The Legacy Pricing Method
Price your services based on the value you create, not your self-worth fears
The Legacy Pricing Method addresses the deep psychological and cultural roots of underpricing that afflict many minority business enterprise owners. It recognizes that pricing is not just a math problem but a self-worth problem. Many MBE founders internalize messages that they must work twice as hard just to be seen as average, which translates into business as pricing their services far below their actual value.
The framework reframes the narrative: being twice as good does not make you average; it makes you excellent. And excellent service commands premium pricing. The method connects your pricing decisions directly to the legacy you want to create for your family and community. When you underprice, you cannot hire quality help, you overwork yourself to compensate, and your business cannot sustain the generational wealth you set out to build.
The practical application combines mindset work with the Profit First allocation targets. By working backward from your desired Owner's Compensation and Profit percentages, you can calculate exactly what you need to charge to build a sustainable, legacy-creating business. If your current pricing cannot support your TAPs, the pricing must change.
- Being twice as good makes you excellent, not average; price accordingly.
- You cannot simultaneously be the cheapest and the best; choose one or fail at both.
- Underpricing is not humility; it is self-sabotage that prevents you from hiring quality help and building a sustainable business.
- Your pricing determines your legacy: low prices mean no profit, no wealth, and no generational change.
- The stories you tell yourself about your worth become the prices you charge the market.
- Identify Your Self-Worth StoriesExamine the narratives you carry about your value in the marketplace. What messages did you receive growing up about money, worth, and belonging? How do these manifest in your pricing decisions? Write these stories down honestly.Pro tipWhen the author interviewed successful entrepreneurs of color, none cited skin color as their biggest obstacle. The barriers were internal: time management, understanding financials, and trusting their own spark.WarningThis is emotional work. The stories we tell ourselves about our worth are deeply ingrained and often invisible until examined deliberately.
- Calculate Your Legacy PriceWork backward from your Profit First TAPs. Determine the Owner's Compensation and Profit percentages appropriate for your revenue range, then calculate what you would need to charge each client to achieve those targets. Compare this to your current pricing.Pro tipIf your current pricing cannot support at least a 1% profit allocation plus fair owner's compensation, your pricing is the primary problem to solve.
- Reframe from Cost-Based to Value-Based PricingStop calculating your price based on what competitors charge or what you think clients will pay. Instead, calculate the value your work creates for clients. What problems do you solve? What outcomes do you deliver? Price based on the value of those outcomes.Pro tipTheresa's IT company charged premium prices because she brought the best talent to the table. Clients who worked with her did so because of the quality of talent, not the lowest price.
- Release Low-Margin Clients and Raise PricesCommunicate your new pricing to existing clients. Some will leave; this is intentional and healthy. The resources freed by departing low-margin clients can be redirected to serve high-value clients better, attracting more of them.Pro tipAfter raising prices, reinvest the additional margin into hiring quality help and improving service delivery. This creates a virtuous cycle of higher quality leading to higher demand.WarningExpect resistance from clients accustomed to your old pricing. Some will push back hard. Stand firm in your new pricing or negotiate only on scope, never on your rate.
- Invest in Quality to Justify Premium PricingUse your improved margins to hire 'A' players, invest in technology, and deliver exceptional service. Premium pricing is only sustainable when backed by premium value delivery. Create an environment where top talent wants to work for you.Pro tipTheresa offered health insurance, 401(k) plans, and remote work because she knew that A players can always earn more elsewhere. Be an employer of choice.
Michelle was a decorated MBE owner with seven-figure government contracts, national awards, and a Goldman Sachs grant. Her financial records were in shambles and her take-home was under six figures. Theresa inherited an IT company and focused on recruiting the best talent, paying them well, offering benefits, and charging prices that reflected the quality of work delivered. Theresa walked away from wrong opportunities to preserve resources for right ones.
At a minority business networking golf event, Susanne felt embarrassed pulling up in her dented Honda CRV among luxury vehicles. After becoming the accountant for many of these MBE owners, she discovered the average take-home for their seven-figure businesses was around $50,000. Many qualified for the earned income credit, a tax benefit designed for low-income workers.
Susanne Mariga's father told her as a child: 'In America, if you are one-eighth Black, you are Black. You will have to work twice as hard, and be twice as good, just to be seen as average.' Though well-intentioned, this message taught her she was 'less than' and led to chronic overwork and undercharging throughout her career. As an accountant for MBE owners, she routinely saw seven-figure businesses with take-home pay of $50,000 or less. At the annual golf event, MBE owners drove luxury vehicles but their tax returns told a devastating truth: they were earning less than the country club staff. The turning point was realizing that the tale of two entrepreneurs (Michelle vs. Theresa) came down not to talent but to pricing and self-worth.