Welcome back to another episode of Sustainable studio series! I'm Poornima the CEO & Founder of BizeeBee, I know you're passionate about your business, but you need to balance pursuing your passion with some business intelligence.
Since many of you are bizee building I've come up with this sustainable studio series. In this video series we will explore 1 suggestion every week to help you build a sustainable studio business!
Even if you're a private instructor and don't have a studio you can make use of these suggestions to build a sustainable business.
In the past few episodes we covered systems you need to put in place to create a sustainable business like marketing and financial tracking systems.
In this next set of episodes we're going to cover some of the touchy subjects that are holding your business back from becoming a sustainable business!
One of the main issues I see time and time again that hold business owners back from building a sustainable business is pricing.
In today's episode I'm going to encourage you to not be a pushover when it comes to pricing!
I know its a recession out there but if you don't price your services correctly you'll be facing a depression!
Let's first cover why you need to be pushy?
I know you're passionate, and would share your service with your customers for free! But have you ever noticed that even when you giveaway things people sometimes don't bother to show up? Or worse yet they take advantage of something that is free or discounted. That's because you are undervaluing your service and as a result so are your customers.
The most effective and standard way to convey that what you are offering is of high value is through by price.
I know you're going to tell me that other businesses around town are cheaper. Great! They have most likely worked out a magic formula that covers all their operating costs and turns a profit. Or they might just be deluding themselves. Don't worry about those folks. Think about your business and what you need to make in order to become profitable.
So now let's talk about how you effectively price.
The first thing you need to do is figure out what you your number is i.e. what you absolutely need to make either per hour, day, class or whatever your basic unit is. Stick to this number! Do not go below that number. Going below the number will not lead to a sustainable business.
The reason you need to figure out your number is because you will start to believe that is your number and you will be genuine when you convey it to your customers.
If a customer scoffs at your price, you could explain to them kindly why your rates are as high as they are. For example, if you are teaching private class you need to factor in the cost of gas or a train ticket to get to the customer. Or your business might be in a high rent district.
Not every customer cares or is willing to listen, but some might understand. And you'll be surprised at the number of customers who actually come back to you despite your price if you do indeed follow through with a quality service.
There are those who might walk away, but truthfully servicing at a lesser price is actually putting your business in jeopardy, because you're now paying to service them!
The important point is to stand your ground and know your value. I've come across many businesses in the past couple years whose owners kept discounting, and eventually went under because of it.
To recap, I know it seems like everyone is price sensitive these days, and they are. But you still need to value your service and have others value it. Figure out your pricing, what that number is, stating it boldly, and not budge on it because that's what is going to help you build your sustainable studio!
Thanks and we hope you have a great day!