How Proving Your Value Costs You Money and Loses Clients

If I were to ask you, are you committed to doing things the hard way? I’m sure you’d say no. But every day I see examples of business owners making what could be simple, instead very complex. What they don’t realize is that it’s costing them a ton of money in lost profits and sales.

Of course, we don’t do this consciously. The fact is, it’s something that we’ve grown up believing. We’ve learned to equate success with sacrifice, and high value with more.  If you’re committed to doing what it takes and are prepared to work really hard until it pays off  I’d like to play Dr. Phil for a moment and ask: How’s that working for you?

Yes, you need to have faith, develop a strong strategy, and be consistently committed to sticking to it. You also need to be willing to stretch yourself out of your comfort zone, and learn the technical skills needed to run a business. But muscling your way through and doing more is not the answer.

Here are two examples of how this backfires on you.

One: Under-pricing and devaluing your worth

I see this often with entrepreneurs who feel the need to work their way up. They’re inclined to start low and aim high, when they are far better off going for the gold right from the beginning. They price extremely low, and feel the need to prove themselves by discounting, giving a lot away for free, take work that doesn’t fit them, and limit themselves in many other ways.

As a result of charging low fees, they often get clients, and lots of them. The problem soon becomes getting the work done. They can’t keep up. They are afraid to market more because they can’t take on new clients. They’re becoming known for the work they don’t really want to do for clients who are not their ideal. They’re afraid to raise their fees because they’re worried they’ll lose the clients they have. And guess what? Clients who buy the cheapest solution are often the most difficult to work with. Does that sound like fun?

Two: Setting high fees and defending your worth

Other entrepreneurs who understand the need to set their prices higher often still give too much away because they feel they need to prove their worth. Demonstrating value is fine, but doing too much out of feeling the need to defend high prices, is not. Entrepreneurs who bend over backwards and stuff their packages with so many extras often don’t realize that although they might be charging and getting a premium fee, they’re chipping away at their profitability by going overboard. And the sad thing is that most of the time, their clients actually don’t want all of the extra stuff. They’re often overwhelmed by it! Or they draw out a process longer because they’re afraid letting the clients know how quickly they did it, will make it seem less valuable. I n either case, it takes away from the elegant, efficient solution the clients are more than willing to pay a higher price for. And it becomes unsustainable.

If you watched the popular 1980s sitcom Murphy Brown, you’ll remember Eldin. He was practically a live-in at Murphy’s home. What started as a simple project grew more and more ambitious but never was completed. You may have hired contractors like this.

When it came time for us to repaint our house a few years ago, I knew it was something we couldn’t take on. I was busy with my working and having a young child at home. In the past I had tried various painters and was really frustrated. While they were not around quite as long as Eldin, each job took far longer and became more complicated (and more expensive) as it progressed. They were sure to tell me how much work it was for them, how many steps there were to take, and why it was costing more and taking longer.

I decided to try someone else I found through a referral. He quoted me a higher fee than the others. But he sold me on efficiency and guarantee.  He let me know what to expect and made it very easy for me to say yes. The morning of the appointed day, he arrived at 7:30 a.m. as promised. All I had to do the night before was move furniture a few feet away from the walls and take down hanging items.

By the time I arrived home around 5 p.m. that day, he was gone. I had a beautiful, professional quality paint job in our family room, hallway and bathroom, and it was completely done. No mess, no fuss, and delivered as promised. I felt it was almost magical. This was not something I could ever do myself. Was I willing to pay more for that? You bet I was. And I’ve referred him thousands of dollars in new clients since.

So what does this have to do with doing things the hard way?

I encourage you to look at the two examples of business owners. If you see yourself in either description, think about what your value is to your clients. Most of the time, they are paying you to solve a problem, and the faster, more gracefully and expertly you can do so, with the least amount of work and inconvenience for them, the higher the value is of what you offer. Think of ways you can make it easy and effortless for your clients to say yes, and to work with you, instead of ways to prove you’re worth it.

Want to use this article? You can as long as you include this footer: Sherri Garrity is the Chief Corporate Fugitive and creator of the Five Keys Success SystemTM for ex-corporate employees and aspiring entrepreneurs who want to break free from the confines of their corporate experience and live outside of the ordinary. The Corporate Fugitive system demystifies the business of setting up, managing, marketing and growing a successful and extraordinary business. Visit www.corporatefugitive.com for information and step-by-step resources to take you from overwhelmed employee to extraordinary entrepreneur.

Reminder – Q&A Session this week

If you have specific questions that you’d love to ask me about starting, marketing and growing your business, I have some very special, very information and free business success events coming up.

The first one is Wednesday, February 24 and you can find all of the details here. (Note, check the Break Free tab on the top of this page often, this is where you’ll find this information. If you want to be sure to get information, enter your email address and name in the box on the top right corner of the page).

The fact is, I’d love to be able to work with every business owner one on one to help them design the business that is the best fit for them. I’d love to be able to teach each of you the simple, practical yet highly STRATEGIC ways you can step-by-step grow your business. I want every person who wants to or has left their corporate life behind to succeed and not have to give up their dream because they simply aren’t doing the right things. But I can’t work with every person who I’d like to be able to help, so this is my way of sharing my advice with you.  See you there!

What to do when fear freezes you in your tracks

“You miss 100 percent of the shots you never take.”

Wayne Gretzky
Canadian hockey player “The Great One”

If there’s one thing I learned early on in my career, and business too, it’s that I would never know the answer to a question if I was too afraid to ask it.

I’m the kind of person who tends not to hear “no” (just ask my husband) and this has served me well over the years. When I set my mind on something, I generally get what I want. But I can tell you that operating my own business has tested my limits and has required me to take some shots that I’d never have imagined in my corporate days. It was never required of me to step that far out of my comfort zone. Being extremely good at my technical area of expertise was enough to be successful in my career.

Over the last year, I’ve moved away from a lucrative consulting base into uncharted territory. I made a monumental decision to turn down contracts that equaled my previous corporate salary. I said no to renewals that would easily cover my living needs each month and then some, because the work did not match the vision I have for my life and my business. I also set the wheels in motion for growth that could take my breath away if I stop too long to think about it. Does this scare me? You bet!

So I am no stranger to fear. When I tell my clients that it’s ok to feel the fear, but not to let it stop them, I practice what I preach, and so do my successful business colleagues. What separates the thriving business owner from the struggling entrepreneur is not the absence of fear. We all feel it. In fact, the bigger the business, the bigger the fear! The difference is being able to continue to take action and stay focused in spite of it.

Fear can paralyze you in many ways, for example:

• Spending lots of time marketing, but no time selling
• Letting potential client leads go cold
• Being afraid to pick up the phone and call potential clients or others who could refer you business
• Not spending money on the things you need to grow your business, like getting help or professional advice
• Filling up notebooks with enough incredible ideas to make your business boom but not taking a single step to implement them
• Watching others pass you by with an idea you had months or even years ago

If you recognize any of these scenarios, you have opportunities right in front of you, at this very moment, that aren’t being acted upon. If you aren’t as successful as you’d like to be in your business, not taking action is costing you – 100 percent! There is nothing more important for your business than taking the actions that move it forward today.

I see this happen all too frequently, and what I’ve come to understand is that for many business owners who have brilliant ideas they aren’t pursuing, the overwhelm and fear they feel has hardened into a frozen ball of paralysis.

If you recognize yourself in this scenario, my goal is that you take action on the things that will get you the biggest return, the fastest. One of the ways you can do this is to get really clear on why you’re letting yourself stay stuck. You see, “stuck” isn’t a state of being that’s thrust upon you. It isn’t something that happens to you. It’s a place you got yourself into, which means with some help you can get yourself out!

Most of the time, when we’re uncomfortable with moving ahead with actions we know are good for us in growing and marketing our businesses, the source of these feelings can usually be split into one of two categories: things we avoid because we’re fearful, or things we avoid because we don’t know how to do them (and so we’re afraid of making a mistake, or appearing incompetent).

The good news is that as soon as you identify the real reason behind your discomfort, you can take steps to fix it.

Imagine the compounding effect of one snowflake being rolled down a hillside. What starts out as tiny, separately insignificant, unique snowflake gets bigger as it collects more of them. As the size of the ball grows, it also picks up speed. If you can imagine each of your challenges and fears as individual snowflakes, now you’ve got yourself a runaway snowball, chasing you down the hill! When you look at this killer snowball, it’s hard to remember that it was all started by a single snowflake!

When you feel overwhelmed, the first thing you need to do is separate the snowflakes. For example, are you really not calling a potential joint venture contact because you feel unprepared? If you feel that way, is there truth to it? Do you need to do some homework, and if so, what? Do you need advice? Do you need to learn how to do something? Is it only one little thing that you can easily solve now that you know what it is? Or are you simply nervous about it?

If you’re nervous about it, is it because you feel you aren’t ready? What would it take for you to feel ready? Is it technique and how-to information that would help you? Or is it simply a fear, that you can conquer once you’re confident that you’re prepared? Or that you can work through, on your own, or with help?

Being able to identify the areas that are causing you stress, or making you feel overwhelmed is really important. It allows you to control rather than feel controlled, and will help you take action on the things that will build your business.

Why Typical Business Advice Doesn’t Work

One thing I know to be true from my experiences advising and coaching people making the shift from employee  to entrepreneur is that our entrepreneurial journey is different.

So I was delighted to read this Forbes article by executive coach Dr. Steven Berglas. His article was so spot-on that I had to get in touch with him and share my observations. We had a lovely email exchange and I expect we will cross paths in California someday. Here’s what he had to say:

“There is a swelling class of first-time entrepreneurs, and they need help…This new class–call them newpreneurs–are born of circumstance rather than ability, vision or just something to prove, and they tend to launch new ventures in a different way. That doesn’t mean they won’t succeed–it just means they need a different kind of guidance.”

Yes, Dr. Steve, they do!

Because we’re different. And the things we experience in our journey from employee to entrepreneur have nothing to do with the length of time you’ve been in business. I’ve noticed the same trends and patterns in entrepreneurs with ten years of self-employment or more, as the “newly hatched” entrepreneur.

This time last year, I launched the Entrepreneurs Unplugged Telesummit which featured interviews with small business mentors like Michael Gerber, Melanie Benson Strick, Kelly O’Neil and so many more who shared their experience and advice on leaving the corporate world.  At the beginning of that series we reviewed the most common mistakes made by corporate fugitives. One year and several more discussions later, these trends remain the same.

Here’s a recap of the most common mistakes:

Thinking that being good at what you do is the basis for a business. Some people quit, and some people turn to self employment for other reasons but many new or aspiring entrepreneurs think that their professional experience will translate to a thriving business. This is  the first big mistake alluded to by the world’s most recognizable small business guru, Michael Gerber in his classic book The E-Myth.  Second to that, being passionate and determined is a good start that will fuel you when you’re tempted to give up, but the bottom line is that you still need a foundation of marketing and commerce and a market that is looking for what you have to offer and will pay you enough for it.

Thinking you can do it all by yourself. Many of us go into business thinking we never want to have employees or have to manage anyone again. We plan on flying completely solo.  This is completely understandable – since years of bureaucracy and the ugly side of office politics is something we hope we never need to endure again. This might work for a while, but not for long – the reality of having to market yourself, do the work, fix the computer, do the bookkeeping and collecting the money… all comes into play. You quickly plateau in your income and energy. Entrepreneurs who achieve personal and financial freedom, don’t do it alone.

Thinking you can keep yourself on track. If you’re used to a structure and the workings of an organization it’s hard to cope with sudden freedom from routine and procedures. Beyond the ability to stay focused and disciplined, successful entrepreneurs build support systems around themselves to keep them accountable and on task.

Thinking you need to get people’s approval. There is a huge culture shock when you go from corporate life out on your own especially if you are working from home, by yourself. Suddenly that 20 or 30 year career as an expert can feel woefully inadequate when you’re responsible for selling yourself and running your business. There’s no one to tell you your idea is fabulous or completely sucks. There’s no one certifying you as an expert and telling you that you’re able to charge a certain amount. There is no one to approve your work before it goes to the client, and your name is on everything!  Many entrepreneurs allow this to limit their growth and feel the need to work their way up, not surprising really, when you look at our years of education and employment conditioning. However this leads to lack of boundaries with clients, and lower fees thanyou deserve, if you do not claim your expert status for yourself.

Not continuing to learn. When you’re an employee you can get by knowing just what is expected of you, or what you need to perform your job really well. The learning you need for your career is completely focused on your profession. Also, your company often pays for it. You just have to show up! In business you need to be a continuous learner – about your area of expertise, about aspects of business, about yourself. It’s very easy to get caught up working “in” your business instead of “on” your business. This is why many small business owners often fall into the isolation trap and just continue to do the same things year after year, never breaking out of their routines to learn something new. This leads to severely stunted and often under-earning businesses.

Not knowing what you really want. When you’ve spent years in a career and you now want to run your own business, it’s most common to create one around your career profession. Many new business owners slide into this without really taking the time to consider what they really want from their life, and how to design their business to get it. Often they realize later, that the business they built is not the one they really want. Wouldn’t it be easier to build a foundation based on a life plan, and  adjust it as you grow?

Waiting until it’s perfect. Corporate fugitives tend to suffer from this affliction more than any other type of business owner. They are less willing to take risks and fail, and often spend more time thinking about and crafting their perfect plan, than  getting started in the business of business. If this sounds like you, don’t wait until it’s perfect – waiting wastes time, and even makes you more fearful as your second thoughts nag at you. Spread your wings and fly – no one is there to push you forward, but you.

Want to use this article? You can as long as you include this footer: Sherri Garrity is the Chief Corporate Fugitive and creator of the Five Keys Success SystemTM for ex-corporate employees and aspiring entrepreneurs who want to break free from the confines of their corporate experience and live outside of the ordinary. The Corporate Fugitive system demystifies the business of setting up, managing, marketing and growing a successful and extraordinary business. Visit www.corporatefugitive.com for information and step-by-step resources to take you from overwhelmed employee to extraordinary entrepreneur.