There are conflicting theories of why prehistoric people painted pictures of animals inside their caves. Some archeologists claim it’s just art for art sake. Other researchers say it was part of an elaborate ritual. My personal guess is that Caveman Joe was more than just moderately concerned where his next meal was coming from. From his earliest memories, hunting was the number one priority for survival. Every decision in his entire life was based around it. Therefore, the thought of deer, elk and bears was probably occupying the majority half of his Neanderthal brain which resulted in his animal drawings.
True, my two archeology classes in college do not make me an expert on early human behavior, but if modern humans were to do the same thing as our predecessors, we would cover our interior drywall with paintings of Franklin, Grant and Jackson. Yes—just like Caveman Joe, we would depict the one thing that has the majority sharehold of our minds—money.
Those innocent little pieces of green paper decorated with dead presidents and weird glowing Cyclops pyramids have such a power over us. Whether you like it or not, money dictates your entire life. Every decision you make on a daily basis is based on how much you have or how much you don’t have. Can I afford this meal? Can I take a vacation? Can I buy a new car? Can I pay off my credit card debt? Can I quit my day job and work for myself?
I’m going to make a guess about your relationship to money right now. I’m guessing that you have absolutely no problem taking money from your current employer. You’re not feeling one ounce of guilt when you gleefully deposit your bi-weekly check into your bank account. You don’t waste mental energy wondering about your value as an employee or your deservingness of this cash. That would be ridiculous, right?
Instead, you know that because you showed up and you did the work, that now you deserve the money. You get that warm, fuzzy, time to go shopping! feeling. Plus, you know you need this money for survival (i.e. bills, food, Starbucks, etc.), plain and simple. Agreed? Agreed. Alright—I’m glad we’re on the same page about all that.
Yet, with all that said, charging money in your own business can be a major struggle for many business owners. For some reason, receiving money from an employer ignites mental images of big screen TVs, fancy vacations, or new Victoria Secret underwear (okay—that last one might just be me). But charging money (even though it’s the exact same green stuff) brings up decades of suppressed fears, insecurities and crippling doubts.
For instance, in the start up phase of your business, you don’t know what to charge. Then when you finally pick a price, you worry that your customers won’t be able to afford it. Then after one or two rejections, you second-guess the inherent value of your product or service altogether. Then, worst of all, you even start second-guessing the value of yourself.
One minute, you’re getting that delightful feeling about cashing a check from your employer and the next, you’re feeling utterly insecure about charging a client that you poured your heart and soul into working with. (I’m guessing Caveman Joe didn’t have insecurities about where his meat came from, you know?)
Let’s just clear something up right now—you have a right to make money.
Actually, let’s go further than that—you have a right to make money and do what you love to do.
This is not an “either/or” world we live in. You can have your cake AND eat it too. You don’t have to choose between making money at a job you hate and running a business you love making a miniscule income. You deserve to have both. And you can have both, BUT it means that you have to charge good money for your product or service.
You’re not running a fucking charity here. If you want to quit your day job and become a full-time business owner, you have to start feeling comfortable when talking about money, charging money and asking for money. You have to get 100% behind your company’s prices. You have to fully recognize the value of what you’re offering. And, last but not least, you have to know your own value as an entrepreneur.
Here are three reasons why you need to charge money and feel comfortable doing it…
#1: Charging money shows value
You’ve probably heard the story of the man who dragged his old couch to the edge of his front yard facing the street and put a sign on it that said “Free Couch”. The couch was in pretty good shape, and the man thought someone would come by with a truck in a day or two and haul it away. No such luck. For days the couch sat there while no one claimed it.
The man decided to do an experiment. He took down the “Free Couch” sign and replaced it with a message written in big black letters, “Couch: $50”. The couch was gone in a few hours.
Moral of the story: Charging money shows that your product or service has value. If you want to prove that your business offerings are truly worth something, you have to charge good money for them.
People might say they want things for free or cheap, but that’s not true. How many women would be obsessed with Coach Handbags if they were free? Or even if they were in the low-end $45 TJ Maxx price range? Not many. Women like Coach Handbags because they have value, they cost money, and therefore, they enhance your personal status. Same with men buying Rolex watches, Armani suits, or even just purchasing a Lexus over a Toyota.
Your product or service doesn’t have to have a high-end price to show that it has value, but it does have to have a fair or competitive price in the marketplace. If you want your customers to see your value and purchase from you, don’t even think about low-balling your prices or offering discounts every time. Remember—people don’t search for low prices, they seek out value.
#2: Charging money prevents burn-out
Last week, I was interviewing Matt Theriault (a.k.a. The Do Over Guy) and he was sharing his story about getting into real estate investing, growing a 7-figure business, and completely exiting the rat race.
With all this passive income flowing to him, I couldn’t figure out why he offered one-on-one coaching as part of his business. I could tell that he didn’t need any more money and being on the phone would definitely eat away at his free time. What’s the deal? I wondered.
After we finished recording the show, I said to him, “You must charge a lot of money for your coaching to make it worth your while when you’re income is already exceeding 7-figures.”
He responded, “You’re the first person to get that.” He said he charges in the 5-figure range for coaching because that’s (1) what his time is worth, (2) the amount that gets him invested in working with a client, and (3) what gets him excited!
If he didn’t charge that much, it’s likely he’d get burnt out and lose interest relatively quickly.
If you’re charging too little for what you sell, you’re going to find it difficult to get out of bed in the morning. You have to design your prices to be in the ballpark of HELL YES!
Hell yes I want to work with this client!
Hell yes I want to work on this project!
Hell yes I want to spend my nights and weekends working!
You won’t be in business long if you get burnt out. Charge whatever amount gets you invested in the client or project and don’t settle for less.
#3: Charging money helps your fellowman
You’re doing an outright disservice to your fellowman if you don’t charge enough for your products or services.
Like I mentioned earlier, if your prices are too low, your customers won’t see the inherent value in your business. And if they don’t see the value, they either (1) won’t purchase from you at all, or (2) they’ll become one of those worst-nightmare customers who you’ll want to dropkick their ass to Tinbuktu.
In my interview with Matt, I also asked him what happened when he charged a coaching client less than his set 5-figure amount. He said frankly, “I’ve done that a few times with people who couldn’t afford my services but I still really wanted to help them.” He paused. “Honestly, the people who received discounts from me never got the same positive results as my clients who paid full-price.”
Bam. There it is. Charging money gets results. And results sustain your business.
And I have to say, I whole-heartedly agree with Matt. Having been a coach myself for over three years now, the clients I gave discounts to never got the same results as other clients. NEVER.
If you want to help people—I mean truly help them—you have to charge good money for your services. Customers will have a better experience with your business if they pay full-price and reap the benefits than if they pay half-price and get nothing in return. Give your customers the opportunity to invest in themselves and your business will thrive.
The bottom line is that Caveman Joe needed deer jerky to survive…you need money.
To become a full-time business owner, you have to become good at charging money. That’s the ONLY way you’re going to be able to quit your day job. Period. There’s no other route you can take to personal and professional freedom. So embrace it, enjoy it, and for God’s sake, realize that you are worth it.
Photo credit: Photo by Moyan Brenn https://www.flickr.com/photos/aigle_dore/ License: https://creativecommons.org/licenses/by/2.0/