If you’ve hit over $1M in annual sales in your services business, but aren’t capturing enough cash flow, you may think more sales will fix the problem.

But often, when I start working with a new client, it turns out their sales problem's actually a pricing problem.

So, here’s the first part of a 3-part primer on my 3 Pillar Pricing Pframework.

This pframework will help you ensure your pricing is strategic and set your business up for plentiful profits and cash flow confidence.

And yes, I know “pframework” is misspelled, but I find that alliteration accelerates idea adoption (see what I did there? 😉)

Now, let’s dive in!

Pricing pillar #1: Price from your prospect’s perspective

Why should you care?

Pricing passively, based on gut instinct or competition puts you at risk of underpricing your offering.

This can lead to cash flow problems and a lack of resources.

Which makes it a lot harder to run your business and to live the life you deserve as a founder.

It also leads to unnecessary extra stress and burnout, and risks both your business and your livelihood.

Founders in this situation make several mistakes trying to solve these headaches.

They may discount their services.

Or offer to do extra, out-of-scope work for free.

Or invest extra resources to generate more sales.

These mistakes may make more sales.

But they also make more work and more stress.

And they don’t necessarily make the founder more money.

Fortunately, there’s a simple solution.

Price strategically, based on the potential value your services provide to your client.

This positions your offerings as specialized solutions worthy of premium pricing.

As a result, you maximize your revenue.

Real world example

I recently worked with a PR agency founder whose sales grew from $2.3M to $3M.

Unfortunately, their cash was still tight and none of the new sales had hit their pockets as profit.

This founder initially thought they just needed more sales.

Once we dug in, we discovered that they were underpricing their service.

They’d focused on getting new customers.

But, they weren’t considering whether these were the right customers who fully valued their services and would pay them appropriately.

My client saw the value in raising prices but was nervous about losing customers.

So, we came up with a strategy to help this founder raise their prices gradually.

We also analyzed their revenue mix. This helped them shift their focus to:

1. higher value offerings
2. customers with a greater ability and willingness to pay.

3 months later, the founder had:

1. less stress
2. more time to spend doing what they want
3. more money in their business.

Ask yourself

What could you unlock in your business if you used value-based pricing to profitably improve your sales?

What’s next?

Pricing from your prospect’s perspective is an important step to securing sales that give you cash flow confidence and more profits in your pocket.

But, it’s not the only factor you should consider.

In next the next two weeks, I’ll share the remaining two essential pillars to my 3 Pillar Pricing Pframework (there’s that alliteration again 🙂).

You won’t want to miss them.

That's all for this week.

See you next Saturday.

In the meantime, if you’re looking for more, there’s a couple ways I can help you:

1. Watch my free training on the 5 steps you'll need to take to get the financial results you want from your service business and feel less overwhelmed. Free training here.

2. I can help you get clear on where your business is today and create the strategic financial roadmap you'll need to discover your desired tomorrow. Book a free strategy session here.