The radical shift we all need to recognise as businesses doing good
We all need to shift our thinking when it comes to aligning price with value.
The problem coaches, consultants and service-based business owners (who are selling to ethical businesses or social enterprises) write to me about….Many of you write to me saying you’re trying to decide on a price that enables ethical brands or social enterprises to afford your services but you also need to pay yourself a wage, cover your business bills AND most importantly give back/make a donation to a charity or cause of your choice.
Here is where I see the problem is within this question:
You don’t believe ethical businesses/social enterprises can afford what you really need to charge
You don’t believe it’s right to charge ethical businesses / social enterprises your true value
You believe there is a lack of money available in the sector, that you chose as your niche
You set prices based on what you think people will pay, not what your services are worth and therefore only seek out and connect with those who will pay what you charge.
The truth is:
- Money is abundant and freely flowing in the world
- Like all types of businesses in the economy, there is a huge diversity of ethical businesses / social enterprises big and small, profitable and not, sustainable and struggling - they are not one homogeneous group and it’s quite condescending to assume they don’t have funds to invest in their business or purchase from others
- We attract what we choose to believe and see – if you believe ethical businesses can’t pay, you set your prices low and you attract business who can pay these prices - creating a self-fulfilling prophecy
- We are programmed to think “value for money” is “the best we can get for the lowest price” always driving to the bottom, rather than truly valuing the things we say we do and reflecting this in the way we charge and purchase things
- By having a lack mindset you reinforce the structures that maintain mass production and low pricing; the exact structures that maintain global poverty, hunger, resource depletion, pollution, violence against women, slave labour, human trafficking and conflict. All things I assume you actually want to tackle and resolve.
- If you choose to provide services to those businesses/organisations who genuinely can’t pay for your full price services, then you need to create a business model that enables you to do this first.
You cannot succeed as a business with ethical values and a vision for social change, by trying to fit in to the old ways of doing things and then wonder why nothing is changing (or why people won’t pay for your services).
You have to be the change.
You need to shift your understanding of the value you provide through your services AND think about the values you stand by as a brand - as these will also help you attract clients who align with these values too.
You don’t need to undervalue or under-price your services, you need to redefine what you’re really trying to create.
Here’s what I mean about the values you stand by as a brand:
What are your thoughts on always paying the living wage and fair & decent wages for the work and value created (e.g. fairtrade)? Then start to reflect this for yourself and recognise you deserve to be paid well for creating positive change in the world.
What are your thoughts on ensuring ethical supply chains? Then recognise all business should be reflecting this cost in their businesses and all prices should be higher to set a new standard.
What are your thoughts on (over-)consumption, disposable, one-time use products and waste? Then recognise fast, cheap production of disposable, single use anything isn’t the future we want to support and so we need to look to alternatives that currently have bigger cost implications.
What are your thoughts on social enterprises and ethical businesses making a profit? (Not for personal individual gain but for creating social and environmental change/good). This is a sticking point for many but I believe all businesses should have some operating profit and profits are good for business sustainability, and investing in innovation, adapting to change and creating more impact!
What are your thoughts on valuing our resources and protecting our habitats and commons (the ocean, the air we breathe etc)? Then running an ethical & sustainable business has additional costs to reflect our lived values in limiting our carbon footprint and impact on the planet.
Here’s what I suggest you do if you’re struggling to decide on your prices as a coach, consultant or service-based business selling to ethical businesses / social entrepreneurs:
Widen your horizons - look for examples of ethical businesses and social enterprises that challenge your perception of them being “strapped cash” and unable to invest in your services
Think about the real value you offer through your services to these organisations
Set your prices on the cost to your business to deliver them + the value + buffer/profit (book a call with me if you want some support in setting these)
If you really want to offer services to businesses who can’t afford what you need to charge to be a viable and sustainable business look at a business model that allows you to “give back” at a free or discounted rate, by charging higher prices to those who can afford your services. For example, a buy one give one model. But make sure you’re financially sustainable before giving away all your time for free (a very common trap I see new business owners falling in to).