Pricing for sustainability means defining business models that will get you paid enough and let you make values-aligned choices — without feeling gross!
For most folks that I know in business, the point isn’t to extract as much profit as possible from their clients and customers — the point is to do a thing you love, with/for people who will value it, and be able to afford healthcare, housing, time off, and a life that sustains you. To get there, you have to work on what you offer and the pricing of it.
These little experiments, focused around a goal: enough, can change your business and your life. That is what happened for me.
Read below to learn about pricing strategies [and why they are hard, and how you can nail them anyway] OR skip ahead and go to a workshop to make your own pricing plan: live remote on 1/20/22, anytime you want as a digital course here.
You have to be willing to charge for your work BECAUSE you want to be sustainable in your practice.
You have to believe it’s ok to earn money and ask to be paid — and be willing to keep it complex as you consider when and if to offer discounts or sliding scale rates.
But. Pricing is hard. For starters, people say pricing is hard because:
- “I feel weird with charging people an amount I don’t feel like I could afford, so I set rates for people like me…who are also kinda broke.
- I’m healing my urge to use sliding scale, since I used it to undercharge for so long.
- I’m not sure what my colleagues charge …
- I’m scared to make too little to take care of myself — but too much to keep the few benefits I do have, that make it possible for me to survive.
- I know what my colleagues charge and it weirds me out — who will pay that, and will I enjoy working with them?”
Any of this sound familiar?
If you’re not bringing in the money you mean to, or if you’re struggling to figure out what to charge to be sustainable, I get it — and you can change.
I like to coach people to:
- identify the money you want to make
- add up what you’re currently making
- what’s the difference, in dollars? do the math
- come up with ideas on how you’ll close that gap: raise prices? new services/products? new market/clients?
- make a plan to implement ONE idea. start with the one that’ll make the most impact for you soonest
In the Pricing for Sustainability online course, you’ll work through exercises that guide you to:
- Envision and name your minimum, medium, and maximal income you hope to get from your work
- Reality test, creating a snapshot of now to understand how your current strategies relate to your income goals
- Go through a generative process to analyze the work you do — and learn your average hourly rate
- Imagine how you want to impact your business revenue and the world by ideating a few new strategies and pricing levels
- Revise your business pricing or offerings
- Make an implementation plan, including a script to talk to clients/customers about your new rates
- Finally, you’ll return to your envisioned income and check if your new plan moves the needle for you towards where you want your income to go
Plus, you’ll get stories, data about what others charge, ideas to integrate justice-focused approaches, and new ways to think about earning money for a more sustainable life.
Check out the course here, or read more stories and strategies about pricing below.
Pricing your work … it’s not easy.
I was working with a client recently on her business model, in particular: her income from the clients she sees.
She shared, “I have one client who pays me…well, I don’t feel great about what she pays me, to be honest, but I’ve worked with her forever.”
I paused – I hear this pretty regularly, but not usually so explicitly. I stayed quiet, wanting to see what she’d share next. “I just don’t think it makes sense to charge her more — so, then why charge anyone else more?”
Yup — there it is: the swap, I thought. “Hold up — I thought you said you don’t feel good about what she pays you? So why encourage others to do more of what makes you feel bad?”
“Well… I guess I don’t know if I should be charging more — I mean, no one ever says they can pay more…”
Here’s what I think is happening here: This perfectly smart and capable person SEEMS to be struggling with what she charges her clients, but what she’s actually struggling with is:
Accepting that it’s ok to charge money for her expertise
Believing that people will (or can) pay her
So, she’s accepting something that feels crappy – and she’s setting herself up for more crappy feelings by planning to charge the same to more people.
This isn’t sustainable — even if sometimes it is 100% the right thing to give sliding scale or long term client or customer discounts.
So, what do you do?
You can plan out a business model, to have a business that covers your revenue (business income) needs and goals AND lets you flex on your pricing. This is one of the key things you’ll learn in the Pricing for Sustainability course!
|A few folks who have worked with me on pricing have this to say:
“After years of contract work and cobbling together part-time gigs, I am
now able to save money for the first time in my life!”
“This allowed me to figure out a way to plot an accessible
self-employment life for myself that was 1000% more stable and less
Since I released an updated visual guide to sliding scale, it’s clear to me that sliding scale is hard to implement — **because pricing our products and services is hard**.
Running a sustainable business takes no small amount of testing and strategerizing. Lots of businesses fail to achieve “product market fit” which is a fancy way of saying we selling but no one’s buying.
In my work, I see a lot of small business owners and freelancers hit another wall: I’m selling but I have no damn money. Sometimes, crappy money habits are in your way. But often, your pricing is not sustainable and it’s leaving you tired, overworked, and still f-ing broke.
This is NOT why anyone starts a business!
- Two ways to price your services or products
- How to reverse-engineer your pricing to account for your desired income (after taxes!)
- Create equitable pricing plans for your clients/customers AND for you
ONE // snapshot the money you ARE making.
Here’s an example, look back at how much you’ve earned the last few months, and then divide it to get a monthly average:
First question: is that enough?
Second: are you putting money aside for taxes? (please do this)
Third: What is the FIRST thing that would need to change here for you to feel better about your earning?
Once you have a sense of the money coming in, you can move onwards to figuring out how to do more making money in ways that feel good and honor your values!
TWO // Decide how you want to charge: value, impact, costs?
I want to be paid according to value.
Me too. Here’s the catch: because money is relational and based on everyone’s wildly varying experiences and perceptions, what you or any given set of individuals will value your work at, or get out of your work, is going to diverge a LOT.
- Possible value — I personally have helped people save thousands of dollars and start earning money in high-interest savings accounts (right now I’m into NCB and Alliant), but I don’t charge thousands. I charge a fraction of the possible value – how might you express the possible value your clients will get and make your work seem like a steal?
- Market value — if everyone in your field is charging $150/hour and you charge $65, unless you clearly state WHY or for who you’re charging this lower rate, your value might be percieved to be lower. How might you price equitably AND for clients able and happy to pay at higher rates?
I want to charge for impact
Charging for value makes sense with services but really starts to break down with products; what’s the value I get from a slow fashion shirt, for example? The value is in the impact generated in the creation, so price for that. For example:
- You might want to buy ritual candles but value that they support BDS and don’t contribute to harm, so you’d be happy to go with more expensive US-produced ones.
- You might want to buy coffee in vast quantities, like me, and value that farmers can eat so you buy fair trade even though it costs more.
I want to charge to cover my life/costs
While this has no relationship to the people paying (which is a little weird), it DOES have a lot of relationship to YOU, which is great.
If you can take a good, clear look at your life and create an aspirational spending plan, you can get a decent sense of how much money you need or want to cover you (may I remind you, after you’ve set aside for taxes) — that, my friends, can have a business model built around it.
If you want to aim to have an after-taxes and costs income of $4,000/month, then walk backwards to
- Make an income plan > Understand how much revenue you need to bring into your business to pay for expenses and taxes ($5,000? $6,000? more?) and maybe even put a little into retirement
- Make a business model > Determine what you will do and/or sell to get that revenue. Walk dogs and run errands? Coach people? Consult? Exactly what will you do, for what kind of money, and using what of your sweet time?
I walk you through both of these step-by-step in the Pricing for Sustainability course, along with a way to take this information, learn from it, and integrate a sliding scale plan that will work for you 🙂
AND ALSO IS THIS YOU?? // I’m nervous to charge for my services / products:
You need to ask yourself: How much of this is imposter syndrome and how much of it is reality?
There’s a delicate balance – but major difference – between charging less while you’re learning / genuinely still starting out, and charging less because you don’t believe you deserve to be paid or are afraid to recieve money. If you have something to offer, it’s ok to recieve for it.
If you literally don’t know what others in your field charge — go do some research on 2 similar offerings. If you literally can’t imagine what to charge, write out the name of a service or product you offer, and three price points: low, medium/market, and high. If you literally can’t bring yourself to advertise your work, hire or worktrade with a friend to do it for you. IT’S OK TO BRING IN THE MONEY.
- Social Impact startup guide, where you’ll learn about how to strategically plan all the aspects of a business, including budgeting and asking crucial questions like: “Where will the money / time come from?” and “Should I keep my dayjob and side hustle this until I can earn a certain amount of money with it?” and the ever-popular, “How much do I need to earn to quit my dayjob?”
- Four Ways to Keep Your Hustle(s) from Leading to Burnout, including a tool to answer this key question: What is my actual hourly rate – and am I ok with it? And “Do my financial systems help me make decisions more easily?”
- Is my business making money — download a free spreadsheet template to help you track expenses and income (or just use a software like Wave, Xero, or Quickbooks!)
- Get hip to a few ways to set hourly rates as a freelancer (updated for 2019!)
- Read all about starting and running your small business here!