5 Tips to Break the Cycle of Undercharging, Under-Earning, and Overworking

Time, energy, and money. These three resources influence everything we do (or don’t do) on a daily basis. They impact our ability to live our great lives and they are undeniably intertwined.   I guess that’s why I hate to waste any of them (especially time).   If you think about it, how you choose to use, guard, and maximize these resources directly affects your success in your business and your personal life.  Not making the best use of any one of these resources could send you in a downward spiral.

For instance, if you aren’t using your time as efficiently as you could be, you’re probably working too hard (expending too much energy), working on the wrong things (wasting or misdirecting energy), or working too little (not maximizing or capitalizing on your energy).  Each one of these scenarios leads to under-earning (not maximizing the amount of money coming in).  This, in turn, leads you to feel like you need to work harder and longer.  The result is a vicious cycle of over-working for way too little money, and way too little satisfaction.

Unfortunately, I see many entrepreneurs working way too hard for way too little money quite frequently. Many times it’s because they don’t have systems in place that would save or maximize their time, money, and energy.

However, one of the costliest mistakes I see is undercharging.  When you undercharge for your services, you are, in essence, choosing to work harder and longer for too little money.  You are choosing to waste your time, energy, and money.

Here are my top 5 tips to break the cycle of undercharging, under-earning, and overworking:

  1. Do the math. Sit down and figure out how much income you need and want to bring in on a yearly, monthly, weekly, and hourly basis.
    Be sure to take into account how much time off you’d like to enjoy each year and how many hours you want to work per month , per week,  and/or per day.  You have to be clear on what you need to make in order to be profitable and live the lifestyle you want.  Having a clear goal is the first step in achieving success.
  2. Charge based on the value you provide.  Charging by the hour is arbitrary and doesn’t really make sense.  Think about it.  Why would anyone pay for someone else’s time?  People hire you because you have the skill and expertise to help them solve their most pressing problems and fulfill their greatest desires.  What is it worth to them to have their desires met? What is the cost of them continuing on without solving their problem?  Provide great value to your clients and charge accordingly.
  3. Package your services for consistent income and consistent results.  When you charge by the hour, by the session, or even by the month, you are setting yourself up for inconsistent income and your clients up for inconsistent results.  I know some people will argue that they provide a service that can’t be packaged, but I’ve yet to come across one.  Even if you’re a hair stylist, you could create a yearly package that includes haircuts every six weeks, a bi-weekly deep conditioning, and a holiday up-do.  You’re client would have healthier, better-looking hair and you would have consistent income.  Packages maximize the time, money, and energy for you and your client.
  4. Realize you are not Wal-Mart.  You are not trying to impress people with how cheap your prices are.  Don’t market to bargain hunters.  Market to your ideal clients who expect the best and are willing to pay for it.  If you’re wondering about how to do that, don’t worry, I’ll give you some tips in next week’s blog.  The most important thing to remember is that you don’t “discount” your services without good cause.  Simply thinking your client can’t afford your services is not good cause.
  5. Own your value. Stand firm in the value that you provide and what you’re worth.  No one can ever pay you less than what you think you deserve.  Think about it …

I’d love to hear what you have to say. Please feel free to share your comments below.

© 2011 Tiffany deSilva and Order and Balance, LLC.

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“Want to learn more about how you can build a highly-profitable business without the stress and overwhelm? Discover the secrets to create an elegantly sleek, and sustainable business, consistently attract all the clients you desire, and live a passion-filled, brilliantly-rich life!  Visit http://www.SeamlessSuccess.com  for F’REE tips, tools, and strategies that empower you to make great money while doing what you love!  While you’re there, be sure to grab your copy
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6 Response to “5 Tips to Break the Cycle of Undercharging, Under-Earning, and Overworking ”

Linda Pucci
October 26, 2011
5:41 am

Comment :

Great post, Tiffany! So often people don’t see the relationship between those three important resources and sell themselves short. You point out why it is vital to know who your ideal client is, because you can then offer them things of value. Competing on price is a losing proposition (maybe unless you are a huge multinational corporation like Wal-Mart).

Jeff Brunson
October 26, 2011
12:43 pm

Comment :

This was powerful, “People hire you because you have the skill and expertise to help them …” As individuals on our own out here doing our thing, we must – absolutely must – believe that. Thanks for these great thoughts and that powerful statement.

Mary Ellen Miller
October 26, 2011
6:01 pm

Comment :

Tiffany, I am howling because I often say as I’m describing my company and its value to business professionals, “I’m not Wal-Mart.” Way to drive that point home my friend. There are some excellent tips here!

Sue Painter
October 27, 2011
7:23 am

Comment :

I agree with all these points. How we position ourselves as business owners has everything to do with the customers or clients we get. The bargain shoppers are not people who will sustain a business long-term. Well said!

Bill Painter
October 27, 2011
8:28 pm

Comment :

Great psot! Since we have a finite amount of time we can never make up discounting our work by volume. As you say, then we feel and are overworked. The real trick is to overcome the dollars for hours mentality and be confident that the value we give our clients is wekkwrth what we charge them.

Patrick Carr
May 7, 2012
11:15 am

Comment :

A very great article. Especially the packaging part #3.

I’ve undercharged in my business and gave constant “discounts”. as a result i got a lot of non-profits (turning out to be LOW profit for me LOL) or worse yet people who tell me “we have no money”. Sorry PqHost is not a charity and “we have no money” won’t cut it. I started to hate and resent my business and not even be in my office. I am switching my whole mindset. After being in 10 years business, it is rediculous that i have to use savings sometimes to pay bills.

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