You're Worth a Million
Welcome back to the podcast! We are in the of a transition of a re-brand. Dream Weaver was perfect for Upspeak 1.0 but isn’t quite clear enough for Upspeak 2.0. Now, we bring you Six Figs, a podcast that strives to help women earn six figures on their own.
This episode is based off of some slides that I put up on my IG stories about how to decide how much to charge for your services. It got tons of attention. People were asking me all sorts of questions so I decided that we needed to have this conversation on the podcast. Moving forward, as you may have noticed from the rebrand, the content of this podcast is going to be based on women making six figures on our own terms. I want to de-stigmatize the conversation around money. We are all capable of changing our money stories and making six figures so let’s do it honeys!
This week we are talking all about pricing. How do I price my services? This is a question I get all of the time from clients and followers on Instagram. Often, we are starting in the wrong place. A lot of new business owners are asking, “What are others charging for this service?” Or they make assumptions. “Can people actually afford this?” These are not the questions that you want to ask yourself when pricing your services. There is sooooo much that goes into the equation.
At the end of the day, we are all in our small businesses to make a living right? But for some reason, we are still so afraid to talk openly about money. And we also don’t think about money in an intentional way when pricing our services. So what is the first thing we need to do when deciding how much are services cost?
First, you are going to decide what number equals business success to you this month.
What is the magic number that will cover my expenses, deliver me what I need, this month in my small business?
P.S. ...there is no right answer for this. Your personal financial success metrics are personal. You might have a partner that helps support your lifestyle, you might have student loans that need to be paid off, maybe you have already paid your student loans. The point is, everyone is in a different situation. So it is soooo important to do the work for yourself, and not base this off of others around you.
Maybe that number is $5,000 a month. But remember, if you want to pay yourself $5,000 a month, you’re going to have to bring in more than that.
A lot of women don’t end up paying themselves in their early business days. This is not something I recommend doing.
When I’m talking about your magic yearly and monthly number, I’m talking about the overall gross amount of money you’re bringing in. We aren’t talking about how much you’re paying yourself. This is before all expenses are taken out.
Once you have decided on your magic yearly and monthly number, start to think about what expenses you may have in your business. These expenses include things like:
Subscription services like Squarespace, Canva, Honeybooks, etc.
Let’s say that number is about $1,600. If your magic yearly number is $50,000, divide that by twelve. That is $4,166. This is your monthly happy number.
Now subtract the cost of expenses from that monthly number. You’re left with $2,566
Remember, if you’re wanting to replace your day job income, that’s not replacing it. You need to be paying yourself $4,166.
With that being said, you need to add the cost of your expenses, to what your business needs to deliver you.
Take the cost of expenses for one month and multiply it by twelve. Add that number to your happy yearly number.
Now, each year you need to gross $69,200 to cover the cost of expenses and to pay yourself.
Keep in mind that this number doesn’t include savings or taxes. When you do this work, determine what that number is, multiply it by 12, then add it to your yearly number.
Let’s continue with the $69,200 number. If you divide that by twelve you get $5,766. This what your business needs to deliver to you each month.
Now, look at your services or products. What can I sell in my business? How many of each product or service, will get me to my monthly happy number?
Do the work so that you know what you need to bring in every month and how you are going to do it. This will inform your marketing and sales in a way that nothing else will.
After you do this work, and only after this point, can you look at what your competition is doing
Quotes from the episode:
“One of the biggest ways your business gives back to you is by delivering to you financially. I think that energetic exchange is really important for you to feel successful and committed to the business.”
“I want you to look at what you’re paying yourself as one of the expenses of your business.”
“I’d encourage you not look at it like other people are paying you. Shift your thinking to, “I am delivering payment to myself.”
“You’re worth a million. Maybe not today, but you are worth a million. And it’s up to you to give it to yourself.”
Have any other questions related to money? Shoot us an email at firstname.lastname@example.org. We will try to answer your questions on an upcoming episode.
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Alright dollar dreamers, thank you SO MUCH for tuning in and we can’t wait to talk to you again next we on Six Figs Podcast. Now go make that money honey!