How to Raise Your Prices without Losing Income

Summary

Podcast Summary: The Kate Show
Episode: How to Raise Your Prices without Losing Income
Host: Kate (Socialite Agency)
Guest: Jennifer Koch (Next Wave Business Coaching)
Release Date: July 8, 2024

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Main Theme & Purpose

This episode of The Kate Show aims to demystify the challenge of raising your prices as a service-based creative entrepreneur—especially for interior designers, home stagers, professional organizers, and window treatment specialists. Kate interviews veteran business coach Jennifer Koch, who shares practical, mindset-driven strategies for adjusting your pricing, securing healthy profit margins, and establishing long-term sustainability without fearing client loss or feeling stressed.

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Key Discussion Points & Insights

1. Jennifer Koch’s Entrepreneurial Origin Story

• Jennifer’s Leap to Entrepreneurship
  • Left corporate sales/marketing at Kraft due to constant relocations and desire for family stability ([06:29])
  • Bought a Cookies by Design franchise, despite not being a baker, seeing a niche market ([06:29] – [08:50])
  • Opened doors two days after giving birth; “My maternity leave was in the back of a cookie store.” ([08:50])
  • Early period was chaotic and emotional—Jennifer openly admits “I fell apart,” but her “why” (family, freedom) pulled her through ([09:11])
• Takeaway: Entrepreneurship often starts naively; resilience relies on a strong, personal “why.”

2. The Emotional Challenge of Raising Prices

• The Fear Factor

  • Anxiety over losing clients or being seen as greedy is common ([12:19])
  • “If you don’t take a price increase for five years and all of a sudden you jack it up five times, you probably are going to have some pushback.” ([12:19])
  • Jennifer established an annual practice of reviewing and increasing prices each January to minimize resistance and stress ([12:19] – [13:53])

• Surprisingly Minimal Pushback

  • In 20 years, Jennifer cannot recall any truly uncomfortable price increase conversation ([13:53])
  • Memorable moment: “Honestly, in the 20 years I owned that business, I can’t recall one conversation that was so uncomfortable about my price increases.” (Jennifer, [13:53])

3. Knowing (and Charging) Your Worth

• On Women’s Reluctance to Charge Appropriately

  • “As women, we’re natural nurturers, natural givers, natural fixers, and we have a hard time charging—especially in the service-based industry. But you give money to good people, they’re going to go on to do great things.” ([15:00])
  • Addressing the common belief that charging more is ‘greedy’; Jennifer asserts it is “okay to be profitable, it’s okay to make a good living.” ([16:11])

• Profit Margins Demystified

  • Aim for at least a 40% gross profit margin; 50% is ideal for interior design ([17:09])
  • Emphasizes replacing yourself in pricing: “Take yourself out of the equation. What would you charge if you had to hire somebody to do the work you’re doing?” ([18:11])
  • Don’t forget to factor in ALL your time—not just the visible labor ([17:09] – [19:00])
  • Quote: “You should be charging so that you’re hitting at least a 40% profit margin.” (Jennifer Koch, [18:29])

4. Handling Business Valuation & Exit

• Business Valuation Is Emotional & Complex
  • Involve accountants, bankers, and legal counsel; don’t self-assess blindly ([20:41])
  • Prepare for exit while you still enjoy running your business—not when you’re burned out ([20:41])
  • Selling her business took about a year for the transaction, but 3 years from initial approach to full handover ([22:40] – [24:00])
  • Keep the exit flexible and plan ahead.

5. Practical First Steps for Undercharging Business Owners

• Step One:
  • Pause and scrutinize your project pricing down to time spent ([27:16])
  • Begin tracking your actual hours to reveal underestimation ([27:16])
  • Normalize the learning curve—nearly all business owners start out underpricing ([27:16] – [28:37])
  • “Try to bring home a paycheck once a month...even if it’s just $500, because it makes you feel good.” (Jennifer Koch, [28:13])

6. How to Actually Raise Prices With Clients

• Use Your Numbers to Tell the Story
  • Check if gross profit margins are healthy; if not, find out why before raising rates ([29:27])
  • Start with new clients; then incrementally increase for current clients
  • Key Strategy: Position yourself as an expert with a defined niche to command higher rates, attract referrals, and simplify marketing ([29:27], [31:13])
  • “When you become the expert, people start to refer business to you.” (Jennifer Koch, [30:44])

7. The Power — and Fear — of Niching Down

• Overcoming Lies & Imposter Syndrome

  • Generalists get forgotten; specialists are remembered ([33:26])
  • Imposter syndrome often hinders people from claiming expertise
  • Focusing your brand or niche does NOT mean you cannot take other types of work ([32:26] – [33:26])
  • Kate: “Say you’re a specialist and you might just rise to the occasion and become a specialist and you might surprise yourself.” ([33:53])

• Methods to Find Your Niche

  • Analyze your happiest clients, favorite project types, or recurring work ([35:14])
  • Jennifer’s three-part process:
    1. Ideal client persona
    2. Industry/project specialty
    3. Thought leadership positioning ([36:13])

• Thought Leadership

  • Use your unique viewpoint or expertise (e.g., sustainability) to stand out ([37:08])
  • “There’s only one you. You have your own unique perspective, your own history, and people need you.” ([37:34])
  • Test niche or message for 90 days before shifting ([40:49])

8. Confidence, Referrals, and Sustainable Growth

• Visibility and Profitability Boost Confidence

  • “When you feel confident in your pricing and you know your profit margin is good, that really raises your confidence. And that comes across when you’re presenting your bid to your client.” ([42:43])

• Referrals & The “Face Test”

  • Your niche should make it easy for others to picture and refer you
  • “Does your business pass the face test?”—if no one pops into their mind when you describe what you do, your message is too broad ([45:38])
  • Example: “I help first-time homebuyers”—instantly makes you referable compared to “I sell real estate.” ([45:46])

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Notable Quotes & Memorable Moments

• “My maternity leave was in the back of a cookie store.”
  — Jennifer Koch, [08:50]

• “You give money to good people, they’re going to go on to do great things. ... It’s okay to be profitable, it’s okay to make a good living.”
  — Jennifer Koch, [16:11]

• “If you don’t take a price increase for five years and all of a sudden you jack it up five times, you probably are going to have some pushback.”
  — Jennifer Koch, [12:19]

• “Take yourself out of the equation. What would you charge if you had to hire somebody to do the work you’re doing?”
  — Jennifer Koch, [18:11]

• “Try to bring home a paycheck once a month...even if it’s just $500, because it makes you feel good.”
  — Jennifer Koch, [28:13]

• “When you become the expert, people start to refer business to you.”
  — Jennifer Koch, [30:44]

• “There’s only one you...people need you because there are other people out there that want to work with somebody like you.”
  — Jennifer Koch, [37:34]

• “Does your business pass the face test?”
  — Jennifer Koch, [45:38]

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Timestamps for Key Segments

• Jennifer’s business origin/birth story: [06:29]–[11:10]
• The mindset of pricing and weathering recessions: [12:19]–[13:53]
• Profit margin benchmarks explained: [17:09]
• How to price your own labor: [18:11]
• Valuing and selling a business: [20:41]–[24:00]
• First step for undercharging entrepreneurs: [27:16]
• How to raise prices with clients: [29:27]
• Benefits and fears of niching down: [31:13]–[33:53]
• Jennifer’s three-part framework for niching: [36:13]
• Building confidence for pricing, referrals, and marketing: [42:43]–[45:38]

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Resources & Recommendations

• Jennifer’s Free Guide on Referrals:
  Get the guide at Next Wave Business Coaching (pop-up or LinkedIn DM @Jennifer Owenscoke)—“Three Steps to Getting Referrals” ([44:36])
• Contact Jennifer: Primarily by LinkedIn or website

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Conclusion

Jennifer Koch and Kate candidly tackle the practicalities, emotions, and strategies behind raising your prices as a creative service business owner. This episode is packed with no-nonsense advice and approachable steps for tracking your numbers, setting profitable rates, and building a business that not only supports your own life but also becomes transferable value down the line. The recurring wisdom: Know your numbers, embrace your niche, communicate your value, and don’t let fear or underconfidence set your rates.

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“If you believe in what you do, then it really doesn’t matter what happens, you’re going to keep pushing through it.”
— Kate, [10:36]

Transcript

[Kate]

Foreign.

Hey guys, welcome back to the Kate Show. Today I am interviewing Jennifer Koch, who.

Is from Next Wave Business Coaching and she has been a really great resource.

When it comes to all things niching down and pricing. As a creative entrepreneur, you likely struggle.

With your pricing because it's subjective.

Like, how can you put a price on a well organized home or a beautifully designed space? Well, you have to when it's your business.

So if you find yourself wrestling with.

These questions of how much should you charge, what should your profit margin be, you're going to get those questions answered today.

Because you know, while things like interior design or organizing or staging might feel.

Like second nature to you, you know that other people struggle deeply to accomplish any of those things and therefore they do have deep intrinsic value. These people, your clients, feel that your services are highly valuable and you have to translate that into your pricing model.

But what if you've been undercharging for.

Years and you finally realize that it's time to raise your rates? What should your new rate be and why? And what profit margin should you aim to have? Like I said, Jennifer answers these questions today and she does it in such.

A refreshingly simple way that I may.

Have to go back and listen to her words of advice again. It was that good.

So today, like I said, I have Jennifer Koch. She is shedding light on pricing and.

I want to tell you just a little bit about her. So veteran business coach Jennifer Koch started her first business two days before giving birth to her second child. She turned it around in the middle.

Of a recession and then she sold.

The company for a profit after growing it to a national brand. She makes her experience an asset for owners looking for the Next Wave in their business journey, hence her business name, Next Wave Business Coaching.

She is the founder of Next Wave.

Business Coaching where she's an advocate for small businesses. She helps small business owners who are in growth mode with strategy, clarity and mindset to double digit their growth and build a sustainable business. In other words, guys, she totally speaks our language. Jennifer owned her own service based business for over 20 years, developed a national brand and knows what it takes to run a fast paced, successful small business.

While also raising a family.

She now shares her expertise with multiple entrepreneurs across the country.

Guys, I'm pretty excited for you to.

Hear this interview, so let's get right into it.

Meet Jennifer this episode of the Kate show is brought to you by Honeybook. I love using Honeybook for my business because it helps create a streamlined workflow when people decide they want to work with Me because you know, there's one thing to, to do the right marketing.

To get the client, there's quite another.

To impress them all the way through the end of the project. And with Honeybook, my clients are able to review and sign the proposal, make their payment, and then be told what to do next, all in one fell swoop. I've set up automations that remind them when they need to send me certain assets so that their website project can go off without a hitch. And if you've ever worked with us, you know, know that Honeybook kept you on track. It kept us on track and it was really easy to use. If you're interested in using Honeybook for your business, go to honeybook.com and use the code socialite at checkout for 50%.

Off your first year.

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Hey, guys, I'm here with Jennifer and we are about to hear all about her origin story as well as get some of her advice on how to raise prices without hurting our businesses and without causing ourselves a lot of stress in the meantime. So, Jennifer, welcome to the Kate Show.

[Jennifer Koch]

Thanks, Kate. I'm happy to be here.

[Kate]

Well, I'm glad that we could make it work. You came highly rated and highly well reviewed by a close friend of mine, my cpa, Jackie Coder. So shout out to her and I am glad that we connected because you have a story to tell and you also have a podcast. So I want to give a shout out to that as well, where you tell other people's entrepreneurial stories, which I think is amazing. So I would love to start with your story because everyone already heard me read your bio in which you stated that you started a business right about the same time you were having a baby. So tell me what on earth was so important that you did that while being super duper pregnant? Because so many of us, including myself, know what it feels like to be about to give birth and it's not really a great feeling. But you, you launched a business during that time. So tell me.

[Jennifer Koch]

Well, I don't think it was because I did it because it was super duper important. I think I did it out of being just completely naive and clueless on what it was going to take to start a business. So I was working for Kraft Foods in sales marketing. Loved my corporate job. But back then, in order for me to keep promoting and working up the corporate ladder, if you will, we had to keep relocating. And my husband and I, we had moved three times, had our first baby, and got to a point where she was about 3 years old at the time. And we didn't want to keep moving. It wasn't fair to his career. We didn't want to do that to our children. So we decided to move back from Chicago to Grand Rapids, Michigan, which is where I am today, to be closer to family. And I always had this desire to be an entrepreneur. I think it was just in me from a little girl. And we decided we were going to do that. Well, I found a business that was actually a franchise that I decided to buy into called Cookies by Design. It was really a gifting company. They were these cookies that were on sticks and they were in a bouquet and they would be delivered, you know, Corporate gifts and things like that. The funny part about my story, too, is I didn't even really like to bake. It wasn't like I was at home baking and I wanted to own a bakery. I saw the marketing, I saw the niche in the business, and I thought, oh, we can do this. So I leave my corporate job, we sign on the dotted line to open up a location in Grand Rapids, Michigan, with cookies by design. We move back to Michigan, and I find out I'm pregnant with my second daughter. Well, I was completely clueless on what it takes to open up a brick and mortar bakery. All the health code, the plumbing that had to go into it, you know, all the things. And so by the time we opened our doors, she arrived two days later. She arrived 21 days early. You know, she thought, probably thought to herself, I've got to get out of this crazy woman. Who is this woman that's carrying me? Thankfully, everybody was healthy. We survived. But my husband literally picked me up from the hospital with cookie bouquets in the back of the car that we had to go and deliver on our way home. And the next morning, I had to get up and go into work because I had two new employees that were starting, brought my baby with me, and I never had a maternity leave. My maternity leave was in the back of a cookie store.

[Kate]

Oh, my goodness. Talk about baptism by fire. Like, wow. Okay, so let's stop and break this.

Down for a second here.

So brand new baby, brand new business. You are fully postpartum. How did you not fall apart? Or did you fall apart? Because that's just relatable.

[Jennifer Koch]

Absolutely. I fell apart, you know, there at the time, I think you're just in it. And it was like, okay, I don't have a choice. I just, I have a loan. We have now have a lease that we signed on. We're in it. We got to make this work. And it was probably about maybe six weeks into it. I'm exhausted. My body hasn't probably healed properly. I'm feeling all the guilt of I'm not home with my newborn, I'm not home with my 3 year old. This is insanity. I do remember curling up in a ball and just crying in my bathroom because it was the only place I could find that was private without ever, you know, other people coming in. And I really just, you know, I thought, what the heck did I do? But then I had to go back to my why I left a really good job because I wanted freedom, I wanted flexibility. I wanted to be there for my children. I did not want to, you know, have to remove them all the time. And you know, there's a lot of women out there that are working wonderful corporate jobs and I think that's amazing. But it wasn't for me.

[Kate]

Yeah.

[Jennifer Koch]

So I had to go back to my why and I had to remember that, you know, the reason I was doing this and that's honestly what kept me going. And of course, the support of my family and friends.

[Kate]

Yeah, that why is so powerful. And I think that's also what gets people through things like the recession of 2008 or even 2020. If you believe in what you do, then it really doesn't matter what happens, you're going to keep pushing through it. And of course, this perfectly illustrates the concept that running a business is probably one of the hardest things we'll ever do. But we do it because we have that passion. And some people have told me they wanted to start a business because they wanted to do something easier to. Which I like, tried not to giggle because I'm like, you have no idea.

[Jennifer Koch]

Yeah, easier is probably not the right word. Different. And yes, it is the hardest journey I've ever been on. I've been on this journey for 25 years now. But it's also the most rewarding. I was able to make it a part time business once, you know, for me, once I got my, you know, the business to a place a little bit more sustainability, I was able to have that freedom and flexibility. It just took a few years.

[Kate]

Yeah, that's just it. You have to stick with it. And there's so many businesses that fail within the first two years. So the fact that you were able to make it as long as you did is incredible, especially considering a rough start. So as you went through that business and then you had other businesses kind of bringing it to today's topic of pricing and having to raise prices at given points in a business, whether it's service based or product based. How did you navigate that? Because it can be quite emotional and it can be difficult to think, okay, if I raise prices, am I going to lose clients or customers and what's going to happen? Am I going to get pushback? So how did you go through that? What did it look like?

[Jennifer Koch]

Well, you know, I was in that business for over 20 years and I weathered a recession. I built a brand new product line called Cupcake by Design. It was a very high end luxury product, very similar to interior designers and home stagers and home professionals. You know, it wasn't a need, it wasn't a necessity. And so when you start to weather all those different outside circumstances that are outside of our control, it can be very challenging. And there is a lot of fear wrapped into, if I raise my prices, will people come back? Will I lose a good client? Will I be competitive? But you have to do it strategically. You know, if you don't take a price increase for five years and all of a sudden you jack it up five times, you probably are going to have some pushback. But if you make it part of your annual process to review your prices, review your costs, review labor, all of those factors that are coming into your service or your product, and analyze it yearly, you can take smart price increases. And I will tell you, I made this a practice. It was a January practice. I don't know why it was January. Probably because it just, you know, that's the time of year where we always feel we're going to do all those kind of things. And it was very strategic how we did it every year. But every year, I did sweat it out every year I did have that moment of, oh, you know, what are people going to think? And Honestly, in the 20 years I own that business, I can't even recall one conversation that was so uncomfortable about.

[Kate]

My price increases, which is so interesting, because nobody actually thinks about our businesses as much as.

[Jennifer Koch]

Exactly.

[Kate]

Nobody's that critical, especially with cookies. I mean, who doesn't love cookies? So what else did you do? So you owned that business for 20 years, but you've done other things as well on your journey to becoming a business coach. So what did that look like?

[Jennifer Koch]

You know, what that looked like was when you own a business for 20 years, people naturally come to you. Anyway, I had a heart for mentoring other businesses. I also did launch a children's consignment sale business. I had that for five years. You know, I just always was kind of finding, I guess, the next trend or what was exciting, and, you know, launched a business around that and then sold all of those in the fall of 18. So in the fall of 2018, I sold my cookie and cupcake business after I owned it for 20 years, mentored my manager, which there was nothing that felt better than mentoring somebody who could take on your baby because it's really a baby that you raised to adulthood. You know, that just felt so good for both parties. And so then I ended up kind of stepping back and trying to decide what I wanted to do next. And then the pandemic happened, and I was watching what was unfolding with our local businesses, with our service based businesses. And I thought, you know what, I have a skill set that can help these people. If nothing else, give them hope. Because I really had weathered the 0809 recession. So that's when I decided to get into business coaching. I'm really more a business consultant because I'm really teaching my strategies, proven methods to help you double digigit growth. And I'm really focused on profit and revenue because I believe we are in business to make money. And as women, we have such hearts. We're natural nurturers, we're natural givers, we're natural fixers and we have a hard time charging, especially in the service based industry. But I believe you give money to good people, they're going to go on to do great things. You know, it's okay to charge, it's okay to be profitable, it's okay to make a good living because you can go on and then give wherever you want to give.

[Kate]

Yes, yes, I, I agree with that. 100 because a lot of us, and I used to feel this way too well, if I charge, quote unquote, too much, am I just being greedy? Well, I'm sure there, there comes a point where greed would come into play. But some of it is, like you said, knowing your numbers, figuring out what your profit margin should be, which I have a question for you on that as well because that's a slippery one. But then also realizing that the money that you bring in, it's a tool like anything else and you can go use it for good. You can go use. And also like feeding your own family is considered good too. Like it is okay to do that. So when interior designers and professional organizers and stagers are like, all right, yeah. Pricing a service based business is difficult because it's very subjective. It's valuable. Yes. And there's often physical labor involved. But like, how do they figure out what their profit margin should be? Is there some sort of formula that they use or what?

[Jennifer Koch]

So there's always benchmarks in every industry of what your profit margins should be based on your revenue. So for instance, we want to start by pricing our products and focusing on the gross profit margin, which means you take what you sell it for, subtract what it costs you to provide that service or product, and that's what's left is your, is your gross profit margin. And then after that is all the expenses to run the business. You know, the utilities, the marketing, your cell phone, all those details and expenses that it takes to run a business. So each industry you can find those Benchmarks. And you know, a good question would be to ask your cpa, what is a good benchmark for my gross profit margin? I like to see businesses 40% as the bare minimum, especially interior designers. 40 to 50% gross profit margin. But what's happening is we fail to account our own time.

[Kate]

Yes. Oh, yes.

[Jennifer Koch]

And it's back to, I started this business because I want to help. I have a passion for it. This doesn't feel like work. Trust me, I've heard all those things and I'm like, that's great, but we still should get paid for it. So I always encourage you to take yourself out of the equation. What would you charge if you had to hire somebody to do the work you're doing? So not only should you be factoring in the cost of the supplies needed, you know, the materials, whatever the project is, but you should be factoring in the cost it takes to do the research before the client, with the client, after the client. There's a lot of, you know, we know, moving parts. And if you had to pay somebody to do that, make sure you're factoring that in. And then you should be charging so that you're hitting at least 40% profit margin.

[Kate]

That really simplified everything. Wow, okay. I've gotta like make that a quote and just publish that out there for people to see and tag you in it. Because that is what we need in this industry, not just the esoteric ideas like, okay, here's how you do it. You are replacing yourself. So I'm going to repeat this for the people in the background. You're replacing yourself. How much does it cost to get a new you? So basically what you're saying is that we should look at how much it would cost to replace ourselves in the business, which is nice because that really takes the emotion out of it and allows us to just focus on the numbers. So how would we go about figuring that out? Is it as simple as like literally googling how much does it cost to hire a such and such and then kind of incorporate that number into our, our calculations?

[Jennifer Koch]

Yes. I mean, you know, typically there's kind of an industry standard, what people, what you have to pay someone to get a qualified employee to take your spot. They might not be as high level as you are. So we just want to use a standard rate. If someone was to come in and take our position in billing out, you know, in quoting and bidding a project, what would we have to pay them to manage all that? So I would, you know, usually, you know, right. The going rate. Right. Now is a minimum $20 an hour, but you really have to do some homework, depending on where you live, depending on your industry and kind of what you're seeing out there to hire good help.

[Kate]

Yes, yes. Well, that really does help. And on that same topic of making the calculations, determining what it's worth, when you sold your business after running it for 20 some years, how did you determine the valuation?

[Jennifer Koch]

You know, valuating a business is really tricky because there's so much emotion wrapped into it. Of course, it's your baby, just like your home. Like, if I'm going to tell you my home is worth a heck of a lot more than my neighbor thinks it's worth, same with your business. And I would highly, highly recommend that you do not tackle that alone because you, by doing it yourself, you could leave a lot of money on the table. So when it comes to getting ready to sell your business, I have a couple things that I've learned from doing the process. And what I always share is, is first of all, think about your exit way before you even want to exit. Think about your exit when you still love your business every day and couldn't imagine doing anything different because you don't want to get into a position where you're tired, you're burned out, maybe financially things aren't going great and you're just done, because then that's a fire sale. And you're really going to end up not getting the amount of money that you could if you had a plan in place. Just because you have a plan in place doesn't mean you have to execute it. And then this is where a CPA comes in to really help you do evaluation on your business. You can hire people to do evaluation. I will tell you they're going to charge you $5,000 or more. So it's usually not worth it. But between my banker, my cpa, myself, looking at our financials, we were able to come up with a number that we felt not only was really good for me, but also made sense for the buyer because you know, you've got to find someone who's willing to buy it and has to be able to pay it off in a certain amount of time. So I would say try not to tackle that. Bring in the outside experts, bring in the financial experts, because you're going to get more money for your business than if you tried to do that yourself.

[Kate]

Now, from the point when you determined the value and you had a buyer, how long was that whole process, that whole transition process of, okay, now you're the new owner paperwork's been signed. I'm stepping away. Like how long did that.

[Jennifer Koch]

First of all, I'm going to tell you, buckle up. Just because you have a potential buyer, that is a roller coaster. One day she's approved, next day she's not. You know, it was an up and down. I had, you know, we had an attorney involved, we had a banker involved, we had all the people involved. So it takes a while from the moment that you find a buyer because there's a lot of due diligence that has to happen. So that process probably took about a year just for her to get approved to her to get the down payment for us to get everything buttoned up with the lawyers. It has been done quicker, especially if you use a business broker. But us doing took about a year and then part of the contract was I stuck around for a year as a consultant, as a mentor. But what was great about that is we had so much time probably from the moment I approached her and said, are you interested in buying my business? Because I know you have a passion for this. It was probably three years till it was done deal. So we had a lot of time to kind of train, show her the other side of the business. Because just because you have a really good employee or manager doesn't mean they're going to be a good business owner. There's other things they have to know. So we had a lot of time to do that. And then I was kind of on speed dial for a while and it just kind of slowly, you know, she didn't need me as much anymore.

[Kate]

Yeah, yeah. The, the business grew up and walked away.

[Jennifer Koch]

Yes. It's kind of like your adult child, you know, they keep coming back and then eventually they don't call as much and that's okay. That means they're figuring it out on their own.

[Kate]

Yeah. Yeah. Oh, that must have been such an interesting experience emotionally to, to see that happen. But also like how cool that you built something from nothing up to the point where now it is a viable source of income for, you know, X amount more people.

[Jennifer Koch]

It really is. There's a lot. There's a lot of reward in paying it forward, I guess, if you will.

[Kate]

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And really this fits in with the big, the picture that we're trying to paint here of raising your prices. Because if a business owner is running her business and technically it might look successful but she's not charging enough when it comes time to value her business to sell it. Because selling is always preferable to just like shuttering it and being done when you want to retire or move on if it's not making the type of profit it should because your prices were never set up correctly. This is a long term illness in the business that needs to be corrected as soon as possible. So if we've got a service provider in the home industry listening who's like, okay, I, I'm pretty sure I'm not charging enough and I know we've got a handful of people listening who are like that, what is the first thing they do? Because I don't want them to be paralyzed, like, oh crap, I've made a huge mistake. So what's step one?

[Jennifer Koch]

You know what step one is, take a pause and reevaluate what you're charging down to the nitty gritty. You know, think. Take a project and evaluate it in detail, including your time. And if you're not sure of your time, start tracking your time. I know we talked about that earlier and it's interesting because I'll say that to every one of my clients and every single one comes back if they track their time for a couple weeks and they're blown away by where they're spending their time, first of all. And second of all, you're spending more time with that client than you realize. So, you know, let's not beat ourselves up. We've all done it. We all started a business. Especially when you're in the early stages, you're going to work with anybody and everybody because you just want business and that's fine. And you're probably low balling yourself because you just want business. We all do it. That's okay. But it's okay to say, you know what, I don't want to keep doing this. Because what happens is you're going to start to grow weary. You're going to start to burn out. And yes, you might have a passion for helping others, but at the end of the day, it feels good to bring home a paycheck. And so I always say too try to bring home a paycheck once a month. An owner draw once a month, even if it's just $500, because it makes you feel good. It gives you that validation that I am actually building something.

[Kate]

Yeah, yeah. And in the first couple years of business, it might just be $500 a month. That's literally how much I paid myself when I was like two years into business and wanting to give up, like, oh, this I work so much and I'm not getting anything. But that goes back to build it. Right. It will grow. The consistency does pay off. And when you're working with an interior designer, because I know that you definitely work with a few of them and they need to raise their prices, how do they go about doing that? Do they just start bidding projects out at a higher rate? Or if they're in, if they are in the middle of like they've got repeat clients that keep coming back for new project after new project, do those people stay at the old price? How do you tell them, hey, it's gone up? These are questions that they ask me and I'm not qualified to answer. So I defer.

[Jennifer Koch]

Well, first of all, I'm a big fan of the numbers tell the story of your business. And so the first step is we've got to see what kind of gross profit margin you're at. If you're sitting at 40% and you're still not making enough money, then we've got a different issue. That issue is you're spending a lot of money on maybe software or marketing or, you know, different elements. Utilities, rent, lease, whatever it is. So that's the first step. We've got to see what your gross profit margin is. If it's really lean and you're not making enough, then we have to figure out why that's happening. And is it a vendor issue? Is it you're not charging enough for your time? And so you have to kind of take all of this into, you know, into consideration. You can't just say, oh, I'm just going to charge 10% more starting tomorrow. Well, we really want to look at what's going on. And then we slowly start to incorporate price increases with, maybe we start with new customers, and then we incorporate price increases with current customers. And the other thing that I will tell you, one of the best things you can do to charge more is to position yourself as an expert, be known in your industry for something, whether it is, I am an interior designer that helps moms with toddlers, or I'm an interior designer that specializes in kitchen remodels. Because when you become known for something, you become the expert. When you become the expert, people start to refer business to you. So not only do you save a lot of time getting clients, but then you can really start to hone in on your costs and hone in on what you can charge.

[Kate]

Yes. And I like, I personally attest to that. Like getting it really focused on what the niche should be, or as my East Coaster state, the niche that does everything in making the business branding better. The brand message is clearer, the marketing actually becomes a lot easier. And yes, you can charge more, become more profitable, but a lot of people are terrified of niching down. And I know this is something that you talk about on your podcast as well. So with your experience and with all the people you've spoken to, why. Why are people so scared? I mean, obviously the easy answer is they think they're not going to get clients. But is there more to that story? Like, what lies are they telling themselves that make them say, I'm not going to be a specialist, I'm going to be a generalist? Some of the lies that I've heard are, well, nobody around me is doing it this way. So that probably means it doesn't work or I will end up being too expensive if I become very, very niche focused and therefore all my competitors will get the clients and not me. Do you have anything to add to that? Those list of lies?

[Jennifer Koch]

I would totally agree with your list of lies. And like you said, there's this huge fear that the bigger, the smaller the group I talk to, the less business. It feels very counterintuitive. Right. The other fear is imposter syndrome. Because if I say I am an expert in kitchen design, there's pressure that comes with that. There's this, well, who am I to be an expert in that? And so we stop ourselves from putting our flag in that and saying, this is who I am and this is who I want to help. And you know, we have to remember, just because you want to focus or brand yourself as kitchen doesn't mean you can't help with bathrooms or bedrooms or other rooms. And 99% of the time you are going to help clients with those things too. But in this crazy digital world that we live in, which you know, you know this, we are bombarded with messages and if we're going to stand out, we have to stand out somewhere. And you cannot stand out as a generalist. People are not going to remember you.

[Kate]

No, exactly. It is about becoming memorable. And yeah, I agree with you, imposter syndrome is huge. But I also think that we can flip that around and use it as a self fulfilling prophecy. So, you know, say you got to say your morning mantras. I don't, I don't really do that. But the idea is the same of like, say you're going to fail and you're going to fail. Say you're a specialist and you might just rise to the occasion and become a specialist and you might surprise yourself. That's kind of what I did in my business. I felt like I was faking it till I made it. But in the early stages I was like, well, I really hate marketing. There has to be a better way to do this. And then I figured out a way that worked for me. And then I was like, well, maybe I could do this for other people. And I got to set myself up as a professional. So now I'm a marketing professional. And that felt gross. But I did it anyway. And eventually I was the marketing professional. But it had to, I had to put some pressure on myself in order to do that. And I think a lot of us are scared of putting that pressure and holding ourselves to.

[Jennifer Koch]

Sure. And you know, we're evolving. Our businesses are evolving. Right. And I think there's also this, oh, my gosh, I don't know what to do next. I'm supposed to do all these things. I, you know, I listen to this podcast, that podcast, you know, and that's why sometimes we have to give ourselves grace and look backwards and at how far you've come. And I bet if you look backwards and look at your clients and kind of analyze who they are, their style, their personalities, what they came to you for, you're going to start to see a common thread. We just naturally all have something that we are gifted in our zone of genius, you hear it called, or we just tend to naturally attract a certain type of person. And so you're going to start to see it. It's probably already there. You're just not looking for it.

[Kate]

Yes. Oh, I agree. When I was trying to figure out what my niche was, I looked at like, okay, what other clients I really enjoy, like, what sort of industries? And I was like, well, insurance is out because that's really boring. Dental offices, no. Ew, major ick factor. And then I realized, okay, all the ones I enjoy working with are, you know, interior designers, remodelers, design build firms. And so I agree, that's a great way to look at it. Now some of my clients are like, I really do work with such a huge variety of people and I like all of it. Then I ask them, okay, but is there a certain type of project you always find yourself doing? Because you do not have to niche down to a certain type of person or client, but you can niche down to a certain type of project. Kind of like you said with kitchen and bath. So you could specialize in, in families, whole home interior design or organizing, whatever that is. Or you could specialize in a certain room of the home in exteriors. How have your clients handled that? Have they gone?

[Jennifer Koch]

Yes, because that is one of the key things I take my clients through because I find that it makes them more profitable and it also makes them easier to find clients. So I have a three step that we look at. We look at the ideal person, like what we said. We look at the industry or project. You could say project or industry, like commercial. And then the third thing we look at is, do you want to be a thought leader in something? Do you have a unique opinion about something? Do you have, you know, kind of an expertise that you could also position yourself in? So this could be, you know, do I want to be known for sustainability? That would be something that you're you're very passionate about. It's a thought leadership. And so, you know, there's that third element too that can help you kind of talk about your business, talk about your brand, and stand out a little differently to attract the people that you want to work with.

[Kate]

That is a really interesting thought, and I like the term thought leadership because it also means their marketing is not going to be all cookie cutter. It's not. They're not all going to have to write blog posts about how to style a bookcase because we really don't need any more content like that, honestly. But with thought leadership, how do you guide your clients through that aspect of it? Because I would imagine that imposter syndrome pops up yet again, like, who am I to be a thought leader?

[Jennifer Koch]

Well, it's true, but once again, we look backwards. We look backwards and let the numbers tell the story. We do an analysis of our current customers, how they found us, why they like working with us, why we like working with them. And we also just kind of also look at their methodology. You know, is there a system that you have, a way that you take your clients through it? There's a reason you do what you do. And I love telling entrepreneurs this because there's a lot of fear about saturated market. There's, you know, interior designers are a dime a dozen, but there's only one you, you know, you have your own unique perspective, you have your own history, your, you know, the way you grew up, your thoughts. And so people need you. Because there's other people out there that want to work with somebody like you.

[Kate]

Yes. I mean, there's more than enough business to go around. And even I say that, I say that even now when we have a slight recession going on. I mean, slight is another subjective term. For some people, it's a pretty significant recession. And we hope that it'll get better after, after November, December. But there's still a lot of people who need what these interior designers and organizers and stagers are offering. And there are plenty of people who've had bad experiences with professionals just because it wasn't a personality fit, something as simple as that. So I, I'm really glad that you take your clients through the thought leadership portion of it because I honestly do not see a lot of coaches doing that. Or if they do, they're not coming right out and saying, like, this is what we're doing, because that is a very much CEO big picture strategy.

[Jennifer Koch]

Well, and each business is different, you know, so not all my clients are going to position themselves in their thought leadership.

[Kate]

But.

[Jennifer Koch]

But some are like, for instance, I have a dog bakery and she does all the baked goods for dogs. And we were trying to figure out how to position her. We didn't want to choose a certain breed. We didn't. Obviously, dogs is her industry, if you will. So she's a thought leader on how dogs play. She put her flag in that because she's in a very cold climate. So there's lots of months where dogs are stuck inside, owners are stuck inside. So she became known as an expert on how to play with your dog things that you can do. And so it can be as simple as that. Just looking at your industry, your climate, your market, your clientele. And so we just kind of keep peeling away the layers. And that's why bringing in an outsider can help. Because sitting here trying to think about it yourself is very overwhelming. But when you have somebody kind of to bounce that ideas off of, we keep peeling away at the layers. Something that's going to bubble to the top and then we try it out for 90 days. Nothing has to be permanent. So all this fear around choosing a niche or trying to figure out what you want to talk about, you don't have to do it forever. Do it long enough to test it out, but it will change, it'll evolve. And that's okay.

[Kate]

Yeah, yeah. I like to be reminded, and I like to remind my clients nothing is actually set in stone. You can change it. And that does reduce some of the stress around it. So trying things for 90 days, is that kind of like your standard for if we're going to do something?

[Jennifer Koch]

I kind of like that timeframe. I think mentally as business owners, we kind of chunk things down into quarters. That's just a natural fit. And it gives us enough time to have conversations with people in those different groups or segments. And it gives us enough time to test something out. Sometimes we might have to go a little longer, but I don't want us to be shiny object syndrome, where we're doing something for 30 days. Oh, that didn't work. Pull. Because there's so many factors, seasonality, we're heading into summer. You know, there's lots of factors that can affect your business. So we want to give it enough time. So 90 days is long enough, but not too long. Where I lose my clients who are going to get a little frustrated or antsy or bored if they're not seeing the results right away.

[Kate]

Yeah, yeah. Now if someone listening is like, okay, I need her to be that third party objective person in my Business. What does that look like? What different ways do you work with clients? Do you do one to one or group or both?

[Jennifer Koch]

I work solely one to one. It's very customized because I dig into your numbers. I'm going to help you know your numbers. Not to the point where you have to. You've got to be scared of them. I want you to be comfortable with them. I want to make decisions with, you know, using them. I'm going to help you with that. So I'm customized. We work on knowing your numbers, we work on this. How can we position you in your marketplace? What's your visibility strategy? What's your pricing and profitability? And so we worked together for six months and most of my clients like to carry on because I always say I'm your second brain. I'm there to help you make those decisions. When you're having that moment of imposter syndrome or mindset, you can speed dial me and I'm there to help you get through that. And I just absolutely love what I do because I love seeing the results. But more than the results, I love seeing the confidence. And back to pricing. When you feel confident in your pricing and you know your profit margin is good, that really raises your confidence. And that comes across when you're presenting your bid to your client.

[Kate]

Oh, absolutely. It comes through in marketing too. It's really easy to see when someone has started building a business they don't like if they're, you know, they're right through their marketing because it will be very lackluster, very disjointed. But when someone has true confidence, they know that they're delivering a valuable service and they feel good about it because they know their prices and their profit margins are set in such a way they will actually be compensated for it in a way that is healthy and not find out at the end of that design project, they only made $6 an hour. Like, then you get the full fledged designer at your service.

[Jennifer Koch]

It is beautiful. And then just think of the experience you're going to be providing for that customer. And then they're going to go on and tell people because when you're high, ticket referrals is so key. And in order to get those referrals, we have to provide that experience. And that all starts with making sure your foundation is really strong. And then, you know, people like you can come in and help market them even better because they've done the work before they get to you.

[Kate]

Yes, yes. I always tell people that, you know, they tend to think that marketing is the most important thing in business. And as a marketing person, I'm here to say it is not the most important thing. Because if you don't have your numbers set up correctly, if you don't know your numbers, you're not going to be able to confidently invest in or afford any good long term marketing strategy. You're just going to end up doing things for 30 days at a time wondering why they don't work and spend needless thousands of dollars on all these different things. And that's exhausting and that drains a person's confidence. So I like that you pointed out, especially in the high tech industry before, referrals are so important and you actually have a really cool freebie around referrals.

[Jennifer Koch]

I do. And a lot of it stems from what we've talked about and it's kind of the three steps to getting referrals. It is knowing kind of who you want to talk to and really niching yourself, figuring out what you want to be known for. Because then that comes down to networking. You know, we can spend so much time going to coffees, going to every women's group in town, and it can be exhausting because the people that we really want to talk to are not there. And I call it, does your business pass the face test? Which means when you tell me what you do, if I mentally can't pull somebody out of my mental rolodex for you, then you are too broad. We need to niche that down a little bit because we want to be so specific when we're at these events. Not only to choose the events we go to, to choose the people we have coffee with, but then also to share with people what we do so that somebody pops in, pops into their mind. A face.

[Kate]

Yeah. Oh, that's a good one. The face test. Okay. All right. So everyone needs to start asking their friends, hey, I mean, you know, an.

[Jennifer Koch]

Example is a realtor, if everybody knows a realtor. So you go to something and they say, oh, you know, I sell real estate. Okay, that's nice, thank you. But if I met you and you were a realtor and you said, oh, I help first time home buyers find their first home, that's a niche. And immediately I've got like three people because I have daughters in that age range. So a face came to mind. She might not be at the moment wanting a home, but at least a face came to mind. So that's what we have to work on in order to become referable. And so my guide is three steps to help you kind of start thinking about your business to get you going in that direction.

[Kate]

So how can people get this guide?

[Jennifer Koch]

So if you go to my website nextwave businesscoaching.com there's a pop up there. I can also send you the link for that. And I'm also on LinkedIn. I am mostly on LinkedIn. Jennifer Owenscoke, send me a message that you heard me on Kate's podcast and I will send that over to you.

[Kate]

Awesome. And there will be in the episode description on Spotify, on YouTube, on all major podcast players there will be a link to that freebie so anyone who is listening can grab it. I highly recommend it. And Jennifer, thank you so much for coming on the show.

[Jennifer Koch]

Thank you for what you do. I really enjoyed our conversation.

[Kate]

Thank you guys. Thank you guys for listening and be sure to come back next week for more marketing and business advice. Until then, keep your marketing simple, your message clear and I will talk to you soon.