How to Value Your Products the Right Way

Mike joined Sean Castrina on The 10 Minute Entrepreneur to talk about pricing. It is a short, punchy show, so he kept it to one big idea. Most owners value their products wrong, and it quietly costs them a fortune.

Here is how Mike thinks about setting a price you can stand behind.

Most experts undercharge by about half

The pattern Mike sees over and over is simple. Owners charge about half of what the work is worth, and then they pile on about thirty percent more work than the offer needs. Both habits come from fear. You worry the price is too high, so you drop it, then you add extras to feel like you earned it. The result is thin margins and a business that feels like a grind. The price was the problem the whole time.

Price the problem, not the hours

Mike's fix is to stop pricing your time and start pricing the problem. Ask what the client's pain costs them over one month, three months, six months, and a year. Add it up. When you see the size of the problem in numbers, your price starts to look small next to it. A premium problem earns a premium price. Hours pricing hides all of that and leaves money on the table.

Belief comes before the price

Here is the part people skip. You cannot hold a price you do not believe in. The moment a buyer pushes back, you will fold, because deep down you were not sure either. So do the math on the problem until the number feels obvious to you. Belief precedes price. Once you believe it, holding the price stops feeling like a fight. For more on setting up offers and pricing that hold, the 21st Century Entrepreneurship episode is a good next listen, and the Startup Canada conversation covers similar ground.