Nine years ago, when I started my business, I was proud of my sales conversion rate – it was very close to 100%. Fantastic, right? Well it wasn’t until I was telling this to a business advisor, that he brought me back down to earth.
See, his reasoning was that if I were winning nearly every proposal I put out there, I was way too cheap. It turned out to be true – I asked others in similar sized businesses, and clients who had second or third proposals still on their desks, and it turns out I was a lot cheaper than all my competitors.
I edged my prices up, started winning less work, however started making better profits, and overall had bigger budgets to do better work.
Sure, some people have natural born sales in their blood, and a success rate in the 90% bracket is possible, however consider this; if you’re one of the cheapest, how are you earning enough to grow your business? You probably aren’t.
It costs money to expand your business, new employees and new equipment have a negative hit on your cash flow in the short term, and you need to be able to cover it.
Now, when I hear people saying they’re closing nearly every deal, I share the same valuable advice, and watch their reactions when they realize they’re short-changing themselves.
Go ahead – charge more. It means you’ll have more money to do better work, and you never know, one day you can afford to do less work yourself, and enjoy working on your business not in it.
Best of luck!
Miles BurkeAs Director of Bam Creative, and Chairperson of the Australian Web Industry Association, Miles spends his time managing his business or speaking about managing businesses. Recently awarded as one of the top Western Australian entrepreneurs under 40 years old, Miles can also be found writing at his blog.
