The call came at 7:45 on a Tuesday night. Just one quick thing.
It was a legacy account. One of the first clients we carried over from our old firm when we left to start Clermont, and one of the reasons we had the nerve to leave at all. To get them to sign with an unproven two-woman shop, we had discounted. Not a polite courtesy discount. A real one.
We took the call. We always took the call. And it was never one quick thing.
Here is what took us far too long to notice. The clients paying us the least called the most.
That is not a coincidence and it is not bad luck. When a client is getting a discount, nobody on that account has any reason to ration their access to you. So you get the Tuesday night call. You get the Sunday evening cram session ahead of a Monday of back-to-back check-ins. You get the urgent email on a Disney vacation that turns into a conference call by the time you reach the front of the line.
We thought we had a boundary problem. We had a pricing problem.
The math we should have run on day one
We had set a 30 percent profit margin as a nonnegotiable, because that was the number that separated a business we could scale from a job we had given ourselves. Every time we ran the model against our actual roster, we missed it. Not by a rounding error. We missed by a mile, and the legacy pricing was the reason.
So we went back to the market math. Our clients were US-based small and mid-cap public companies. Filtered down to the accounts we could realistically serve and win, we were looking at roughly two hundred targets. Two hundred accounts at our legacy price of about $90,000 a year did not get us to a 30 percent margin. It did not get us close. To hit the number, we had to be closer to $150,000 per client.
That is a terrifying sentence to type into your own spreadsheet.
So we checked whether the market would actually bear it. We dug into what competitors were charging and found that about a third of them were already operating in that higher range. Not the best firms in the category. Just firms. If a third of the market was already getting $150,000, the number existed. Our price was the problem, not the ceiling.
We sent the first proposal at the new price and then refreshed our inbox like teenagers.
We never got to $150,000 across the board. We got close, and we landed roughly 50 percent above where we would have been if we had played it safe. It changed our margins, our hiring timeline, our ability to fund the ESG practice later, and eventually what a buyer was willing to pay for the whole firm.
The hour that costs more
Raising the price fixed our margin. It did not fix the 7:45 call.
Beth missed her kids’ Brownies induction ceremony from a tarmac in Detroit, grounded after a client trip, listening on the phone while her cousin Licia held their hands and they crossed some bridge and promised something none of them can remember. Victoria missed Ali’s preschool Mother’s Day tea for a client investor day in New York, and got the FaceTime that night that every working mother can recite from memory.
Those hours were billed at the same rate as a Wednesday at ten in the morning.
That is the flaw in every hourly model and every underpriced retainer. They assume an hour is an hour. For a founder with kids at home, it never is. The 7 p.m. hour costs more to produce than the 10 a.m. hour. It costs more because of what you have to move, who you have to call, what you have to miss, and what it takes out of you when you sit back down at the laptop after bedtime. A rate card that treats those two hours the same is not neutral. It is quietly charging you the difference.
Three moves
Start with the margin, not the market. Pick the profit margin you actually need, then back into the price that produces it at a realistic client count. Most founders do this in reverse. They price off what a competitor charges or what a client seems willing to tolerate, then hope the margin shows up at the end of the year. It does not.
Validate the ceiling before you flinch. Find out what the top third of your market is already charging. If someone whose work you do not respect is getting the number, the number is real. That is the entire permission slip.
Price access as its own product. Our highest rates went to urgent, crisis-level work, because that is when clients will happily sign off on the cost to get themselves out of the mess they are in. The same logic applies to availability. The client who wants a principal on the phone at 7:45 on a Tuesday is buying something different from the client who is fine waiting until Wednesday. Put it in a tier. Put it in the contract. Do not hand it over as a favor and then resent it at bedtime.
The thing we wish someone had told us at the start: mispricing is not a revenue problem you can outwork. It is a time problem with a delayed invoice. Every dollar you leave on the table comes back to you as an hour, and the hours it takes are almost never the convenient ones.
If your pricing is not producing the margin you need, you are not being underpaid in dollars. You are being paid in Tuesday nights.
Entrepreneur Like a MOTHER comes out September 22. TThe full pricing chapter, including the model we ran and the numbers behind it, is Power Move #3 in the book.
P.S. If someone you know is in a hard week right now, forward this to her. No pep talk attached. Just this.
New here? Founders Files is a weekly letter for women building real businesses around real families. Subscribe to Founders Files here
