It’s Time to Stop Undercharging Increase your revenue by

It’s Time to Stop Undercharging

Two methods to ensure you and your clients value your worth

by LuAnn Nigara

Are you working hard every day, month after month, and your checkbook does not reflect the long days you dedicate to your business?

If this sounds like you, pull up a chair.

There are several things that need to be examined to correct this including, among other things, your business systems, your productivity (where and how you truly spend your time), your expenses, and your gross profit margins. All of these categories need to be assessed and addressed, however, today we are going to tackle your gross profit margins.

Consistent undercharging is a huge factor in not having healthy gross profit margins. Make no mistake about it, healthy profit margins are critical to running profitably. In order to pay yourself and your team what you are worth you must be profitable.

The Necessary Margin

This issue is particularly rampant in the window treatment industry. In conversations at nearly every industry event and in conversations on- and off-air with podcast guests, I am often surprised at the beliefs that business owners hold when it comes to gross profit margins.

You can and should be earning 50- to 58 percent gross margins for almost everything you sell. And, I know from countless conversations over the last 30+ years, dozens of you reading this just said out loud, to an empty room, “She is nuts.” But I’m not. Because this is our average gross profit margin at Window Works—since 1982. No exaggeration.

This consistent level of gross profit margin is not only possible, it is necessary in order to maintain a healthy business.

Let Go of Self-Imposed Limitations

In order to be able to set and achieve healthy gross profit margins, one of the first things to do is to analyze any limiting mindset beliefs that might be holding us hostage. Limiting beliefs play like a bad record in our mind, creating doubt and fear. This could including the following:

• Why would anyone buy from me? • “Money doesn’t grow on trees.” • I need to make this sale to cover payroll, or the rent, etc. • What I do isn’t particularly skillful or valuable. • Do I deserve success?

What we believe about ourselves, our clients, and our business becomes the truth simply because what we believe, in large part, will actually dictate how we act. When we believe we are deserving and capable of success and when we believe what we offer is valued by our clients, we instinctively behave in ways that support these beliefs. These positive actions ultimately create and perpetuate successful outcomes.

For example, a confident salesperson is eager to go to each appointment, always grateful for the next opportunity to earn a new client. A business owner that really knows the value she brings to her customers looks for new ways to market her company, to make sure everyone she meets knows about her company, her team, and her services.

However, the opposite is also true. When we doubt ourselves, we hesitate. When we aren’t sure of our expertise, we procrastinate. When we don’t value our worth, we undercharge. Then, the limiting beliefs trickle down to other areas, too. We delay in setting up our website, we spin our wheels in executing marketing initiatives, and we tell ourselves there is nothing we can do to change things. We blame it on the economy, our region, our location, changes in the industry, etc.

So how do we hit the erase button and create new, affirming beliefs that invite success and prosperity to our business and our lives?

Work the Big Picture and the Little Picture Together

Examine both a macro view and a micro view of your industry. Then go about becoming an expert on both. In becoming an expert you will gain confidence and you will easily begin to understand how you are truly valuable to your clients.

Example of the macro view: As a window coverings specialist, your goal could be to learn every product with a better-than-average proficiency. Shutters, draperies, the various styles of soft shades, the various brands and styles of woven shades, hard wire and battery motorization, the list goes on.

To be sure it happens, plan it out over a year. Assign a product category to each month and block three hours per week in each month to that category. Read industry magazines and websites, read vendor websites, take webinars, take classes, attend industry shows and conventions, go to regional industry meetings, watch YouTube videos—whatever it takes to know that product category inside and out. By the end of the year you will have acquired expert status in 12 product categories. By increasing your competence month after month, you will feel your confidence in yourself and your company grow.

Example of the micro view: Select a narrow niche product or service to become known for, above all others, in your area. This could be a particular product such as skylight applications, or motorization, or innovative materials, etc. In addition to the 12 hours a month devoted to a certain product, add another half hour each week over several months in this one niche area.

Your goal is to be the undisputable expert in something. Keep in mind, your niche area could also be a service. For instance, at Window Works we make it our business to provide excellent, unequaled customer service. We intentionally work on this and deliver this to our clientele. This is something we work on every day, every week, and are known for.

Why This Approach Works

The point of the macro view is to create confidence in yourself. By intentionally addressing your business and industry with a higher level of knowledge, you stand in your space as an expert and you project this confidence to your clients and potential clients.

The point of the micro view is to create confidence in you. By intentionally becoming the go to expert in a narrow niche your client community learns to look to you for this product or service. You become known for this.

In the interior design industry, an example of this could be the following: You are an interior designer who is clearly capable and comfortable with full-service design (macro view) however you develop and nurture your skill and reputation for media room design (micro view).

You learn about acoustic wall panels, you learn about whole-house motorization integration, you learn the ideal dimensions for movie screens vs. seating proximity, you understand lighting and how to easily integrate the latest tech offerings, etc. You become known as the media room expert. Therefore, you can charge accordingly because you are valuable, knowledgeable, and sought after.

These two strategies combined create one very tangible result—you can say goodbye to undercharging for your products and services forever. You can confidently charge and get your fair- market profit margins on every project.

Make Time for Training

Make no mistake though, it takes effort and intention. You can spend 30+ years becoming an expert or you can consciously devote the weekly and monthly time from the beginning to gain the expert-level information sooner. By truly having the expertise it instills confidence which enables you to charge confidently.

Maybe you can fake it a few times, with a few clients, but you will be found out. The glue for this is your reputation in the greater community. The strategy is to be and to provide expert product knowledge and service so you can achieve your goal of asking and earning your worth. Pretending cannot result in sustainable high gross profit margins.

I realize not every client and every business model supports and demands this higher level of service and higher level of pricing. You have to know your lane. However, when your target client is the luxury market, understand very clearly, most consumers in this demographic would prefer to have a high-level customer experience at a more expensive price point than save a percentage and give up service and expertise. Catering to the luxury-driven market also enables you to engage in less projects at higher earnings, contributing to higher gross profit margins as well. But that’s a discussion for another day!

Think about your mindset. Become the expert and set your sights on higher gross profit margins. It can be done and you can be one to do it. z LuAnn Nigara is an award-winning window treatment specialist and together with her husband and cousin she owns Window Works, in Livingston, NJ, which provides custom window treatments and awnings to both retail and trade clientele. Her highly successful podcast “A Well-Designed Business” debuted in February 2016 and she has since recorded more than 200 episodes. windowworks-nj.com/podcasts Facebook: windowworksnj Twitter: WindowWorks_NJ Instagram: windowworks Houzz: window-works

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