Undercharging? Death of a Business

In the competitive world of business, selling your services cheap may seem tempting. After all, a lower price tag on your services may help you attract more clients than your competitors, right? But when you are in a field like consultancy or coaching, you need to ask yourself, “Is undercharging for my services worth it in the long run?”

What sets apart a consultant from the others is your intellect—or, more specifically your wisdom. Cheapening or devaluing your wisdom to a level that in line with or less than that of a competitor may not be a good idea. Also, it is simple business psychology that people expect providers to reduce their prices even more if they are already offering their services at a fee lower than the average market rate. By reducing your fees you are buying into this psychology. If that is the case, then you may want to ask yourself, “What is my true value, and how this is being reflected in the fees I charge?”

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Client Management: When to Fire Clients

As a consultant you want both money and work satisfaction, right? You’ll get these two vital things only if you have the right clients. So, what do I mean by the “right clients,” you may ask? The answer: your clients should respect you, value your services and pay you well. As a small business owner you do not go into business for yourself with the risk and investment to lose money or just break even. You go into business to make money. Part of the responsibility of working for yourself is about knowing your limits and your area of expertise. When you don’t honor these elements, you run the risk of losing more than you could be gaining.

Several consultants have a huge client base, but their earnings really come from 20-25% of them because a lot of people try to squeeze as much as they can out of consultants without paying them what they deserve. Then again, there are also clients who treat consultants like commodities or mere trainers. While such clients may pay you well, at the end of the day people who don’t value your services are not good for your overall brand image. This is one of the many reasons you need to be able to truly identify your key target demographic and/or perfect client type.

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