5 signs you’re undercharging

Is your business undercharging for its services? It can be hard to tell, particularly if you’re in a niche industry or you’re a contractor. Costs have been rising, so it is a good time to rethink your own pricing.

Here are five signs that you might be undercharging:

1. Nobody ever questions your quotes – Do all your new clients accept your quotes or charges without asking any questions, requesting a breakdown or wanting a discount? It’s possible they’re delighted to be getting such a great deal.
2. You run off your feet but you can’t afford to get help – When you’re working yourself to the bone, but there’s not enough money left over to employ someone to help you, your prices are too low – or something else needs to change.
3. Your prices have been the same for two years or more – In most industries, prices increase just slightly each year. Leave your prices flat for too long and you’re not keeping up with the market; make sure you review your fees annually.
4. You’re overbooked – When business is booming and there’s no room for new clients, it’s time to raise your prices.
5. Clients don’t treat you as well as they should – When clients think they’re paying peanuts, they’ll often take you for granted. They don’t see your time as valuable, so they feel free to mess you around.

What should you be charging?

As already mentioned in another article, finding your pricing sweet spot could take a little time. You’ll need to do some research, maybe ask around a little, and find out where your competitors are pitching their rates. You’ll also want to keep in mind your current business overheads, in order to make sure you’re breaking even. 

How we can help

There is a lot to think about, so don’t go at it alone.  We can help you find the ideal pricing point for driving both sales and profitability. After all, that’s what you want, right? 

Our team of Business Advisors have a lot of experience working with NZ small businesses across a variety of different industries. We’d love to help you understand your business financials and build the business of your dreams. Reach out to us today and let’s get started!