are you charging the right prices?
Pricing is a huge part of your business. So why do so many birth professionals shy away when it comes to the topic of pricing? Birth is not a get rich quick kind of job, but if we are not charging the right prices it becomes nothing more than a hobby.
How do you set your prices? So many photographers select prices based on kind of random numbers. Maybe it sounded like a good number or maybe you know someone who charges that amount. This is not the best way to set yourself up for success in your business. You need to make sure your prices are realistic, profitable, and appropriate.
How to price
THERE ARE SIX MAIN FACTORS THAT SHOULD INFLUENCE YOUR PRICING.
1. The quality of your work and your finished product.
2. Your perceived value in the marketplace and the perceived value of your products/services
3. How confident you are as a birth photographer
4. What your competitors are charging and what the market will bear
5. Your cost-of-goods
The basic factors of quality, perceived value, and confidence are intangible factors.They are subjective. These are the basics of what you consider when coming up with what you are worth. (Read our Blog 5 Reasons to Charge What You Are Worthwww.betterbirthbusiness.com/babes-blog/5-reasons-to-charge-what-you-are-worth.)
Competitive pricing is important to note, but not the only determining factor. You don't want to just set your price at your competitors. Be aware of what other people are charging in your area for similar services. If you throw out your own price points without understanding your local market you could miss the mark and clients may consider you to charge an unrealistic price.
One of the often over looked price factors is cost-of-goods. This includes not only any physical items that go into your work, but also your time. So many birth professionals do not factor in how much time they spend doing things for a client as a factor of cost. How long did you drive to and from the birth? How many times did you meet with the client before the birth? How long were you at the birth? How long did you prepare material for education? Did you take photos and edit them? Often times all of these things adds up to 30 hours or more.
Most birth businesses do not have a large overhead cost expenses if they don't have their own office. It is the beauty of free lance birth work. Small expenses can add up if you don't account for them in your pricing. Will there be fees to park at the hospital? Did you need to hire a sitter for the duration of the birth? If you hire a sitter for $20 an hour and you are only charging an average of $20 and hour it would be like going to a birth for free. These are considered variable costs and only occur per birth.
Fixed costs on the other hand would occur if you book a client or not. This includes utilities, taxes, equipment, education, software, and so on.
Lets do a small break down real quick.
$60,000 annual wage
÷ 50 working week
÷ 40 hours per week
÷ 60 minutes per hour
= $.050 per minute
If our per-minute wage is $0.50, and you put a total of 30 hours in a birth, then your labor and hard costs for the birth come to $900. It is hard to base our prices off an fairly unregulated profession as we will use photography standards as our model. If we operate under the pricing model from the Professional Photographers of America than 35% of our revenue should be variable costs. The remaining 65% is eaten up by fixed costs and business profit.
In this scenario you multiply your cost of $900 by 2.85, which gives you a finial product price of a birth shoot at $2565.
Let's stop there for a minute. Many of you may be saying that $2565 is outrageous and you couldn't book clients at that rate in your area. That's ok. You've just hit on the other "influencing factors"
These are important discussions to have. Maybe with these three influencing factors you come to the conclusion that somewhere in the $1500 range is more appropriate and realistic for your price, and that's okay. You would need to price other similar products like placenta encapsulation at a higher mark up or offer a higher price point package to balance the lower mark up on the birth itself.
This is where you get to figure this out for your business. First, calculate what your per-minute wage is (annual salary ÷ 50 weeks ÷ 40 hours per week ÷ 60 minutes per hour).
What do you desire or need your annual salary to be? Some only need a part time income while others need to bring in a full time income. The average american salary is around $50,000. Don't sell yourself short here. Aim for what you want and what you need, not what you think others would find reasonable. If you think $100,000 a year is what you need and want than plug that number in. Granted you may need to add additional streams of income in order to make it work based on perceived value and competition. But know that it is not impossible.
next, determine your labor costs by recording (or guessing if your new) how much time goes into production of the finished product then multiply that time by your per-minute wage. Determine material costs by adding in hard costs associated with the product. Add these two costs together to get the total cost of your product.
Multiply your total costs by your mark-up of 2.85.
Adjust your price if necessary to be in line with your quality, confidence, perceived value and local market area.
This may seem like a tedious process, but it is crucial to the long-term success of your birth business. Repeat this process for each and every one of your products and services.
If you are looking for other streams of revenue check out our post on 15 Streams of Revenue for Your Birth Business.
5 reasons to charge what you are worth
Years ago I made my first "big" sale. I booked a new doula client for $500. It was like that scene from 50 First Dates where Drew Barrymore is doing a happy dance in public. I'd like to tell you I continued to churn out big sales and charge what I am worth from there, but I didn't.
To be honest, booking a new client for $500 was far below what I was worth. It was on the coat tails of spending too much time giving things away for free or low cost. Self-doubt continued to creep in no matter how much experience or training I had.
Will I be good enough? Will people like me? Is all this hard work and sacrifice worth what I am charging? Will anyone actually pay me to do this?
Does this sound familiar?
One of the biggest challenges for many entrepreneurs is feeling confident in charging what they are really worth. Many of us, including me when I started, "hope" by giving things away for free and giving deep discounts we will be rewarded. In reality, "hope" is not a marketing strategy and will not only lose you money, it will gain you clients you don't want.
Do You Know Your Worth?
If you don't know your worth it is difficult to set your prices to reflect your worth. You cannot base your own work solely on what others are charging or what you "think" people will pay. It is all about the value not the dollar sign. Consider the following questions when brainstorming your own value:
Are you starting to get an idea of what your value might be? The average person most likely does not have the knowledge and skill-set you do. Even if you are one step ahead of someone else, that is still one step they do not have.
Kick Your Limiting Beliefs
Even the most successful people have thoughts of doubt creep into their head. The difference is successful people make the decision to live with intent and shift their mindset. No one ever accomplished anything by staying in their comfort zone. What limiting beliefs are keeping you from accomplishing the things you want in your business? Do you feel nervous when charging clients higher prices? Work through your limiting beliefs. Hire someone if you need or join Better Your Birth Business for support.
Are You Working For the Right Clients?
Not everyone is the right client for you. Are you working with clients who want to pay you what you ask for or are they just looking for the cheapest deal? No matter what type of work you do, there will always be someone out there willing to charge less than you. Don't set a price just because it is lower than a competitor.
Make a choice to not discount yourself just to get clients. Make the choice to only take clients who are willing to pay what you are worth because they value what you have to offer. Clients who are hyper-price focused tend to end up consuming more of your time and causing more trouble than others. Working with difficult clients who do not value what you do creates a multitude of problems including lower self-confidence, higher incidence of self-doubt, and attracting more of those clients who don't value you.
Are You Ready To Get Serious?
The more serious you get about worth and intention the greater impact you will be able to have. Here are five reasons you should charge what you are worth:
1. More Focus. When you are not getting the $$ you need you are constantly hustling to get your next lead and your next client. When you have good revenue coming in it frees you up to have more time to focus on the important things. You can step back and take time on your content instead of trying to produce mass quantity. Quality over quantity. You can focus on creating more of the content that brings you the most clients. You can focus on doing more of what you love with those you love.
2. Better Content. Not only will you have more time to focus, you will be able to create better content. Being able to invest in your self and your business means you are able to create better things for your clients.
3. Reach More Clients. Stop making it about you and remember it is about your clients. If you have something of value then you are doing the world a disservice to not have your value out in the world to more people. Get your story out there. Invest in marketing and advertising to get in front of more of those right clients. You don't have to start big, but investing back into your business is a big part of being successful. If you are charging what you are worth you will have the means to reinvest in your business.
4. Deeper Connections. Once you reinvest and start charging what you are worth you will have more time to make deeper connections with your ideal clients. You will be able to spend more time creating experiences and devoting your skills rather than spreading yourself thin and trying to do it all. When you try to do it all you are not able to do things to your best abilities. Outsource things you are not good at or don't want to do so you can spend more time on the things in your business create trust, connections, and loyal clients.
5. Bigger Impact. Most entrepreneurs become entrepreneurs because of two things; freedom and impact. Both of which usually require a certain sum of money. Not everyones freedom looks the same nor does their desired level of impact. Do you desire to be a part of something bigger than yourself? Do you want to contribute to causes you are passionate about? Charging what you are worth allows you to leverage your earnings to create a bigger impact.
My goal is to be able to give more into causes I am passionate about than I live on from my business. To do that I need to charge what I know I am worth. I would have never been able to accomplish any of my goals if I had not started charging what I am worth.
Next time you get down to business and feel anxious about charging what you are worth, remember to focus on the benefits to everyone involved; you, your business, your clients, your audience, and all the other people who are touched by the things you do.
Comment below: What is the #1 thing you feel is holding you back from charging what you are worth?