Many entrepreneurs underprice their services and products, especially in the early stages, for several interconnected reasons.

I know I did it when I first started out. And I continued doing it for far longer than I should have. 

Let's take a look at some of the factors that contribute to this phenomenon.

Here we go:

1. Mindset issues & self-doubt

To me, this is numero uno. They fear people won’t pay more, often because they don’t fully believe in the value they provide. 

They feel “unworthy” of charging higher rates or pricing, especially if they’re new or if they compare themselves to more experienced competitors. 

Never lose sight of this fact...that competitor the one who may have more experience, often doesn't come close to offering the value YOU do. 

We've all experienced that scenario where the "big fish" over-promised and under-delivered. But that didn't stop them from pricing their product or service the way THEY wanted. That's  a mindset.    

2. Not understanding their true value

They focus on hours or tasks instead of the results or TRANSFORMATION they deliver. 

They completely disregard how much time, skill, and experience they actually bring to the table — forgetting clients aren’t just paying for time, but for expertise and outcomes. 

I have a successful, 20-year sales career behind me selling two very competitive products - advertising and telecom. 

In addition, I invested time and money with American Writers and Artist Institute (AWAI) to learn how to write copy that gets results. 

Plus, I've worked with over a hundred clients in all types of industries. 

All of that means I can help bring a transformation to my clients faster and with less frustration than they can on their own. 

Although no copywriter or marketing consultant can guarantee results, the value I bring to my clients stacks the odds heavily in their favor. 

Think about that as it relates to the value you offer.   

3. Trying to compete on price

They think being the cheapest is the easiest way to win business. 

Great if you're Walmart. NOT if you're most of us. 

In fact, this strategy often backfires, attracting bargain hunters who are the hardest to please and the first to leave. 

In all my time as a professional copywriter and marketing consultant, I can NEVER remember taking on a client for a promotional price (read cheaper) that ended in anything other than disaster. 

These arrangements can suck the life out of you. No. No. No.  

4. Fear of rejection or losing sales

They’re worried if they raise their prices, prospects will say no. 

They’d rather get “some money” than risk getting none — so they keep prices low as a safety net. 

In my opinion, all this does is attract prospects who are likely not a good fit. 

If you do a proper job of explaining the VALUE you offer, you'll be fine. 

Think of it this way...does any one NEED a Porsche to go buy groceries? Hmmmmm...not really. There are many cheaper cars on the market. They key is to understand your market. 

People who drive Porsches WANT to drive them and will pay the going rate provided it gives them something they want. 

My clients are tired of working with charlatans and pretenders who don't do what they say they will and take forever to get back to them. That can be worth a lot to someone who is trying to grow their business fast.

5. Not doing enough market research

They don’t look at what their ideal clients are willing to pay or what competitors in their niche charge. 

They fail to factor in costs, taxes, overhead, or the need to invest back into the business. 

This was a bit of a no-brainer for me. AWAI has a Copywriting Pricing Guide that it publishes. It shows pricing ranges based on experience that I use as a guideline.

If you haven't got a line on your competitors' pricing, you might be in for a shock! Some will be charging waaaaaay more than you do. 

Bottom line: do your homework and know where you fit in.

6. Underestimating the effort involved

They forget to account for time spent on non-billable activities: admin, marketing, client acquisition, revisions, etc. 

They price for “just the project” instead of the bigger business picture. 

To me, I have always thought of non-billable activities as part of the game. It doesn't mean I'm oblivious them, simply that my pricing takes that under consideration. 

One area where I know I am a bit loosey-goosey is client communication. I think I make myself too accessible via email or phone calls. But I don't care. I know how I feel when I need to know something and can't get a hold of someone. 

To me, it's part of delivering value. 

7. People-pleasing tendencies

This one I get. We all want to be liked and avoid awkward conversations. 

But NOT where pricing is concerned. 

If you are quoting low to make it easier to get a yes, stop! 

Don't say yes to every budget. Hold your ground.

8. Lack of a pricing strategy or positioning

Many entrepreneurs wing it when it comes to pricing. 

Instead of having clear packages, value ladders, or premium offers, they make it up with every new proposal or quote. 

Without including higher value options, they default to charging too little.

Let people buy what they want. Your lower priced offers or your premium top-of-the line deliverables.

The Bottom Line

Most underpricing is a mix of mindset + poor positioning + lack of confidence in value.

When entrepreneurs truly own their worth and clearly communicate the outcomes they deliver, pricing goes up — and so does the quality of clients.