You know the market value of your service is higher than what you actually make. You have colleagues who perform the exact same work but earn more than you. They’re living the kind of life you still only dream about. Why are they excelling while you barely inch forward?
If you’re like a lot of entrepreneurs, you assume your more successful colleagues are better at the wheeling and dealing. They must be stellar negotiators. Maybe they’re more charismatic and better at networking. They probably know where to find high-value accounts and how to close big deals.
Yeah, maybe. All these things could be true. But in my own experience as an entrepreneur and as a mentor to business owners, I have found there’s usually something much simpler going on. And it has nothing to do with your ability to negotiate with buyers.
It’s about the way you negotiate with yourself.
You Get What You Believe You Deserve
Whether you are aware of it or not, you have already determined your worth as a professional. I’m not talking about the number you present when someone asks your rate. I’m talking about an unspoken belief . . . the way you feel—deep down—about your value and capabilities.
Let’s say you provide a service you know is worth $200 in the market. You plan to negotiate for that amount. But somewhere deep within your core, you consider yourself a $100 professional. Even if you intend to price yourself at the market rate, odds are very good you’ll only earn $100.
You see, even as you negotiate with a customer, you’re conducting an internal negotiation with yourself. You tell yourself $200 is the going rate for a service like yours, and a voice from within responds:
Sure, but you’ve only been in the industry for a few years.
Can you really do a good enough job to justify that rate?
Maybe that’s what a great business would charge, but you’re only average.
No thanks to this voice, you present your price with visible uncertainty. Or you back off at the first sign of hesitation from your buyer. Or you conveniently never get around to updating your rates.
In the end, you discover that negotiating has very little to do with what your buyer thinks you’re worth. Rather, you get what you believe you deserve.
What if Your Skills Actually Aren’t Worth Much?
Turning off those internal negotiations is difficult because your inner voice may not actually be wrong. It’s entirely possible that you don’t have an exceptional skill set right now. Maybe your best efforts are truly only worth $100 at this point in time. In which case, how do you lie to yourself? How do you shut off the voice telling you that the higher rate isn’t fair to your customer?
You don’t. If you truly cannot do the kind of work that’s worth $200, don’t charge that much.
But don’t let the rate that’s fair today define your value forever.
This is where I see a lot of entrepreneurs limit themselves . . . sometimes even doom themselves. They get it in their head that they are a $100 professional. Sure, they’d love to move up. They’d love to earn more, grow their business, finally buy that house or take that vacation. But what can they do? They’re only average. They’re a bargain business; they can’t compete with the major players.
If this sounds like you, let me tell you right now that your problem is not that you can’t get clients to invest more in you. It’s that you can’t secure your own investment.
What are You Worth to Yourself?
Your value as a professional isn’t just about the skills you have today. It’s about what you’re capable of in the future. And you cannot survive and thrive as a business owner if you don’t make personal investments such as:
- Professional training
- Self development
- Longer work days
- Industry-related reading
- Connecting with a mentors
If you’re not taking these steps right now, ask yourself what’s holding you back. When you say, “I think I might attend that professional seminar next month,” how does your inner negotiator respond? Do you catch yourself thinking things like:
You shouldn’t spend the extra money.
You’re awkward when it comes to networking. The seminar will probably be a waste.
You’d have to put in extra hours at the office to make up for lost time. It’s not worth it.
All of these responses essentially mean the same thing:
I don’t believe I’m able to improve enough to make up for that investment.
Each step you take towards professional improvement requires a personal sacrifice, whether you’re giving up time, money, or resources. If you don’t believe you deserve that investment, you won’t make it. As a result, you won’t move forward.
Your Earning Power Begins with Self Value
It doesn’t matter if you’re negotiating with a buyer for a better rate or you’re negotiating with yourself for time and money to put towards self-improvement. In every circumstance, what you can achieve begins with your self-worth.
The rule applies to all areas of life. If you believe you deserve a great relationship, you won’t stay in a bad one. On the other hand, if you doubt you can do better, you wind up settling in a situation that brings you very little fulfillment.
The bottom line: if you want to grow your business and comfortably negotiate for a better rate, the first person who needs to be convinced of your value is you.
You became an entrepreneur because you know you can lead. You know you can sell a service and you can out-perform your competitors. Now it’s time to prove it to yourself by investing in your success. Trust that those extra hours, that extra effort, and the extra money will all pay off.
Stop negotiating your way out of success. Believe in your own value, and others will follow.
Check out Idan's new book here.