Easy reading is damn hard writing. But if it’s right, it’s easy. It’s the other way round, too. If it’s slovenly written, then it’s hard to read. It doesn’t give the reader what the careful writer can give the reader. – Maya Angelou
When you’re getting started on a new business opportunity, perhaps setting up for the first time, it’s tempting to think about what you’re going to charge, how you’re going to make money.
Here’s the first thing you need to realise.
How much money you can charge isn’t based on what you think – it depends on what the market does.
And what the market does is create demand for what you do – so let’s start with that.
The word “demand” in a business context means that there are consumers out there who are willing to buy what you are offering and have the ability to pay for it.
The price of your product is one element, but there are other important ones too.
Tastes and preferences matter, budget matters, the prices of alternative products or services matter, expectations of what will happen in the future to prices matter.
You also have to think about how many consumers are out there and how many units of product they want.
For example, let’s say you want to start a social media services company.
The demand for your service will depend on how many consumers are out there that need help with their social media and have a budget for outside support.
There are a number of companies that offer this kind of service, so their tastes and preferences will influence their choice – do they like your work, do they like you personally, do they prefer a local service, is there something unique you do that appeals to them?
Can you supply what they need. For example, if you are a one-person company and they need at least three people working on their account you’ve got an issue.
There are other factors specific to the situation that can also affect demand.
For example, if the weather is hot you’ll sell more ice cream – but you can’t control the weather, you can only respond to it.
Make it easy to service demand
Look at every aspect of your business and see how easy it is for someone to do business with you.
People don’t like taking risks, they’re wary about taking leaps of faith, they’re concerned that they’re being scammed.
So an essential part of your business development strategy is to find ways to put your prospects at ease – show them that you can do what you say you can do.
That means having proof – a portfolio, existing customers, references and examples of completed work.
One of the first challenges someone starting up has is to get over the idea that as the person doing the work they have to be seen as an expert, as someone with trade secrets.
That kind of thinking is around fifty years old.
These days you have to show people everything – be as open as possible with what you do and how you do it.
The more you show about yourself and your process and your approach the more information they have to work with.
And some people won’t like what they see and will walk away and that’s ok – you wouldn’t have worked with them anyway.
But at least you made it easy for them to decide.
Often you have to provide some free consultancy to show that you can do something.
For example, a client may book a free session with you to see what you can do.
If they ask for another one then you might offer that for free if it looks like that’s going to lead to a sale.
If they ask for a third free one, you need to be wary – they’re starting to look like the kind of person that will take what they can and then walk away.
So, tell them there’s going to be a charge, let them walk away if they choose to, and to make it easy for yourself the next time, start by telling people that you do two free sessions and then the next ones are chargeable.
Simple things, like building a portfolio, a library of resources that you can point people to, and doing low risk, low cost sessions that are as much about qualifying if a customer is serious as about doing the work are all part of your strategy to surface demand where it exists.
The only people that matter to you are they people willing to buy what you do – and everything you do should make it as easy as possible for those people to find and trust you.
Go where they are, advertise where they hang out, create offers that will draw them in, show your work and provide as much proof as you can and the demand will inevitably come in – if it exists.
You need to be clear-eyed about this – if there is no demand out there you don’t have a business.
But if it does, make it easy for them to compare you with others, see the value you bring.
Put guarantees in place, money-back offers, no-risk trials.
Create the capability to let your prospects experience what you do at no risk and no up-front cost.
The strategies you use will depend on your field – but content is a big part of that now.
Write, publish, create videos, document what you’re doing and put it online.
They days of experts who hide their knowledge are done.
It’s a little like how the book business is changing.
Once upon a time if you wanted to read a book you had to buy it.
Nowadays, more and more authors put the whole book out there for free in formats that cost them nothing.
And if someone wants to read it in a traditional format, buy a book or support the author in a different way then they can – if they want to.
And that’s the goal you should have for your own business model – create a business where people work with you because they want to – not because you have to push them.
Now, this is not easy for you to do.
The easy thing to do is print out a flyer listing what you do and the prices you charge.
Creating something that makes it easy for your prospect to buy from you is hard, challenging work as you create content and offers.
But that’s the work that will set you apart and help they decide they want to work with you, if they can afford to.
How to set your prices
Once you know there is demand out there you can meet it – at a price.
And pricing is actually quite simple – you start at zero and you keep raising it when you find there is more demand than you can supply with the resources you have.
For example, if you currently have no customers and no portfolio – the only logical thing to do is work for free.
That may seem a difficult thing to do if you have no money and need income to live.
If you’re in that situation then you don’t need to start a business – you need a job and need to work on the business on the side.
Even if you have no customers.
For example, if you want to start a consultancy business, start writing about your industry, doing small projects for friends or volunteering your time.
Do what needs to be done to build your skills and experience at practising and delivering your service.
Each time you do a project you’ll be adding to your portfolio – making something you can show later as proof of your capability.
Once you’ve done a few of these then people will ask you what you charge – and you charge what the market will bear.
If you have ten slots a month, for example, and you find they’re being filled quickly then raise your prices.
Double them for the next project and see what happens – you can always discount them back to the old price if you find that the buyer starts to squirm.
But if you really understand what they want and what their budget is, you can price the work to fit their budget.
But to do that you need to understand what they want and what their constraints are.
But before we do that let’s look at a few strategies to supercharge how you show your work over the next few posts.