“You are making a choice every time you undercharge.” How’s that for a splash of cold water to the face?! Bad pricing strategy puts your business—and your body—at risk. As today’s guest, Erin Haag says, when your prices are too low, “You are choosing to work an additional 10, 20, or 30 hours per week to generate the income you need to survive.”
In this conversation, Erin shares what led to two hospitalizations from back-to-back stress-related illnesses, followed by her aha moment: doing the math to determine exactly what she needed to do to go from the brink of business collapse to becoming debt-free and selling her pilates studio for a 40x multiple.
More About Erin: Erin Haag is the creator of Pricing Overhaul and a self-proclaimed math nerd. Using her over 20 years of corporate experience working intimately with numbers and pricing metrics, she created the Pricing Overhaul™️ method will help people shift their mindset around money and math, overhaul their pricing for profitability, and make more money inside their business than they ever dreamed possible. Her upcoming book, Give Yourself a Raise: The Mindset and Math You Need to Get to Your First Million, shares her story of hitting rock bottom, pushing her to overhaul her entire business.
🌟 3 Key Takeaways:
- You can charge more than your competitors (and what you can afford.)
- You can increase your prices without upsetting your best clients.
- Space creates more money: “A hectic schedule and tons of stress creates less money. I promise you that.”
📝 Permission: Give yourself a raise! And outsource everything you dislike doing.
✅ Do (or Delegate) This Next: Do the math to determine A) the monthly revenue your business needs to generate so that you have at least 30% profit (beyond what you pay yourself as the owner). “In other words, the total amount of money your business needs to generate each month to cover all expenses, pay your team, pay yourself, AND generate a profit on top.” Bonus: Next, determine B) your ideal monthly client capacity (how many people you want to serve given your available time), and C) the ideal client value (by dividing target revenue (A) by number of clients (B).
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