Imposter Syndrome: How Business Owners Can Know Your Value & Charge Your Worth

Have you ever heard of ‘imposter syndrome’? It’s a psychological concept where someone doubts their own skills, capabilities and achievements – and feels like a fraud.

Up to 82% of people suffer from this syndrome – and many of these are entrepreneurs.

Business owners often feel like they aren’t as good as they say they are. Many who know their value find it hard to communicate it to their customers. They don’t want to sound demanding or scare prospects away to competition because of their prices.

This is important for a number of critical reasons.

• If you don’t understand your actual value, others may take advantage of your ignorance or vulnerability.
• People may demand price way below what you should be receiving (given your skills, reputation, or the overall quality of your service).

Rather than lose a potential customer, they settle for less – a price that doesn’t reflect their worth.

We’ll tackle this phenomenon in this article – and give you a few tips on how to overcome this ‘imposter syndrome’.

How Imposter Syndrome Can Destroy a Business

Before we go through the ways you can realise your value, let’s look at an example of why imposter syndrome is so dangerous.

Let’s look at Cynthia, who wanted to launch a high-end fusion restaurant.

While planning the menu, she felt conflicted about setting premium prices, even for her signature dishes. After all, none of the other local food spots offered dishes at that price.

Compared to the more established institutions, she also didn’t feel confident enough that her cooking skills and presentation were better or at least at par with them.

When her partner tried to convince her otherwise, Cynthia tried to argue back that they needed to set low prices during the start so that prospective customers would come and dine with them.

Though these reasons might sound valid at a glance, the repercussions of such choices have long-term effects on the restaurant’s reputation and overall success.

By undercharging her signature dishes, Cynthia didn’t have much wiggle room to increase the price due to rising costs. If she opted to change the recipe to remain profitable, she would risk losing the favor of her loyal customers who go to the restaurant just to taste the best items on the menu.

Cynthia imposed more blockades against her when she decided to restrict herself to what her peers were already doing. And yes, she might be the newest player in the game at the time. However, that didn’t mean that she couldn’t go outside the box and offer something new and exciting to the customers who would have been more than willing to pay the premium.

In the end, the low prices Cynthia offered to the diners prevented her from living up to its potential. Her slim margins gave little to no room for experimentation, so her menu quickly grew stale in the eyes of the customers.

She also had to work harder to break even, and by the end of the first six months, Cynthia was burnt out and disillusioned.

Tackle Imposter Syndrome with the Right Mindset

To avoid falling into the traps of undervaluing yourself, you have to realign your perspective by reflecting on your impact on the customers. We’re not talking about the products or services of your business. Instead, your focus should be on how others will benefit from what you’re offering.

Going back to our earlier example, Cynthia failed to recognise her fusion restaurant’s unique value propositions (UVPs). She knew that her menu would be different from her competitors, but she grounded herself before she could even take off. Rather than catering to the people eager to try something novel or daring, she allowed the status quo to keep her imagination and ambition in check.

So, what can you do to avoid this?

We recommend trying this quick exercise to boost your confidence about the value of your business. Consider writing down your responses and thoughts to examine them closer afterward.

1. Imagine you’re in front of your dream customer.
2. Why do you think the customer chose you over your competitors? quality or timeliness of your work? Or perhaps you always go above and beyond to extend good customer service?
3. Think of three to five positive feedback or praises that the customer will likely share with others about your business.

Highlight the common themes in your responses. Keep in mind those qualities. they will help you build confidence about the worth of your business.

They can also ward off your fears and doubts as an entrepreneur and ultimately serve as reminders of why you started the company in the first place.

How to Price Your Goods and Services

Small businesses that deal with tangible products may find this task more manageable than those that offer services.

Nonetheless, here are some valuable tips on creating a strategic pricing plan that will allow you to walk the fine line between undervaluing or overcharging your worth.

Define the capabilities of your target customer.

Are you going after people with disposable incomes or those who are looking for great bargains? Can they afford a higher-than-average price tag, or will that be a deal-breaker?

You don’t have to consider all groups of prospective customers—just the ones with a high potential to become your loyal, paying customers. 

Factor in your expenses

Even as a small business owner, your expenses might balloon if you don’t pay attention, especially to variables like travel accommodation or rental equipment.

Day-to-day incidentals can add up to the point where they might eat away your margins. List these probable expenses and consider them while thinking of the ideal price points for your business.

Determine the appropriate pricing method

Depending on the nature of your operations, you may charge fixed, project-based prices or a combination of both. For example, you have standard prices for regular services, but prices for customisations can vary based on the complexity of the customer’s requirements.

Many who offer professional consultancy or contractual works also set hourly pricing for the time they spend delivering services.

Trust your instinct over others

You’re the person who knows best the worth of your business. As tempting as it may sound to ask your family or friends how much they will pay for your goods or services, refrain from doing so unless you are sure they belong to your ideal market.

Researching your competitors’ prices will serve you well while mapping out your UVPs. However, those prices should not stand as your limits. Focus on appealing to your target customers rather than reaching out to everyone.

Set a price review schedule

This applies even more so nowadays, given how volatile the market is. In general, you should review your prices every three months.

That will give you ample time to observe how your customers will react to your prices, but not too late for you to lose business because of a wrong pricing decision.

Own Your Worth

A common mistake among novice entrepreneurs is accepting lower pay from several customers just to stay afloat.

More often than not, applying this strategy will prevent you from gaining the trust and loyalty of your ideal customers.

You’d be too busy juggling projects or contracts that you wouldn’t want to accept under better circumstances.

What’s a better strategy?

Select customers who you can surely delight with your products or services. If you have thoroughly impressed them, there’s a higher chance that they will recommend you to others who are in need or interested in what you offer.

You will also feel more confident about requesting them to leave reviews about your business, which you can then use as solid support for your pitches to future clients.

You Deserve It

Small business owners often fall prey to the imposter syndrome because of self-esteem issues, uncertain market conditions, or the lack of practical experience in their chosen industry.

Regardless of the reason, there is no better time to think about the value of your business to its customers than now.

We highly encourage going through the brief value-recognition exercise we shared earlier in this article. Be honest in your responses so your confidence will have a strong foundation that won’t be shaken by doubts or apprehensions as you set the optimal prices for your business.

Don’t forget to exert effort in proving your worth to your customers. Talking about your UVPs won’t get you far if you don’t have the results to back them up.

If you want to learn more about the intricacies of establishing your worth as a business owner, speak to us now to receive further guidance from the experts.

Whether you’re just beginning your career as an entrepreneur or looking for ways to resolve the issues you have encountered along the way, we’re here to get you back on the right path toward success and happiness.