Meeting Topic


In this week’s 60-second intro, read the article contributed by Sarah McMurray below, then consider sharing YOUR thoughts on pricing by answering one of the following questions:

  • What guidelines do YOU use to set your prices?
  • Where does your pricing position you in the minds of your prospects? – low end, comparable to others or high-end?
  • Do you think increasing your prices might boost your client or customer numbers due to creating a perception of higher quality service/product?
  • Is it time for a pricing review?

The Success of Your Business Depends on Your Pricing By Sarah McMurray

Setting your prices is crucial in determining the success of your business.

If your prices are too low, you may make some customers very happy for a while, but if you aren’t making a profit, you’ll go out of business eventually.  If your prices are too high, it could be hard to make sales, leading to exactly the same result.

Prices just right?  Well, hello Goldilocks!  Everything fits, you make money, clients are happy, and you stay in business, getting to fulfil the “why” that made you start a business in the first place.

The problem is, pricing is both simple and complicated.  Simple, because you just need to charge enough so that you make more money than you spend.  Complicated, because when you set prices you need to look at (and understand) your business accounts, consider your marketing, and deal with your own mindset.

Let’s start where it’s straightforward:

Working with your accounts is one of the easier parts of setting your prices.

If rational numbers don’t interact well with your brain, keep asking for a referral to an accountant or bookkeeper who can not only keep your accounts straight, but explain them to you in a way that you can understand.

You will know you are doing pricing right by your accounts when:

You know how many hours or items you need to sell every month in order to cover all your expenses.

Your cost price includes the expense of paying realistic wages or salary for the service provided.

Your business has a savings cushion to get it through seasonal dips in sales volume.

Any discounts you offer bring you something of value in return – either greater volume sold, or you are paid earlier than normal, or you’re turning old stock back into cash.

Making a profit is vital for any business.  But making your accountant smile is not the only thing you need to consider when you set your prices.

Your pricing needs to work with your marketing as well.

Have you heard the business story about the jewellery store owner?  She got sick of seeing the unsold items on a particular stand, and left a note on a Friday night saying “All of these: price/2”.  She meant, halve these prices, but the retail assistant didn’t understand the way it was written, so he doubled the prices.  The store owner came in on Monday to find all the items had sold at the new price level.

Pricing has a powerful impact on your sales and marketing, and not always in the ways you would expect.

Your main marketing/pricing considerations are:

That the quality message conveyed in your pricing is congruent with the rest of your marketing.  If you are trying to convince buyers that you offer superior quality, your pricing should reflect that.

Where you place yourself in relation to your competitors:  If you are many times more expensive, or many times less expensive than they are, then prepare to answer extra questions as to why that is so.

Don’t panic when a potential client says they can’t afford you.  This is OK.  Not everyone is your ideal client, and them not being able to pay you what you need to earn makes them not ideal.  Depending on your market, you could consider developing a lower-cost product or service to cater for these clients.  The key is, it must cost you less – you still need to make a profit.

If you find yourself needing to raise your prices significantly, then maybe this can be done alongside a change in marketing to reflect your higher quality / greater level of experience.  You could re-focus your business to work with fewer, higher-quality clients, who pay you more.

All the logic in the world, provided by both your accounts and your marketing strategy, will not help if your mindset is telling you that you can’t charge more.

I’m almost sure you can already think of at least three reasons why your business can’t charge more right now.  Even though you can see it makes sense for everyone else to charge more.   And, you can see why an outsider might suggest that you charge more, but you just can’t.

I really understand your reasons from the inside out. I know, because I bet I came up with the exact same reasons when I was told I needed to charge more.  It’s not a good time right now, is it?  And what if I lose clients because I charge more?  I’ll be even worse off!  Plus, I just need to get some more experience / extra qualifications – then I’ll feel I can charge more.

None of these reasons hold up.  Because, as good as they sound, they’re fake.  it’s our fears that stop us putting prices up.  The reasons we come up with are just so we don’t have to say out loud that we’re basing a business decision on that terrible feeling in our stomachs that if we charge more, people won’t do business with us – or even like us.

What worked for me in this situation was journaling.  Write out all the reasons you can’t raise prices, without judgement.  Put it to one side.  Re-read.  It’s easier to be clear about what’s a real consideration, and what’s an exaggerated fear of rejection when the words are out of your head and on paper.

Your accounts, your marketing and your journal – together they will tell you what to do when you review your pricing.

But when should you review your pricing?

If it’s more than two years since your last pricing review.

If you find yourself full of resentment – for the work you do, for customers who have the audacity to complain, for your suppliers who put their prices up – resentment is a sign that you’re feeling undervalued.

You’re the business owner.  Time to fix that.

You can find out more about how Sarah helps her clients here:

Next Meeting Topic

As you construct your 60-second introduction for this meeting, read the article below contributed by Kelly McNamara and consider your personal financial health as a female in our society. Have you accessed the support and advice you need to help you understand what your financial future might look like and taken the necessary steps to ensure it delivers not only what you’ll need but what you WANT as you get older?


Did you know that on average, women spend less of their lives in paid employment? We might be working part-time or out of the workforce for extended periods. The reasons for this vary between individuals but some common themes are raising children, looking after ageing family members, community involvement and the physical and emotional labour of running a household.

In addition to time out of the workforce, on average women are paid 12% less (!) than men. There are certainly strides being made in this space with several pay equity negotiations and settlements underway, but we will feel the effects of this inequity for many years to come at both an individual and societal level.

Why does it matter?

Generally, women will live longer and with less money than men. The average length of widowhood is 14 years but between the ages of 55-64 women’s KiwiSaver balances are approximately 25% lower. So, what do we do? Do we just live off the smell of an oily rag and rely on NZ Superannuation and the generosity of our children to see us through?

There is a stereotype that men are better with money and investing than women. If anything, men are generally overconfident and may overestimate their skills and knowledge when it comes to investing. While women tend to invest much more conservatively and have less confidence in their decision-making abilities.

The compounding power of saving and investing is often referred to as the 8th wonder of the world, so where do we start to ensure we aren’t missing out?

Prioritise financial planning. You could do this independently or utilise the services of a good financial adviser.

A 2020 study found that New Zealanders who get financial advice have, on average KiwiSaver balances over 50% bigger than those who don’t. Also, people who seek investment advice receive on average 4% per annum better return and have more in savings and investments than those who don’t. In the same study, 60% of respondents not currently receiving advice, felt they did not have enough assets or wealth to seek professional advice or that they could not afford it.

How can a financial adviser help you:

  • Goal setting – The Cheshire Cat in Lewis Carrol’s Alice in Wonderland says something along the lines of ‘If you don’t know where you’re going, then any path will take you there’. This is very true of our lives and particularly financially. Everyone will have different goals, whether it be travel, early retirement, maintaining a lifestyle once retired or helping children & community. Identifying your own personal goals is key to be able to move towards achieving them.
  • Create a plan – Often a good starting point can be to look at where you will end up, based on current behaviors with saving and investing. It may be that you are already doing enough to meet all your goals. I really enjoy this part of my job as it is such a comfort for clients to know they will be achieving the life they want. Alternatively, if you are not going to be able to meet your goals based on current behaviors, what can we change or tweak now to ensure you get there? Do you need to save more or spend less? Do your goals need to be adjusted? Can you take on more risk to achieve higher returns?
  • Being rational and managing risk – It can be hard to take emotion out of financial decisions which is part of why working with a financial adviser is beneficial. You should only take on as much risk as you need to, to achieve your goals. Also, the amount of risk you are willing to take on with investments will change as you move through different periods of your life. A financial adviser can help you have confidence in your decisions. Knowing there is a robust and rational structure in place to help you get where you want to go means you can prioritise and focus on other aspects of your life.
  • Regularly review – Creating a financial plan is like setting an ideal destination. There will undoubtedly be things that happen in life that blow you off course. Reviewing regularly means that changes can be made to your plan to take into consideration new information.

Be engaged in the process – Once you have identified your goals and have some structure around achieving them, the time commitment on an ongoing basis is very manageable. 2-3 hours per year, reviewing where you are in relation to where you would like to get to should be more than enough. If you are feeling really inspired and engaged in your financial journey, then there are plenty of books and podcasts available to increase your knowledge.

And now Relax – now that you have a clear idea of your destination and a plan in place to get you there, you can relax and enjoy the journey!

Recommended Reading – On Your Own Two Feet: The Essential Guide to Financial Independence for All Women

Recommended Listening – ‘She’s on the Money’ podcast – is available on streaming services

You can learn more about Kelly here:

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