As I write this I'm on a plane heading home to Orlando from a long weekend up in Calgary, Canada. I spent the last 2 days working with 40 Crossfit gym owners and coaches from across the US & Canada. The format for the weekend's training was pretty much an "around the world" overview of business systems.

On the second half of day 1 we dug into a session blocked for sales. After sharing our AUTO-CLOSER® 7-step sales system with the group, we dove into a review of packaging and pricing.

I shared the current "control" being used by all our top clients (see the article titled NEW: Advanced Strategies For Closing More Sales for a full review of this). I then asked everyone to share their current average rates for group training. The average was around $150/month. I told them they needed to double that to at least $300 ... . and the room went dead silent.

"But we can't charge that much for our services" someone finally spoke up. I asked who else felt that way. Everyone did. "Ok, tell me all the reasons why you can't raise your prices up to a reasonable level. Go ahead, we'll make a list on the whiteboard right now".

I asked someone to help write down each of the answers from the room, and here were some of the top reasons people 'believed' they couldn't start charging at least $300/month for their services (there were about 12 in total, but most all of them variations on these 3):

1. My clients are like friends. Many of them have been paying that rate for several years, and if I raise the rates they'll all talk amongst each other and hate me.
2. My competition charges the same rate I do, I can't double my rates or everyone will go work with my competitor down the road.
3. My clients can't afford that rate. They'll quit and my business will go under.

After the room had finished "vomiting" all the reasons why they 'believed' they were not worth at least $300 bucks a month, I said let's break these down one-by-one and talk about them. Because obviously we have a MAJOR belief system problem here.

1. Are you in business to make friends? I told them that certainly they should focus on their professionalism, over-delivering, and serving the heck out of their clients and customers. I believe, practice, and preach all those things. But let's get one thing straight ... you're NOT in business to make friends. You are in business to make a profit. If you don't make a profit, there will be no business. That is called a charity. I donate quite a bit to charity. But you know what? I'm able to do that because our business makes a profit! And let's take it one step further, if your clients truly are your friends, do you think they want to see you literally killing yourself, your health going to sh*t, and you not able to draw a paycheck to provide for yourself and your family? I should hope not. You don't need those kinda friends in your life.

2. So what if your competition charges X? Do you really want to compete on "price"? That's the McDonalds' and Burger King game, each competing with who can offer the bigger list of 99 cent value items. YOU are in the service business. Don't compete on PRICE, compete on VALUE and RESULTS. When you focus on value and results, ESPECIALLY when it comes to professional services ... price becomes very elastic. Think about it, if you're going to get a nose job ... do you hire the plastic surgeon that is the 'cheapest in town' or do you want the guy that does the best job delivering good results? See, when it comes to professional services price is kinda irrelevant. You pay for the best guy that will deliver results.

3. So you think your clients can't afford $300 a month, they'll all quit, and your business will go under? Ok, let's review. Do your clients have cable TV, a cell phone, and go out to dinner at least 1x/month? Now look around your parking lot, are you clients driving nice automobiles, luxury sedans, and SUV's? If so ... trust me, they have an extra $150/month to invest in their health and your services if it's truly important to them. And do you realize that by doubling your rates ... you could effectively lose 50% of your client base and your business would still be bringing in the same amount of revenue each month ... but now with half the work? All of a sudden it gets a whole lot more fun to work IN your business if you have to, and when you're ready to hire more staff you've now got the margin you need to hire and pay good trainers to work for you.


The problem is your head is not thinking straight and you have to grow in your belief system.

Now, I could stop there ... but let me further drive this point home and hopefully motivate you to raise prices in your business.

After this group discussion I asked the room if they had run any financial projections on break-even points and when they would reach profitability in their business. Nobody really knew the answer, which shows you nobody had really thought this whole pricing thing through before. Nor did they have a defined target to hit for growth. They were all, like most people, just kinda going along month-to-month in the grey area of business and life.

But a few had answered on their pre-weekend survey's that they were "just" barely starting to see things in the black by $1-2K each month. Not only that, but they were all working 60 hours a week, single-handedly 'willing' the business to become successful ... at the expense of their own health, fitness, sanity, and low (sometimes non-existent) salaries.

I shared with them that if they did NOT increase their rates, their business WOULD go under by either 1) running out of money since they were just barely squeaking by anyway 2) their health and stress issues were going to finally catch up with them in the form of burnout or a real health scare ... that may turn out to be more than just a 'scare'.

Someone in the room then actually then asked me the question "at what point should I be able to draw a salary from my business?"

Are you kidding me? Sweat equity is for slaves. If you're willing to assume all the risk, take on all the hard work, and tremendous responsibility of owning your own business ... . when others are unwilling to do so ... you should be drawing a salary in your business from day one.

And if you're NOT willing to make the numbers work to do that, go get a job. It will be easier and less stressful for you, and I mean that. I am not here to put anyone down, but sincerely, it takes a strong belief in yourself to be a successful entrepreneur. Owning a business is not for you if you've got a victim mentality and are unwilling to do the work required to change it. To be successful as business owner you must be willing and able to cultivate a strong belief in yourself, the value of your services, and what your time and energy is worth. Then don't settle for anything less. Those are the big keys to moving up the success ladder.

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Clarity->Focus->Results

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F.E.A.R.

(Believe In) Your Value