She's On The Money - Back Yourself, Set Your Prices...& Raise Them!

Episode Date: February 27, 2024

Ah the mysteries of pricing! But pricing your services is not just about numbers; it's about knowing the value you bring to the table. Confidence in your pricing is directly linked to confidence in your worth. If you don't believe in yourself and your value, how can you expect others to? On today's episode, Victoria and Jess discuss how to set your prices, when to increase them, and most importantly, how to back yourself in the world of business! Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. Hello, my friends, and welcome back to another episode. If you've been thinking of starting a side hustle or a small business, my friend, you are definitely in the right place. I'm Victoria Devine. I'm an ex-financial advisor who has a background in psychology, and I currently run several successful businesses. As always on my Business Bible episodes, I am joined by Miss Jess Grici, who is one of my beautiful friends, but also one of the hardest working side hustlers I know. Jess, how are you? I'm good. I'm pumped. I've got my Stanley. I'm ready to dive into the episode because it's one that I'm super passionate about. I've been loving doing all the Business

Bible episodes and based on the feedback that we're getting in our DMs, hello, we see you, thank you. So are you guys, which is exactly what we wanted. That's my favorite bit. I'm like, social validation. Yay. We love it. We'll talk about imposter syndrome later, but that has been really helping mine. I'm obviously very passionate about backing yourself. I'm really passionate about knowing your worth and then adding tax. How many times on She's on the Money have you heard me say that? But today on the show, we are talking about the mysteries of pricing, how to set your prices, when to increase them, and most importantly, how to back yourself in the world of business, which is something that I feel like I'm constantly

ranting and raving about when I meet small business owners in the wild. I'm like, so pricing. Let's talk about it. It's a little bit of a spicy topic, but we need to be across it. It makes you uncomfortable. I know, but that's why we need to dive further into it. It's so essential as small business owners that we back ourselves. Can you tell us, VD, why it is so important for someone to back themselves in the business world? Look, obviously you've got to back yourself. Like there is nobody who's going to be able to back you as much as you can. I mean, there maybe are people who are passionate about She's On The money right but like there is not going to be one person in this entire universe who cares more about

she's on the money than me yeah and you need to be able to validate that and back that and if you can't be that person it is detrimental to your business so the reality is if you don't believe in yourself and your value how on earth are you going to expect others to confidence and having the confidence in your pricing is directly linked to I guess confidence in your worth as a human being as well, which it shouldn't be. But how many times do we go, oh, I only charge or, oh, don't worry. Like we really undermine our own value, which to me is toxic. It's not just about the numbers, Jess. It's about knowing the value you bring to the table and being able to clearly articulate that. Yeah, I completely agree. So let's not start with the confidence piece. We

can touch on that, but we've spoken about it before and you can go back and listen to those episodes. Let's start with some actual strategies because more often than not, when I get a framework to build on, I feel like I'm a bit more confident in kind of following through on that. So let's talk about pricing strategies specifically. What are some of the popular ones that small business owners should maybe look into? Sit down with a notepad and paper. I have three that I want to go through. There are obviously a plethora of different pricing strategies out there, but I have picked these ones because I feel like they hit the nail on the head for our community in terms of like starting the conversation, starting your mind thinking. There's obviously way more,

go do some research, but here is, you know, biasly a very good start point, Jess. Love it. So the first one we're going to talk about is cost plus pricing. So you're calculating your costs and then you're just adding a markup. Then there's going to be value-based pricing, where you set your prices based on the perceived value of your product or service. And then we can't forget about competitive pricing. And that's where you analyze your competitors and you then charge and position yourself accordingly. So I feel like I've picked three very different strategies to talk about because hopefully one of them fits with you.

And I feel like in our business, Jess, we kind of do a mix of all three. Like there's no perfect one size fits all approach. And I think it's very important to me to be clear about that at the start because I think sometimes we think, oh, there's frameworks. We've got to lock ourselves into one of them. Absolutely not. Different products inside a business might be, you know, charge differently. So for example, Jess, you and I, we work together very closely on the She's on the Money podcast that is sold differently to our courses or our books. So I think it's important to put that there. First up, back to the start, we're going to talk about cost plus pricing. So this is a relatively straightforward method where you calculate the cost of producing

your product or service, and then you just add a markup and determine what the selling price is going to be. It ensures that you cover your expenses and also generate a profit. It's a pretty solid foundation, let's be honest, especially for businesses who are starting out. But do keep in mind, it might not actually capture the full value that you are providing. Talking about value, we have value-based pricing. This strategy actually revolves around the perceived value of your product or service in the eyes of your customer, not you, in the eyes of your customer. It's not solely based on the production costs, but rather on the benefit and the solution that you're bringing to your clients. So think about the problem that you're solving and then the unique

value that you offer. Then what I want you to do is set your prices accordingly. This approach can actually lead to higher profit margins if your customer recognizes and appreciates the value that you provide. And I think this is one where that's a bit harder to wrap your head around because if you're lacking a bit of confidence in business and you need me to come and like can boot you up the bottom so that you actually go, oh, you're right, Victoria, I am really valuable. I do actually have a lot to offer, which you do. That one can be hard to wrap your head around if you don't have the confidence because you go value-based pricing, like, oh, maybe it's not worth anything, V. What are you talking about? It feels like you're pulling a number out of the

air. That is not the energy that we are taking into 2024 at all, Jess. And then let's move on to talking about, quickly, competitive pricing. It's a classic strategy. It involves analysing what your competitors are charging for a very similar product or service and then positioning yourself in the market accordingly. So I think it's also important that while it's essential to stay competitive, I don't want you to undersell yourself. It's so easy to get into like, we're the cheapest war, but that's where we need to also go back and kind of put our value-based pricing hat on as well when looking at competitive pricing. There is always going to be someone who says, Jess I could do it cheaper all right well could you do it as well as I do yeah and we also need

to see the value that we have because Jess you and I could go into the market with exactly the same product let's pretend we both invented coke and we are both selling cans of coke one way but we're both selling cans of coke and we're sitting down and you just go all right well V sells the same product as me. You're just going to sell it cheaper. Is that where you actually want to lead your business and your strategy? Is that actually a really good, you know, strategy? Should you maybe differentiate yourself in the market, have a different target demographic, you know, maybe look at rebranding or changing it. We're not saying completely do a different product because someone else is there. But also you're going to find that there are a lot of

people who don't want to buy Victoria's Coke. It's Victoria's. It doesn't matter if the ingredients are identical, they really like Jess. They really like Jess. They love her authenticity. They align with her value. They align with you. We need to remember that that exists in business as well, because you could sell exactly the same product, but your consumer might be attracted to you, not because of the product or the fact that it's identical to someone else, because they're supporting you. And that's really cool. If everyone keeps undercutting each other, eventually no one's making any profit. Exactly. And it's going lower and lower and lower.

It's a really big balancing act between being in line with what the market expects and then ensuring that your prices are reflective of the value that you're actually bringing to your consumer. So for me, that's a good one to understand. And obviously, these strategies are kind of like tools in your business toolkit. And the key is to choose the one that aligns best with your unique value proposition. To me, the beauty is you're not confined to one, Jess. As I said before, you can mix and match.

and do please feel free to mix and match based on your business's evolving needs. I guess, as I said before, this is how I manage pricing in my business. There's not just one size fits all pricing strategy because sometimes that's just not going to work and vice versa. I think they're all really good options. I think it can be super overwhelming when you're sorting out your pricing, especially when you're first starting out because you have no baseline, you've received no feedback, you've got no idea. And that's where I guess assessing what other people are doing can be really useful but I think that's also why it's really great to lean on the community of people around you like the business bible community exactly talking to other people

in business bible community talking to maybe other friends you have that have started businesses or people that are working in similar spaces because having those conversations I think I've had a few aha moments where I've spoken to someone and said oh I'm charging this for this and they've gone oh my god you should be charging five times that and yeah oh my god what have I done exactly so I feel like I personally like to definitely look at what other people are doing and depending on how I'm making money, as you said before, it changes. When I rent dresses, I do try and undercut the market a little bit. Yeah, 100% because you just want to see the dress out the door. Exactly right. But when it comes to, I guess, my small business and my prices for content

creation, you do have to look at value and it can be hard because sometimes people think it's such a simple thing. And it's not. And I've had that too before, obviously. I think we should do a whole episode on how influencers get paid. I think people would be so pervy. But, you know, I've had people approach me and say, hey, like, you know, we want a video for this and, you know, a couple of photos for this. And this is what we would like you to create. And, you know, Jess, you might go back with my prices and be like, cool, V charges X, Y, Z, and this is it. And they go, oh, well, such and such could do it way cheaper. Can you match it? And you go, well, I'm not such and such. Like, there's a reason you came to me instead of that person.

and I'm hoping that it's because you can see my value and my authenticity and what I bring to the table and how that is very different from what they do and if that's the price you want to pay go with that person yeah I'm not going to match them just because somebody else is charging less and I think there's a lot of power in being able to say that like I remember when we first went back Jess I was like ah they're gonna ditch me and sometimes people turn around and go yep absolutely fair call yeah you go exactly yeah so I think being able to articulate your value once you as a small business owner know why you're charging what you're charging, you can articulate that to consumers. And it can also give you a little bit of confidence in what you're

doing. And I feel like all of the strategies that you've mentioned can help people feel a bit more on top of it. And maybe we should address the elephant in the room, which is once you've set those prices, how do we go about increasing them? Hello, I'm worth more today than I was yesterday. day. Good day to you, sir. That's it. End of conversation. Absolutely. So I guess the question here is like, when do you increase your prices? A good time is when you find out that somebody else doing exactly the same thing is charging five times what you're charging. But with this, timing is key. It often really comes down to increased costs and an improved offering and market demand. So I feel like increasing prices, a lot of people are like, oh, I'm really bad at it.

I think it should be an annual thing. It should be a calendar reminder. Hey, on the 1st of January, I increase and review my prices every single year. And I think that by setting that expectation with your consumer, they don't not expect it because it's very hard to be in business for 10 years and have, you know, your candle selling at $20 a candle. And then after 10 years, you go, actually need to get back on par with the market. My candles are now $70 each. Shocked at the system. Shock to the system, your consumer is really confused because you've put it off for so long because we all bury our heads in the sand, but ultimately it shoots you in the business foot.

So to me, the important thing here is to really communicate the value that you're providing. If your customers see the value, they'll be more accepting of the changes and increased prices. It's a topic that can make even, I guess, the most well-seasoned business professional a bit jittery. Like it's not something that is easy to have a conversation about. Like, I am so good at empowering other people to increase their prices, Jess. The second I do, I'm like, is that reasonable, Jess? Do you think that's reasonable? Do you think they're going to think that I'm absolutely taking the mickey? Like I get the analysis paralysis as well. Don't worry. I wish I didn't. I wish I could be like, I don't follow in my footsteps, but let's be real. This

is more about being authentic. To me, it's crucial to recognize the value of what you're offering and the expertise that you're bringing to the table, right? So small business owners are so guilty of this, Jess, and it is underestimating their worth. But here's the thing, your prices should actually reflect the growth and enhancements that you've made on your products and services. My friend, if you've been doing this for 12 months, you have 12 months more experience than what you did a year ago. That is worth something. Like whether it's 12 months or tenure, it doesn't matter. We should be consistently reviewing our prices. And honestly, do not be afraid to back yourself and the value that you provide. Confidence in your pricing, it's going

to sustain your business, but it's also going to make sure that you have the resources to continually improve and innovate. Like you didn't just jump on a hamster wheel, so it could be a hamster wheel forever. Like we need a whole hamster castle and we are slowly building it. And whether that is you know your intention or not you need to be updating it I don't care if it's your side hustle and you go oh V but you know I'm like Jess I just do some content creation on the side it's not my full-time job I don't even know if I want it to be my full-time job cool well indexation happens each and every single year I don't even care if it's your side hustle and you only do a few small gigs a year they're more expensive next year because the cost of a dollar today is more

than a cost of a dollar tomorrow. So I don't care if it's a small business or a side hustle or something you do occasionally, we need to revisit our prices. And I think the smaller your business, the more you go, oh, it's not worth it. Like I just do it on the side. You might be like a mum and you do like birthday cakes on the side. You might get one or two a month. They're more expensive next year, my friend. It's the way the world works. We need to keep up. Otherwise you're going to be undervaluing yourself. And that's not what we do in business. That's not very business Bible, is it? Not at all.

So Jess, when you back yourself, you're not just increasing your prices, you're investing in the future success of your business and you need to remember that. Small business owners absolutely well and truly deserve to be well compensated for the incredible value that they bring to their consumers. Sometimes it's just really hard to see that. Like not the consumers, they see it, that's why they pay you. But it's so hard for us to see it ourselves. So shying away from acknowledging your worth and making necessary adjustments to your price

strategy is going to shoot you in the foot. I promise you have earned it and you are worth it and you deserve it. Just do it. Yeah. I think as well, it's about communicating with your community. Like I follow a few small businesses that I've purchased from, maybe I follow them on Instagram and particularly for product-based businesses in the last 12 months or so, I've seen people say, hey, everyone, like the cost of freight has gone up, the cost of my

ingredients or my materials has gone up. So as of, you know, the 1st of July, we're putting our prices up X, Y, Z and that transparency can one, help you seem really authentic and relatable and two, help people understand why you're doing it. I think sometimes we worry about looking greedy and particularly for someone like me who has a service-based business, I'm providing content, I'm editing content for brands or I'm producing content for them, for my platform, for their platform, whatever they want. it can be harder to quantify because if I was working a pay-as-you-go job I'd have an hourly

rate and that would be it. But that's not what you're doing. Yeah and so it's kind of one of those things where I think even if people are going to come back to you and question it saying oh as you were saying earlier I am an expert in my field or I produce quality at a higher rate than perhaps other people do or I put time to do research on your brand and create something that really speaks to your history or whatever that might be. I think articulating that to whoever you're talking to can really help you feel a bit more confident in talking about those prices and those price adjustments. But let's go to a really quick break, I think. And on the other side, we're going to chat about some of the hurdles that small business owners face when it comes

to making the decisions around their pricing. Don't go anywhere. all right Jessica Ricci we are back and I am excited because it's about to get a little bit juicy we're in the midst of exploring the intricacies of pricing in the world of small business and how to actually back yourself obviously I am Victoria and Jessica thankfully hasn't run away from me yet we are discussing pricing strategies and the importance of backing yourself so let's address some of the hurdles that small business owners face when it comes to those pricing decisions, VD, what are the common challenges and how can we as small business owners try to overcome them? All right. So one of the main challenges that I see from small

business owners and side hustlers alike, I touched on it really early on in the show, it is imposter syndrome, which is that nagging feeling of not being worthy or not being up to scratch or that someone's going to tap you on the shoulder and be like, hey, Victoria. So yeah, you know how you were a financial advisor and now you're not. Yeah, you actually have to leave you don't know what you're talking about you're a fraud regardless of your degrees it's just not good enough please sit down like how many times have we all had that feeling in the back of our minds when trying to you know push forward with a new product or you know offer a new service or just show up on social media like the amount of times I'm like oh like it's funny coming

from somebody who has a lot of followers but like I'm either all there and you're getting 12 Instagram stories a day or it is deadpan from me. And that's usually when I'm sitting there going, oh, am I doing the right thing? Do people think I'm silly? Like I still have those moments. So it's really important that small business owners recognize their unique skills and experiences and understand that that's what actually sets you apart. Another one of the hurdles is, and I get this a lot, a fear of losing your consumer or your audience. But the reality is that quality and value will always outweigh price in a customer's mind. And if it doesn't, they're not the right customer for you. Yeah. Imposter syndrome is the worst. It's

something that I've definitely struggled with. And I want to know a bit more about you kind of maybe struggling with it too. Yeah. Obviously, I've mentioned that I have. And if I'm being honest, like I would say it's a weekly struggle, not daily anymore. Sometimes I wake up and I'm like, oh, hello, audacity, let's go. But it's something that I definitely struggle with still and it's something that I often find myself checking in regularly with because it's so easy to feel like you're you know beyond your depth but we need to remember that we're not and ultimately Jess we're all just out here making it up like if you see someone selling a very similar product to you online and you're like oh my gosh they know everything no they just are pretending

to know everything like every single one of us has been on the journey before of where you're like I don't know how to do a website. Cool. Now I've done my own website, Jess. Slay, I know how to do that. But you might look at me online and go, Farah, I can't believe V's just finished all of her own websites. I'd never. Mate, do you know how many times I cried over that? Because I didn't understand the process. I didn't know what was going on. But you learn as you go. That's half of the brilliance of small business owners. That's what we are willing to do. So I need you to remember that. But also you need to know that you are exactly where you are supposed to be. it starts with mindset and you need to believe in the value that you provide. And then remember that

you're not just selling a product or a service, you're solving a problem for your consumer. I also want you to regularly assess your price and ensure that it aligns with the value that you're, I guess, delivering, because that will give you a level of confidence. You go, actually, no, I am worth that price or no, my paintings are worth that. If people are messaging you online, because people online have so much audacity, Jessica, going, your prices are too much. Okay, no worries. Like go find less. Yeah. Do you think it's worth people popping a reminder in their calendar once a year, twice a year to check in with their competitors, to check in with their own costs, to review their pricing structure, to make sure that it is actually a guaranteed

annual thing that they're doing? Yes, 100%. I think being aware of your competitors is really important, but you can also end up overwhelmed by them. So we need to make sure we're not doing that too often, because if we do that too often, we could find ourselves in that sticky situation where comparison is actually the thief of all joy. Yeah, a hundred percent. So it's all about having that confidence and reassessing your worth and just making sure that you're being paid what you deserve. Exactly. I guess when it comes to a lack of confidence or imposter syndrome, I would say it's the silent underminer that plagues a lot of us small business owners and overcoming it. It's actually just going to start with recognizing where you're standing, what's going on, going,

you know what? No, this is a joke. Obviously more women than men suffer from imposter syndrome. So if you're a man that suffers with it, fantastic. We need to deal with it. But if you're a woman, it's kind of expected that you go through something like this because the entire universe somehow works against us and makes us question our authority at all points in time. And it's really easy to, as I was saying before, fall into that trap of comparing yourself to others and going, all right, well, far out. Jess is really good at creating content. You know, she creates content for herself and like brands and puts it on her socials. Sometimes brands pay her and they just put it on theirs. So like, this is wild. Like I could never imagine getting there,

but what you're doing is comparing somebody else's middle to your beginning. And while looking into your competitors is really important for market insights. I think it's very important to have your finger on the pulse and understand where the market is sitting. We also need to make sure that you're not comparing yourself to somebody else's, you know, final destination. If you've just entered the market and you're comparing yourself to businesses who have existed for five years, they have had five years of learning and mistakes. And I guess it's really important to understand that everyone is at a different stage in their journey. So instead of letting imposter syndrome dictate your confidence, how about we start on focusing on growth and the progress that you've

made so far and celebrating that. Like, how cool is it that you identify as a small business owner? What are your next steps? Yes, great. That business that has existed for five years, of course, their marketing is going to be a bit slicker than yours. Of course, their product is going to have a little bit more refinement. They've had five years to work on that. But you might slip in and go, wait, hold on. Like I am pretty competitive. How cool is it that they've been here for five years and I feel like I'm on par. It's exciting. We need to celebrate ourselves. So I guess when we stop the comparison game, we're able to recognize our own worth and imposter syndrome kind of starts to lose its grip. And it allows you to confidently set prices that are

reflective of the true value of your business. It's honestly not always about being exactly the same as others. It's about being authentically and unapologetically you. And don't forget, I want to remind people because I have been doing this recently, social media is actually only ever going to be a highlights reel. Even when small businesses are sharing their like behind the scenes content of them struggling, Jess, let's be honest, they're never going to show things that would actually risk their business, right? Yeah. They're not going to go, oh yeah, messed up my taxes last year, had the ATO chasing me. They're going to be like, oh my gosh, look at this product design. We ordered it and thought it would be perfect and it just didn't work out. And you're

like, okay, so we're not really being that authentic here, are we? We're trying to obviously share as much and be unapologetically us and authentic with our audience. And I think that's really important. But when you are comparing yourself to other businesses, just remember, they are never going to show the shit show. No one would. It would be silly to do so. It's always going to be on some level curated because they're selecting what they do and do not show you. And it's so easy to get wrapped up in how well other people are doing and forgetting to focus on yourself and your business. But I'm feeling like I need to give my side hustle a little bit more love and get clear on my pricing strategies moving forward. So what do you say we

call it a day and I jump right in? I think that is a good idea. I think it's time that you and I actually took ourselves out for some well-deserved tacos. Thank you so much for another beautiful episode. I cannot wait for next month's. I wish they were more frequent than monthly. We'll work on that after i've had a baby and sorted my life out but have the best week guys and we'll see you on friday see you then the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision if you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards

your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289. Thanks for watching!