Setting Your Fees and Prices
Pricing your services too high — or, even worse, too low — is a formula for disaster. Learn how to determine the right price for your speeches, products and services.
As you can imagine, a lot of setting fees is based on research and a lot is based on psychology. And you’ll be looking at both of those areas in future sessions. But before you can really explore the science and psychology of setting your fees and prices, it's vital that you understand the basic concept of "running the numbers". One of the biggest challenges that you'll face is recognizing that the "obvious" answer is oftentimes not the correct answer. And understanding how to look beyond the obvious answer to the right answer is a skill that will serve you well.
It sounds complicated, but a surprising amount of setting fees is based on simple arithmetic. I’m not talking about complex mathematical formulas — just basic addition, subtraction, multiplication and (occasionally) division. You can make awesome discoveries by spending just a few minutes with your calculator.
So why don’t speakers perform these elementary calculations — and make awesome discoveries? One reason is that they already know what the answer is. It’s obvious. The sad part is, the “obvious” answer is often the wrong answer.
Another reason is that people fear that any sort of financial analysis requires complex mathematical computations based on esoteric formulas. But as I just said, that’s just plain wrong. A few simple calculations can uncover some awesome discoveries.
That’s why you're starting this section with an examination of numbers themselves. Knowing how to perform some simple calculations will obviously be of enormous benefit in setting your fees and prices. But even better, when you get in the habit of “running the numbers” before making any business decision, you’ll find yourself making better — and more profitable — decisions.