E: 2 Undercharging Is Killing Your Business: How to Fix It Without Losing Clients

If you've ever wondered why your revenue doesn't feel like enough — even when you're fully booked — this episode is for you. Audrey breaks down the real reason most equine professionals are undercharging.

In this episode:

• Why undercharging happens — and the psychology behind it that keeps talented professionals stuck
• The four-cost framework for calculating what it actually costs to deliver your service
• How to find your real hourly rate (most people are shocked by this number)
• What to do when your pricing math comes back higher than what you're currently charging — including how to raise rates without losing the clients that matter
• A simple two-part homework exercise you can do this week, no spreadsheet required

Whether you're a farrier, bodyworker, veterinarian, nutritionist, trainer, or equestrian coach — if you've been pricing based on what everyone else charges or what feels okay, this episode will change how you think about your numbers for good.

Keywords: equine business pricing, horse business profit, how to price equine services, farrier pricing, equine bodyworker rates, horse trainer pricing, equine entrepreneur, profitable horse business, raise prices equine professional, equine business strategy

Transcript

SPEAKER_00 0:00

Okay, I want you to do something for me right now. Think about your most requested service, the one you do constantly, the one clients call you for first. Now, that could be a number of things depending on who you are that's listening to this, right? So if you have a boarding and training barn, is it boarding or training? If you have borders every month, but not training horses every month, or if you have consistent borders more than training horses, then boarding might be the thing you do consistently. Now, I want you to tell me, once you identify that, and you can be writing this down, you can be saying it out loud if you're driving down the road, but tell me, do you know right now exactly what it costs you to deliver that service? Not what you charge, that's different, what it cost you. Your time, your supplies, your mileage, your insurance, continuing education that keeps you qualified to do it. Do you know that number? If you had to write it down right now, which I'd love you to if you know it, could you? Most people can't. And that is exactly why most horse businesses are undercharging. Not because they don't know that they should charge more, although sometimes they should and there's a gap there, we can talk about that. But it's it's because they genuinely don't know what they need to charge to actually be profitable. Today we're gonna fix that. We're gonna do the math together. I promise it's not as scary as it sounds, but it might be eye-opening. I know it was for me. Welcome, if this is your first time listening. I'm your host, Audrey. Let me take a second to introduce myself because my background's a little unconventional, and I think that's what makes this show different. Uh, I've been running my own functional health practice for 20 years now. During that time, I went from a master's degree in science to a master's degree in nursing to an FMP to a doctorate in naturopathy, all while adding boos of certifications along the way. I used to say I collect certifications like most people collect shoes. Because I apparently don't sit still well. But at the same time, I was also consulting for other people's businesses, sometimes running the growth function myself, scaling companies from early stage all the way to seven figures and beyond across several different industries. It was my side gig, my side hustle. Before healthcare, I ran a marketing business. So the business side isn't something I stumbled into. In fact, intentionally before I went into healthcare, it was where I wanted to go. Uh, it's been something I've been doing my entire career, even before my career, officially, I was self-employed in high school when my friends were working in restaurants. About 10 years into my functional practice, I built the horse business and grew it too. And that started by accident, but grew very intentionally. And what I have found in the equine world was some of the most talented and dedicated professionals I have ever encountered, with almost no business infrastructure around them. Not because the horse people aren't smart. All of the practitioners I run into are absolutely brilliant, but because nobody teaches this. Most horse practitioners, regardless of whether you're a veterinarian, a farrier, a body worker, uh, a nutritionist, uh, a trainer, most horse people come up learning their craft, but nobody teaches the business side, not commerce. That gap is where this podcast is working to fill. That's what that's the gap I'm trying to close. So whether you've been at it for 20 years or you're just starting out, welcome. I am really glad you're here, and I hope you find this useful. In the last episode, which was our first official episode, we talked about five reasons why most horse businesses stay stuck. And the very first one I listed was no pricing strategy, right? Just throwing a number out there. I talked about how most equine professionals set their prices based on what the market will bear or what everyone else in their area is charging. And I mentioned almost in passing that I made this mistake for myself for a long time with my minerals and metals main testing and my e-coin practice. By the time I actually did the math, the cost of the test, my time to run it, my time with the client, all the follow-up time, I was losing money on every single one. I said it fast in the episode and kept moving, but I want to sit in it for a second today because I think that story is actually more common than people want to admit. And if it's happening on one service, it's probably happening on others too. I actually, when I added members to my team, I did the same oopsie because I wanted to make sure they were getting paid a lot. And if you don't know, nutritionists on my team get paid well. It's about $65 for the half-hour consult. And so when I started, I wasn't charging enough and I was losing money on those consults too, because I wanted to make sure that they were getting paid for their zone of genius as well. So today is the episode I wish I had access to when I was first building the equine side of my business. We are going to talk about why undercharging happens because it's not always just math. There's usually some psychology underneath it. And then we're going to actually walk through how to figure out what you should be charging and what to do about it if the number you land on is higher than what you're charging now. Which for many of you listening, it will be. Now, before we get into the math, we are absolutely and we are going to get into the math. So if you think Audrey's not going to talk about math, we definitely are. But I want to talk about this, about why this happens in the first place. Because if we skip over the psychology piece, people do the math, panic, and then they just don't change anything. And now you just have this underlying panic behind every move you make, like, oh my god, I'm doing this, but it's costing me money. So there's a few things that I see over and over and over again. The first one is passion pricing. And this is what I talked about at the end of last episode. When you absolutely love what you do, and most people in the equine community genuinely love what they do. Most of us, myself included, were like, oh my god, I would do this for free. It's so amazing. So there's a pull to keep prices accessible. You don't want a horse to go without care because an owner can't afford you. You don't want a kid to go without lessons because an owner can't afford or an owner, an owner of the child, a parent can't afford you. Uh, you don't want to feel like you're just in it for the money. You're mission-driven, and that's not a bad thing. You should be in it for the horses. And generally, the clients and the money follows, but you still have to be smart about pricing. That passion is actually what makes you good at this, but when that impulse bleeds into your pricing without any guardrails, it can slowly bleed you dry. Now, here's the thing I want you to understand. You cannot help horses, you can no longer afford to serve. You cannot help horses, you can no longer afford to serve. I don't care if you are a farrier, a body worker, a trainer, a boarding barn, a uh lesson uh teacher, like you teach horseback riding lessons of some discipline or place. I don't care if you're if you are the person that puts together the barrel races or the rodeos. You can't help horses. You can no longer afford to serve. So if your business isn't sustainable, it ends. And then what happens to those horses, to your clients, to those people? Charging appropriately is not greed. It's what keeps you in the game. McDonald's would not be selling burgers if they weren't making money on the burgers. The second pattern uh I tend to see is fear of client reaction. And I hear this all the time. If I raise my prices, I'll lose clients. And I won't tell you that it's impossible to lose clients because it's not. You might lose a client or two, but here's what I've watched happen over and over again. When equine professionals raise their prices thoughtfully, communicate it well, and give people a little runway, a little notice, the world doesn't usually end. Usually you might lose a couple clients who were price sensitive to begin with, and those honestly tend to be the ones that are most demanding as well, and then you gain or retain clients who actually value what you do. Revenue goes up, resentment goes down. I've seen it happen too many times to just be a coincidence. And then there's one more thing I want to say about the fear of losing clients. A client who leaves you for someone cheaper and then doesn't get the same results, and they usually don't, will often come back right back to you. I give my clients a little warning, I communicate the price change well, I give the existing clients a coupon code or a cushion, and I have watched people try to go the cheaper option and then come back and say, Audrey, I had a minerals metals main test run with someone else who would have been someone who graduated from my program, but uh I need help because it's not working or I'm not comfortable with what they told me or whatever that is. And that's not to be dismissive of um people who are getting the certification and doing the work. That is absolutely what I would uh I would absolutely expect top-tier service from them. However, I have learned over the years of doing that certification that I can't control the outcome of what those people do. I can't control what they do, even though they have access to things far and beyond uh their their certification date. I can't control what they do or what they say. And and this is a big and there is a difference, and there should be a difference in charging, really, in developing the program and having 10 years of experience versus getting the certification and just hanging your shingle. It's different, right? The third pattern is comparison without context. And so a lot of times, and this is a good way to see what ballpark what the market would bear, it's part of your research, but it shouldn't determine your price ultimately. But the third pattern is comparison without context, and so you look at what the person is charging in the next county or in your area or what someone in a Facebook group mentioned that they charge or that they pay, and you anchor to that, but you have no idea what their costs are, you have no idea if they're actually profitable, and you're comparing your price to a number that has no math behind it, and you're anchoring your entire business there. And so this is especially tricky for people who are newer to their certifications. And I do tell my certified equine functional nutrition practitioners to look at what's being charged in their area, and that is a good research point to start at. Because when you are brand new, getting clients and getting reps in is the goal so that you can have that breadth of experience behind you. But it's just a starting point, it's not a permanent strategy. And at some point, you have to do your math. We're not getting away from the math, y'all. The fourth pattern, and this one is a little quieter, but probably the most common, is that people are afraid of what the math will show. I know I get twisted up and panicked every year at tax time because I'm afraid of what the math is going to show. I'm afraid it's gonna show that I made several hundred thousand dollars and also spent several hundred thousand dollars, right? So if you sit down and do the numbers, and I have an accountant now that forces me to look at them every month, you might find out that you're losing money. You might find out you're barely breaking even, and that's uncomfortable because it makes the problem real. So it's easier to just not look. But you cannot fix what you won't look at. The math is not your enemy. Ignoring the math is what keeps you stuck, gets you burnt out, causes you to lose money, and ultimately leads to you leaving a profession that desperately needs you. Alright. It's time. Drum roll, the math. Let's do this. I want to walk you through a simple framework for figuring out what it actually costs you to deliver a service. Not what you charge, what it costs. That is the foundation of every pricing decision you should ever make. Including whether or not you should buy that new fancy gadget. Bucket one is direct cost. These are the costs that are directly tied to delivering that specific service. So think supplies you use, like KT tape, products you order for a client, the cost of a test kit, travel cost for an appointment, gas and wear on your vehicle from appointment to appointment. That is direct cost. For some of you, this bucket is small. For others, it's significant. But most people have a rough sense of it. Bucket two is time. This is where things usually fall apart because people dramatically undercount their time. Your time is not just the time that you're with the horse or client, it's the time you spend driving to get there, the time you spent on intake or prep before the appointment, the time you spent on writing up notes, making recommendations, sending a follow-up email, answering the messages and questions after. For some services, it includes consultation time that doesn't happen at the barn at all. So write down every piece of your time that that service requires. Not an estimate, but walk through step by step. You have an average. For me, when I sat down and wrote this out, and I do rewrite it every year or so. Uh, but when I sat down and wrote it out, time to receive and process the test, analyze it, meet with the client, go over the results, follow up questions in the weeks plural after, when I added it all up, it was more than double what I'd been mentally counting. That's the power of putting it on paper. And it that's not uh unusual, it's almost universal. Now, bucket three is overhead allocation. That's just a big fancy word. Um, it's often the easiest one to skip, number one, and it's where a lot of people have kind of this blind spot. But it's the costs that don't belong to any single appointment. Um, these are things, but they exist because you're running a business, right? So your insurance, your vehicle, uh like your insurance, your professional liability insurance, as well as your vehicle insurance, your continuing education and certifications, your membership fees, professional organization dues, your website if you have one, scheduling software, any tools or subscriptions you use to run the practice or education. What you need to do is add all of those up annually and then divide that number by the appointments or billable hours you do in a year. And so this kind of gives you a per appointment overhead cost. Even if you're doing what we talked about in bucket one, direct costs and bucket two, your time, 99% of the time people are not doing this overhead allocation. And it's usually uh, you know, a really big surprise. Bucket four is your actual labor rate. What do you need to earn per hour, not just to cover your bills, but to actually sustain yourself, pay yourself a living wage, and build a business that that's worth having. So not per hour of the client facing time, per billable hour, accounting for the fact that you probably don't bill for every single single hour of your day. So if you're working roughly 40 hours a week, how many of those are actually billable? 15, 20, 30, depending on how efficient you are. Whatever that number is, your annual income target divided by your billable hours gives you your required hourly rate. Oftentimes when we do this math, we find that their the required rate is significantly higher than what they've been charging. So once you have all four buckets, direct cost, time overhead, excuse me, direct cost, time, overhead, labor rate, add them up for your most common service. This is your cost floor. Your price should be above that floor, ideally well above that floor, but that is the cost floor. That is the break-even point. Now, here's what I want you to do with this after you listen to this episode. I want you to pick one service, just one, your most common one, your best one, most frequent one, whatever it might be, and sit down. I don't care if it's on the back of a napkin, and walk through those four buckets. Write down every piece of it, add it up, see what you get. And I give you permission not to act on it immediately. Just know the number. Once you see this number, you can't unsee it. So, because once you see this number, you can't unsee it see it. Let's talk about what to do when the math is not super comfortable. So let's say you do the math, the number you got is higher, maybe significantly higher than what you're currently charging. What the heck do you do? Now what? So, first, we're gonna take a big deep breath in through our nose and then sigh it out because this is good information, even if it doesn't feel good right now. Second, understand that you have options and they are not all or nothing. Okay? Option one, straightforward price increase. You are going to charge more, you're gonna communicate it clearly, you're gonna give existing clients appropriate notice and appropriate runway. I'll talk about how to do that in a minute because communication matters. Option two is restructuring your service options. Sometimes the problem isn't the price exactly, it's that you have a service that's truly unprofitable no matter how you price it, because the time it requires can't be recovered in a single appointment fee at any price that feels reasonable to the market. In that case, you might need to look at whether or not you can restructure it, bundle it differently, add a retainer element, charge for a you know a follow-up time separately, whatever you're rolling in. There are creative solutions that we will be digging into in future episodes. So hopefully that's not what you find out. But if it is, that's okay. We still have solutions. Option three is hybrid. You raise some prices, you phase out or restructure the truly unprofitable services, and you do it over time in a planned way. Over three to six months, generally, depending on again what those services are, what your uh uh practice is. But you do it in a time in uh in a over time in a planned way rather than all at once. But let's talk about option one, because for most people, a price increase is a first-right move, and and the biggest block is the conversation, the communication around it. Here's what I know about raising prices in the equine world. It has to feel human. You're not a corporation sending out a form letter. You have personal relationships with your clients, their horses trust you, they trust you, and the communication should reflect that, that confidence. What I do, what I've seen work well, is this. Number one, give real give give people real notice, not a week, at least 30 days, ideally 60 days. Tell them why in plain language without over-explaining or apologizing, something like my costs have increased, including my time and education, and to continue providing the quality of care that you're used to, I need to adjust my rates. That's it. That's honest, it's simple, and it respects the relationship. If you have long-term clients or clients who have been with you for a significant amount of time, I often recommend giving them a bridge. So depending on how they interact with you, uh, you know, if they pay in person or, you know, in uh online, giving them a coupon code if they pay online, if they pay in person, giving them a discount or a locked-in rate for one or two more rounds of services at the old price. Again, it can be very dependent on what your business model overall looks like. Something that acknowledges the relationship, not because you're going to discount them forever or even you owe them the discount, but because it's a nice gesture and it usually keeps the relationship intact. And then you hold the line. You don't apologize for it repeatedly, you don't walk it back, you don't give a discount to the person who pushes back the hardest. Consistency matters here. I promise you, the clients that are worth keeping will stay. Some price-sensitive clients will leave, and that's okay. And almost universally, the equine professionals I've watched do this thoughtfully come back and say, shh, I should have done that two years ago, right? Like, what? I should have done that two years ago. I want to do one more exercise with you before we wrap up because I think it puts everything we've talked about today in perspective. I want you to figure out your real hourly rate, not what you charge per hour, what you're actually earning per hour when you factor in all the time and costs we just talked about. Here's how you do it: take what you charge for your last full week of client work, just the revenue. So total what you brought in. Now subtract your direct costs for that same week. Supplies, mileage, test kits, uh, whatever, whatever you spent. Now, take the number that's left and divide it by every hour that you worked that week. Not just client-facing time, but all of it. The driving, the admin, the follow-ups, the marketing, the invoicing, the scheduling, all of it. That number is your real hourly rate. Most of the time when I do this exercise with equine professionals, it's a gut punch. People who think they're charging $70 or $80 an hour find out they're actually earning $25 or $30 per hour. Sometimes they're actually earning $10 an hour. The worst I've ever seen was less than minimum wage at $5 an hour. And I'm not sharing this to demoralize you. I I want you to understand that the number is the single most clarifying data point you can have about whether your business is working or not. And once you know it, once you see it, you can't unsee it. And that is a really good thing. It gives you a very clear target to move towards. The goal of your business is not just to cover your costs, the goal is to build a business that actually compensates you a living wage for what you bring. The expertise, the years of training, the physical demands of this work, you deserve to be compensated for all of it. And when I say living wage, I don't mean like just enough to get by. I mean enough to get by comfortably and have the money that you need for the things that you need, the things that you want, and those little oopsies that happen. I don't lead with you deserve to make several hundred thousand dollars a year because many people that are listening that start out down this path can't see what that looks like. That they can't fathom what that looks like because they're living paycheck to paycheck, client to client. But I want you to understand that you deserve to be compensated for all of this work, all this education, and all of this expertise. So I implore you to do the exercise, write the number down, and then bring it back to that pricing math that we did earlier and figure out the gap. That is your roadmap. I said in this episode that I want every episode to leave you with something concrete. So here's your homework for this week, and it's two things. Number one, pick a service, your most common one, walk through the four cost buckets direct cost, your actual time, all of it, overhead allocation, and labor rate, add it up, write it down. Again, you don't have to act on it yet, just know the number. To go back and re-listen to the earlier parts of this episode to get all the details. Number two, do the real hourly rate exercise for your last full week of work. What you charged, so all the monies that you brought in, minus direct costs, don't forget credit card fees, divided by every hour that you worked. Write that number down too. That's it. Two numbers on a piece of paper. I won't even tell you it has to be a spreadsheet because you know how those make me feel. The back of a notebook, a napkin is totally fine. The notes in your phone, if that's your jam. These two numbers are going to tell you a lot about where your business actually stands. And then next time we talk pricing, which will be coming up soon, we will continue to build on this foundation. All right, final wrap-up. I want you to sit with us after the episode. Undercharging is generally not just a money problem. We're fixing the money part. That's just math. It's a sustainability and longevity problem. It's a burnout problem. Every time you charge less than the real cost of your service, you are subsidizing yourself out of your clients and horses' future, out of your own financial stability, out of your own ability to keep doing this work. You did not pour years of your life into learning this craft to run a charity. And maybe you did, but even charity has to make money. Otherwise, you can't help anyone. You are allowed to build a business that sustains you, that funds your life, your retirement, your kids, your continuing education, and the things that make you better at what you do. So charging appropriately is not at opposition with loving and supporting and taking care of horses, but it is what makes that sustainable. So I really, really encourage you, do the math. Just look at it. The numbers are not your enemy. The enemy is not knowing the numbers. So again, thank you for being here. If this episode helped you think about your pricing differently, send it to another equine professional who needs to do this math too. Word of mouth, as we've established, is powerful. I will see you in the next episode.