Eric Deeran argues that business owners undercharge because they know how hard their work is, while clients don't and will pay for expertise they can't do themselves. Raising prices improves margins, cuts the number of clients you need, and simplifies everything.
A lot of business owners would just make more money if they raise their prices. And I know that's super generic advice that you hear all the time. Oh, raise your prices, raise your prices. But when you really look at it, I mean, so many of the business owners we work with are just massively undercharging for what they are doing. Because a lot of times, because you know how it works, you undervalue it. But the client doesn't know how it works, right? So it's like if I go to a mechanic and they charge me $200 to fix something in my car, I'm gonna pay the $200 because I have no desire to learn how to do it and I don't understand how it works. And so to me, that's a good deal, right? But if you're, you know, a mechanic and you're also saying it's $200, you could be like, oh well, that's a rip-off, I could do that myself. A lot of times your clients can't do it themselves. And so when you are constantly devaluing yourself because you understand how it works, You're robbing yourself of profit too, because the more you can charge, the higher your profit margin typically, the less clients you have to take on, the less team members you have to hire, and you just— all that flows to the bottom line as profit. And so I would really ask yourself, do I— am I underpricing myself because I understand how it works, or am I like, am I putting myself in a position where I just don't Like, I'm not charging as much as I should because I know how it works. And typically the answer is just raise your prices because it makes everything easier.
