90, actually 92 percent of women

in business are making less

than 100K a year in revenue.

That's our top line number.

Some of this is literally just due to

not knowing how to price their offers.

I would love to see more women making

more money, not for the sake of it,

but because it leads to more choice.

I would love you to grab a

piece of paper and a pen.

Yes, we're going to be

looking at some numbers.

I'm going to pull out my calculator,

which of course is pink and

do some numbers around this.

I have seen those posts on social

in social media groups, mainly in

Facebook, where they start with,

I'm not sure how to price this or

can I have some advice around price?

I just find those posts so

dangerous because you're not doing

the thinking needed to understand

what your pricing model is.

I want to make this episode

super easy for people.

I want us to stop

charging an hourly rate.

So I'm going to put that out

there very transparently.

I think what happens for women in

business is we charge an hourly

rate, then we cap ourselves and

we cannot escape the hourly rate.

Let's make an offer that is

not revolved around hours.

Hours is so old school

and I want to talk about.

Some different ideas as to how to price

your offers and what it looks like.

my main, idea for this

is tiered pricing model.

So if we say basic, standard and

premium, what does that actually mean?

But before we get into that, how much

money do you actually need to make?

Do you know, I was on a call with someone

recently and she was a startup and I was

doing my clarity call and she just needed

some help in understanding her numbers.

And when I asked her what she

needed to make, she said, well,

I need to replace my salary.

My awesome.

Okay.

So if you replace your salary, how much

money do you need to make above that?

And how many of the things that

you have, do you need to sell?

And she couldn't tell

me that is not uncommon.

Sometimes we just dive straight

in and we don't do the numbers.

Now I'm not.

A numbers girl.

So I'm coming at you with

very simple numbers today.

I'm not a bookkeeper.

I'm not an accountant.

Don't check those things off, but I

think it's important to start there.

We use the a hundred thousand a year

example, because I think that's easy.

So let's say you want revenue of

a hundred thousand dollars a year.

How many weeks do you want to work?

Let's say you want school holidays off.

So you want to work 40 weeks in a year.

That's what I do, 40 weeks in a year.

And then let's say you want to do a

couple of school drop offs, a couple

of pickups, etc, etc, which means you

don't want to work a 45 hour week.

You want to work a 30 hour week.

Right?

Do we all agree on that?

Grab a piece of paper.

Like I said, this one might

blow your brain a bit.

Anyway.

All right.

So we get the hundred thousand,

the calculator out, do a hundred

thousand and we divide that by the

number of weeks you want to work.

So 40 weeks.

So that gives us the

number 2, 500 a week.

that we need to make to hit 100, 000.

Now, then we say we only

want to work 30 hours.

So we divide 2, 500 by 30 and we get 83.

3333.

Let's call it 84 an hour.

Now, already my thinking is flawed.

Do you know why?

Because if you want to work 30

hours a week, that means you

would have to bill all 30 hours.

So let's go back to the

calculator and go 100, 000.

Divided by 40 weeks.

Same amount, 2, 500.

Now we're going to say, actually, we only

want to deliver 20 hours a week because

you need 10 hours to do all the other

things, marketing, socials, bookkeeping,

blah, blah, blah, blah, blah.

So we divide the number by 20.

And that gives us an

hourly rate of 125 an hour.

So if you're listening to this and

you're a woman in business and you're

like, I want to make 100, 000 a year.

I want to work 40 weeks in the year

because I have school children and

I want to deliver 20 hours a week.

Your hourly rate has to be $125 an hour.

I'm just going to let that sink in

because I know there are many, many of

you not charging that amount of money.

Now we don't charge hourly, but to

understand pricing and pricing structures

and pricing offers, we've got to know

how much money we need to make an hour,

So that's probably the only time that I

would say we use an hourly rate, right?

Okay.

I'll put the calculator down

and I'll get off my high horse.

I want to talk to you today

about a tiered pricing model.

So a tiered pricing model pretty

much involves offering multiple

services or versions, multiple

versions of a product or a service.

each at a different price level.

Each tier provides a different

set of features or benefits.

And what we know from human

psychology is that if there's three

options, one, two, and three, most

people will go for number two.

So make that your best dopper.

Why would you do it this way?

It's a great question.

Why, Emma?

Why?

Well, it attracts different customers,

different price tiers can attract a

broader range of clients or customers.

Some customers may want some

basic services at the lower end.

Some customers might want some kind

of standard offering, and others

are prepared to pay for premium

features, especially if it saves them

time or money, that's one reason.

The other reason is to increase revenue.

Right?

By offering higher priced tiers

with added value, businesses can

increase their overall revenue without

significantly increasing their costs.

Number three, so we've talked

about tiered pricing models.

Why use it?

How it fits into a good

business structure.

So let's say we've got

basic, standard and premium.

Please don't use those.

I hate those terms.

Think of something fun.

Don't go too clever because you

don't want to lose it, but you

don't want to lose the impact of it.

But basic standard premium is a bit meh.

Anyway, but a basic tier offers

the essential features and

services at the lowest price.

it is designed for cost

sensitive customers.

We know that mid tier or standard is what

I would call it includes more features.

or services at a moderate price,

mainly the most popular option, as I

said, and then a premium tier, which

is provides a more comprehensive

service or product or value.

And it targets customers

who want to pay a little bit

more, and get the extra value.

So instead of charging an hourly rate,

We move away from the hourly rate

and we move towards a tiered pricing.

model.

Now there are other ways to do

this by the way, rather than just

TID, but I'm just giving you a

basic example today because it's

a bit to wrap your head around.

Okay.

So let's try one.

So let's say a basic

model is 50 bucks a month.

I'm just going to go super low ball

so that you can see how this works.

50 bucks a month, which

includes five features.

The standard might be a hundred

bucks, but includes 10 features.

And the premium plan, Might be 200

bucks a month, but includes 20 features.

Yeah.

So one, we have a tiered model too.

We have what we call MRR,

monthly recurring revenue.

So, you know, in business,

those peaks and troughs of cash.

Yeah, we get rid of

those at the same time.

Isn't that cool?

Win win I say.

All right.

So actually I'm gonna now change those.

I'm gonna go basic, a hundred bucks

a month, standard 200 bucks a month,

and premium 400 bucks a month.

So write those down if you've got them.

Basic is 100 a month?

Standard is 200 a month,

and premium is $400 a month.

If they were going to choose basic,

which is a hundred bucks a month over the

course of the year, that would be $1,200.

You get me?

I just did a hundred times 12.

1200.

If they were gonna choose,

standard is 200 bucks a month.

So 2,400 a year, and if they're

gonna go premium, 400 bucks

a month is $4,800 a year.

So now we've got those.

They're the basis of what

we're going to discuss next.

How do we hit a hundred grand a year?

Great question.

So to hit a hundred grand a year for

your basic model, which is your hundred a

month, which is 1200 a year, you need 83.

33333 customers.

So let's say we need 84 customers.

If you were going to sell your standard,

which is your mid tier, which is the most

popular 2400 a year, you would need 41.

6666, so 42 clients across

the course of the year.

And if you're going to sell your premium

package of 48, you would need 20.

83, so 21 clients across

the course of the year.

Now some of those numbers feel scary, but

let's just break them down even further.

Let's break them down even further.

I need my calculator for this.

All right.

So let's say we need 84 clients

across the course of the year.

That means we need to be

onboarding seven clients a month.

Do you have the time to do that?

Cause that's a really

big part of this, right?

If we need 42 clients, you can

hear my tapping in the background.

Sorry about that.

you would need to onboard three

and a half clients a month.

Let's say four, because there's

no three and a half's and if you

needed 21 clients, you need 1.

75 clients a month, let's

say two clients a month.

So you need to decide what you can

actually offer and what's included

and then how you would deliver

it to the very high standard that

you, you've come to expect yourself

and that you would deliver on.

Now you can have a mix.

So you might say, yeah, I want a

couple of, um, 1200 bucks a year.

I want a couple of 2400 bucks a

year, and I want a couple of 48.

So then you just work out

the maths based on that.

When you work it out like

that, two clients a month.

Let's think about the sales on that, even

though this is not a sales episode, but,

two clients a month would mean that you

need to have four proposals out, which

means you have to be speaking to eight

people, which means you have to have 16

people that you've told your offer to.

So I just work backwards

from the end number.

Yeah.

I know that this works.

I have seen this implemented in

many, many of my clients businesses.

I have seen them go for, I'm going

to go enough for premium clients

only, or I'm going to go for basic

clients only or standard is my sweet

spot that's all up to you, I just

wanted to share about actually,

how do you work out the pricing?

And this is a very.

a basic way to work out pricing, right?

I don't want to overcomplicate things.

There are other things to consider,

but I didn't want to overcomplicate it

today, but I wanted to show you a tier

model so you could see what is possible.

Do you see what's possible?

Are you sitting there with your piece

of paper thinking, okay, well, I've

got a membership and it's 35 a year.

And so getting to 10, 000, that's a

lot of memberships I need to sell.

But it's good to know that, right?

Cause then you can

work towards something.

Then you can throw some

marketing money at it.

You can run some Facebook

ads if you want to.

There's a whole stack of things

that you can actually do.

This strategy, the tiered model,

depending on what's in it can

help your business to scale.

And, uh, episode ago, we talked about

growth and we talked about scale.

And so I really wanted to put this

episode in to make sure that you

could see that if you tear A certain

service or a certain product or

whatever, you could actually scale it.

I hope this has been helpful.

We would love to hear what you think

in the DMs or shoot me a comment.

I would love to know.

And if you've implemented something

like this, we'd love to hear as well.

Otherwise, see you next time.