to start. But the other thing that I learned from my business coach years ago, and I've told you it before, if you listen to the podcast is stay out of your clients wallets. It is none of your business, what people can afford and what they can't afford. And when you start making assumptions about what your audience can afford, not only will you offend some people, because you'll be like, I just want to make it affordable for you. They'll be like, Why do you need to make it affordable for me, I can afford things I can spend money on things that I want. I make money. Yeah. And another really interesting one is I remember speaking to a client, and she worked with moms Yeah. And she made the assumption that because somebody was a stay at home, mom, they didn't have any money. Yet, a lot of these people had money, they had a great lifestyle, they had disposable income, they had money, either from when they were working, and they're on mat leave, and they've got money or their partners or through whatever other means, you don't know how much money is sitting in somebody's bank account, you might look at them. And they may not have a flashy house or flashy car, flashy stuff, but they might have a million bucks sitting in the bank, you don't know that. And so a lot of times we make these judgments on other people. And so thinking that you know what affordable means to somebody else, is actually a bit insulting. I'm just gonna say it, unless you are working in like nonprofit, or you're working with people where you know, their socio economic situation, you are just making a guess. And a lot of times, you might be guessing wrong, and you guessing wrong is keeping you broke, they've got the money, they're happy to invest in themselves, they're happy to buy the thing. But you're under charging, because you're worried. And because you're projecting what you think they can afford. Can you feel like how kind of not cool that is? Like, that's not cool. Imagine if you have money to spend, it's like a pretty woman, you know, when she walks into the shop, and she's got money to spend, and they're like, Yeah, nothing in here, we don't think anything in here will fit you or nothing in here is going to be priced for you. And she's got like, I don't know, $10,000 in our pocket, that's what you're doing, you are looking at somebody and you are making a judgment, you are assuming that they cannot afford what you have, which is insulting. And so you've just got to stay in your own lane, stay out of your clients wallets, and make sure that your money mindset is not keeping you broke, because you think that they can't afford it.
Unknown Speaker 13:21
I really want that to sink in. And I really want you to catch yourself, if you have thoughts around affordability, I don't want to charge too much. And it might be a cover. You know, it might be a cover for something else where you're like, I don't want to charge too much, because I want to make it affordable. Maybe you don't want to charge too much, because you've got money mindset issues. And this is around mistake number three, is that thinking that what you would buy is what your clients will buy. So you don't have the same problem as your clients. So you thinking, Well, I wouldn't pay that, or I wouldn't buy this makes no sense. If you don't have the problem that you solve. Now, of course, you wouldn't pay money for it. And so you have to understand the value that you're creating for your clients at the level that they're at solving the problem that they have. And I get this from people a lot. Well, I wouldn't pay that. I'm like you are not your ideal client. You are beyond your ideal client. You've already solved the problem. You already have the knowledge, you've already done this. So you asking yourself or saying well, I not sure I would pay it. Of course you wouldn't. And so you've really got to take a look at your thoughts around it. Yeah, but you would pay to fix the problem that you have now. And so this is a money mindset that you need to break and understand there are people who see things as an investment, and others who see it as an expense. So you have to focus on speaking to the people who want to invest in themselves and understand the value of that and understand the value of you what you do how you help. And if you think
Unknown Speaker 15:00
that you need to be convincing people to pay what you're charging, can I just let you in on a little secret you are going to exhaust yourself, you are going to burn yourself out. Because what you're trying to do is that you're trying to convince somebody who doesn't want to solve the problem, or who doesn't see it as an investment, that this is something that they should buy. And I really want you just to make the decision, I'm just talking to people who want to make the investment and who want to solve this problem. And this is what I need to charge in order for me to run my business. This is also what I need to charge because I see the value of what it is that I'm putting out into the world. And so that's what it's going to be and really stand firm and stand with confidence in your pricing, knowing that the value that you bring is amazing.
Unknown Speaker 15:53
And so you don't want to be trying to convince people because it will just burn you out. And so you want to make sure that you are reframing your mindset right now, when it comes to this particular word. We're not looking for affordable, we're looking for accessible, and your pricing for yourself and the profitability and the longevity of your business. And you are also understanding that your clients who want what you have, will pay for it. When you are speaking to the right clients. If you find that you are constantly coming up against price objections, then I say it all the time, you are not positioning your brand in the right way. You're either you do it doesn't look premium, it doesn't sound premium, it's not speaking to clients where they are. And so clients are coming and saying, Well, I don't think I'd pay it for that. And so you've got to rejigger you've got to rejigger your message, you've got to reposition your brand. So that it does reflect exactly what you are bringing to market and how you are supporting your clients to get the outcome that they want. But I just really want you to make sure that you are doing the equation at the beginning. And then you are pricing for profitability, and longevity, that is the most important thing. And then you work out everything else from that. So you don't like build a business price really low and then work out how to sell that you price profitable and for longevity. And then you make everything else fit that so that you are attracting the right clients who love what you do who want what you have, who want to invest in themselves. And if they can't pay in full, then you make it accessible for them so that they can pay for it. Because they want it and so you don't want to be somebody who's undervaluing yourself and not giving them the solution that they're looking for to their problem.
Unknown Speaker 17:51
And so those are the three mistakes that you might be making that is keeping you under earning as well. So let me know if this resonates. Let me know if this is something that you feel. You know you've you've said before you've thought before, I would love to know. And also let me know if you've got any questions as well. Well, that's it for another week. It has been amazing to have you here as always, and remember to follow me on all socials at Sue's Chadwick. But thanks so much for listening. If you enjoy this episode, then I would love you to leave a review so that others can find the podcast and come and hang out with us every week. Until next time, have an awesome week and make sure you keep playing big and branding bold.
Transcribed by https://otter.ai