Develop a Community Conscious & Equitable Pricing Model as a Creative Small Business Owner
Your big day has finally arrived. The photos you took over the past 10 years of travels and wanders are hanging on the pristine white walls of that amazing gallery where you always dreamed of exhibiting. And now, here you are.
The small alleys of the venue begin to fill with an interesting crowd; a mix of edgy and trendy folx, most of the photographers, just like yourself. Everyone wants to speak to you, and your naturally introverted brain is having a rough time adjusting to all that attention.
Suddenly, completely out of the blue, a woman grabs your arm, and, after you manage to recover from the slight startle, you realize she’s talking non-stop about your ability to “see” people and how incredible it would be to be photographed by you.
Uh-oh.Your brain whispers.
And then, as unexpectedly as her very own presence, the unavoidable question arrives: “So, how much do you charge for a private photo shoot?”
Your hands start to sweat.
It’s not that you don’t enjoy doing private photo shoots; you would love to do more of those, but you never know how much you’re supposed to charge. Truth to be told, you don't feel that comfortable charging. At all.
The heart of your conflict? You take photos because you love capturing people’s lives and not necessarily for profit. IN FACT, you’re so adamant about giving back to your community through your art that you’ve already taken the necessary steps to donate half of tonight’s sales to your favorite charity.
Because art and profit don’t always mix well, right?
Right?
Unfortunately, this perception may not be entirely accurate.
Dirty and Unsexy Money: When Profit Gives You the Chills
It is a truth (almost) universally acknowledged that we, creative people, struggle with charging for our work. Yes, we absolutely love what we do, and that passion pushes us to share our beloved creations with the world... Yet, when it comes to putting a price to our work we freak out.
The reason behind this is simple: in one way or another, society has taught you that you can’t really make money with art & creativity.
No.
Money comes from “hard”, utilitarian work; the type of occupation that provides tangible value to others, visibly improving their lives (overpriced health-care services, anyone?).
And not only that. Since you have been sort of conditioned to believe that your art or creative work has no intrinsic monetary value, whenever you charge you feel that you’re ripping off someone. And as you don’t want to concede any more power to our over capitalistic culture, you set up an extremely low price or, in some cases, you decide to work for free.
The problems with this approach? Sooner or later you end up realizing that you’re only racing against yourself. Because, unless you’re independently wealthy (which is totally okay, if it’s your case) one harsh reality stands: if you don’t bring in money to your creative business, you won’t be able to grow it.
Not only that, we ALL suffer as a creative community. If we don’t price ourselves to reflect the value of our work (time, energy, years of experience, etc.), we’re also teaching other creatives and small business owners that our work and art aren’t valuable or that others won’t pay those prices. It diminishes our worth in general.
And, if there’s no business growth, your work won’t generate the impact you envision and desire. So, at the end of the day, not charging for your work only leads to a frustrating Catch-22.
How can we take care of one another if we’re ALL struggling and creating more collective labor and demand for mutual aid? We can’t.
So, instead of constantly living in the cycle of surviving, we could be the ones to create the ripple effect of what it looks like to “charge your worth” and give back to your community.
Enter the equitable pricing model.
In the rest of this article, we will share strategies and tips so you can remain creative and community-conscious while creating equitable rates that allow your business to grow, thrive, and give back.
Related article: “The Secret to Being More Creative in Business (and getting paid for it)!”
So, what’s equitable pricing?
An equitable pricing strategy is a tiered pricing model that determines the price of a product or service by taking into consideration the payment capacity of the final consumer.
In other words, when you opt to use an equitable pricing model, you agree to offer the same product/service at different price points. Folx who buy from you will thus pay the price that’s affordable for their means.
This pricing model has been used with different levels of success in the pharmaceutical and healthcare industries, thus allowing patients in marginalized communities and global south countries to access medicine and other medical treatments that, otherwise, they wouldn’t be able to afford.
Although some coaches and consultants have started to implement equitable pricing systems in their businesses, this pricing strategy still has some road to travel in the small-business world before it becomes widely implemented.
But there’s good news! More and more BIPOC small business owners are starting to understand the immense value that equitable pricing models have.
Why? It’s simple: when you implement an equitable pricing model as a BIPOC small-business owner, you’re essentially telling the world two crucial things:
You are willing to support your community by providing prices they can truly afford.
You’re NOT willing to systematically undercharge for your services because you are a business, and as such, profit is important.
Equitable pricing strategies are an excellent way to fight back hustle culture and the never-ending pressure to always be working, working, working.
Related article: “4 Limiting Beliefs Holding Back BIPOC Creative Business Owners”
3 Tips for Developing Your Own Community-conscious and Equitable Pricing Model
Now that you understand the benefit of equitable pricing models, you’re probably wondering what are the steps you need to take to implement this strategy in your business. Will this be challenging? Will you need to do major adjustments to your business model?
Here are three crucial steps to take when crafting your personalized equitable pricing model.
Related article: “Improve your Money Mindset with 6 Money Mindset Tips for Creative Artists”
First Things First: Know your Own Numbers
Before deciding on anything, you need to know how much it costs you to produce your work. If you’re selling a product, think in terms of materials, manufacture, and time invested in its creation. If you’re selling a service, an easy way to estimate your production cost is by calculating an hourly rate and multiplying it by the number of hours you invest in providing the service.
Once you have your production costs, you’ll have to add to that your living expense costs. The resulting figure is the amount you need to make to sustain your current lifestyle. If you want to grow your business, you will have to earn more than what you’re spending to create some solid profit margins.
If you’ve never figured out these numbers before, doing it for the first time may seem like an unnecessary hassle. Believe us, it is not. Knowing your numbers gives you control and data to work with when pricing and figuring out what works best.
Register for Brunch Crunch
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Register for Brunch Crunch 〰️
Register for our upcoming July 2022 Brunch Crunch focused on the art and science of intentional pricing!
Wednesday, July 13, 2022
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Wednesday, July 13, 2022 〰️
Set Money Goals!
Like any business-forward creative, before setting an equitable pricing model, you’ll need to establish some money goals to help you track your progress.
Here are some useful suggestions for potential goals:
Giving back to your community through donations or pro-bono services.
Saving for purchasing new equipment.
Saving to take a personal vacation.
Of course, this list is not extensive. A good approach is to consider all your goals and then decide how much profit you’ll need to make to cover those potential expenses.
Related article: “4 Make-Or-Break Financial Skills for Creatives”
Create Tiered Opportunities for Your Community
Finally, this is the step where you get to decide what your equitable pricing model will look like! REMEMBER: you don’t have to give away things for free to make your services or products accessible to those who need them most.
Here are some ideas of equitable pricing models that have worked for several small-business owners:
Pay what you can: buyers pay whatever they can afford for a service. A pro tip here is establishing a pay range.
Mutual Aid: an exchange of services or products amongst the members of a community where all people mutually benefit.
Sliding scale pricing: folx pay according to their income, location, or other relevant criteria.
Full-price for brands and corporations: you CAN offer a “corporate” price that allows you to continue supporting your community in a meaningful way.
Remember: you can always get creative with pricing! The essential thing is to set up your prices in a way that allows you to provide for yourself and for your community.
Related article: “Black Business Month: Financial Resources”
Wrapping Things Up.
As a creative business owner, deciding how much to charge for your work can feel like an absolute hassle. Money has a tendency to weigh you down, and we get it. However, if you want to see your business grow, you cannot avoid charging appropriately for your work.
If we’re all undercharging for our work as a way to give a middle finger to “the man” (aka capitalism), then what really happens is we have a community that is struggling, not thriving. We know this might sound counterintuitive, but BIPOC, creative business owners, we need to play the system to beat the system.
And to play the system, there’s no need to undersell your services to provide support for your community. If you are deciding to give back, adopting an equitable pricing strategy is the way to go.
The following are 3 tips that will allow you to do just that:
Knowing your own numbers.
Setting some money goals.
Creating tiered opportunities for your community.
If you only have one takeaway from this article, let it be the following: your time, energy, resources, and creativity are just as valuable as those of someone who spends their days doing work whose end product is necessary for everyday life (think commodities and other essential services).
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