In: Money Talk,
I have a couple of friends who are working themselves to the bone.
Like, physically, their fucking fingers are falling off.
They're designers and writers; coaches and service providers, and they are doing whatever it takes to make it work.
Unfortunately, “whatever it takes” often includes:
» Taking on one hundred little small jobs all at once for peanuts
» Confusing overdelivering value with overdelivering time
» Running themselves ragged in a constant flurry of overwhelm
» And letting their clients run their business for them. Whatever the client says, goes. They want a discount? Sure, I'll be happy to! They demand a meeting during your peak creative time? No problem! They hold up the project by disappearing for a few weeks? It's okay! That's what I'm here for!
It's not okay. None of this is okay.
It's not okay because, most importantly, you aren't enjoying your business—you're resenting it.
And that's the first indicator you need to re-evaluate some things.
Note: I didn't say throw in the towel, chug a bottle of wine and give up feeling defeated. I said re-evaluate. Tweak. Experiment. Pivot. Try something else. You couldn't possibly have known then, what you know now, so use that to your advantage. Use it to get clear, and get cocksure. Sometimes, figuring out what we don't want is the quickest way to figure out what we DO want. (As I'm sure anybody who's ever been in a nightmare relationship with a jealous, insecure, controlling, psychopath of a person can testify.)
Second, you can't run a business by letting yourself get dragged around by the hair, whimpering and hoping and praying.
That isn't running a business—it's running yourself into the ground.
You're the professional, you're in charge, and it's up to you to set your boundaries, your expectations, and your standards. Your clients will follow your lead. If you decide to raise your rates, for example, nobody's going to point fingers and start a town picket yelling that you have no right to call yourself a professional. (And if they do, call me. I'd love to handle that PR.)
You're going to lose everything anyway if you don't get some sanity, so what are you so afraid of?
And last but not least, it's not okay because it's not profitable.
And not being profitable is a perfectly good reason not to do something. Who are you, Mother Teresa? Do your charity work on your own time—not your business'.
You hear a lot of people running around saying, “Charge what you're worth!” but that's not the problem. The problem is that you don't know what you're worth.
Because instead of looking at pricing objectively, in terms of the value you bring to the table, we all tend to look at pricing subjectively, and let girly shit like hormones determine our self-worth…which is different from your actual business worth. Seriously, don't set your prices on your period, okay? It's dangerous.
Should you turn clients away if it doesn't make sense for you financially? YES. But in order to do that, you've got to know when something does or doesn't make financial sense for you.
Remember when you used to be able to walk to the corner store and buy Swedish fish for 2 cents each?
This was a religion for me as a child. If you managed to smooth talk your mom into giving you fifty cents, you'd end up with a little paper baggie containing TWENTY FIVE SWEDISH FISH, MAN. Enough to last you five whole blissed-out minutes.
While that was a great deal for the 10 year olds of the neighborhood, you know who it wasn't a great deal for? The shop owner.
The guy had to spend his time counting out my Swedish Fish and making other customers wait who intended on buying things like bread and milk and pogs and other high end corner store items….all for fifty cents. And I've got news: Fifty cents ain't payin' the rent.
That might be cute and nostalgic, but that doesn't make it sound business. You've got to stop trying to be cute.
A more financially sound alternative might have been to charge $2.00 for a bag of fifty…and have 'em pre-packaged in their brown baggies and ready to roll. While that may only increase your perceived margin by 2 cents each, you earn an even bigger benefit: The kid who only wanted ten Swedish fish (which would have previously earned you only 20 cents), now has to cough up $2.00 if he wants the goods. Even if he only eats ten, you still made $2.00. And that's an added margin of $1.80.
That isn't selfish. You aren't getting all Communist. You aren't keeping ALL the Swedish Fish ALL to yourself. You're merely placing a more accurate value on their worth, and finding that happy medium between what a consumer is able to pay, versus what you're able to sell them for.
Because guess what? You're selling something in demand, and it's the demand that sets the price. If you have people coming to you for your services, you have demand. And that means you aren't able to sell Swedish Services for 2 cents each. It would break the law of supply and demand.
And you don't want to break laws, do you?
This, of course, goes back to the discussion on what your services are objectively worth. (Not their menstrual cycle worth—their real, market worth.)
The value of a bag of Swedish Fish is not its exact penny-for-penny value; it's what a customer who's craving them is willing and able to pay.
Similarly, the value of your services is not its exact hour-by-hour breakdown. Rather, it's what a customer who wants them is willing and able to pay.
Usually, that number is based on what they stand to profit from working with you.
What's in it for them? And how can you translate that into a number?
This might be more challenging for people like life coaches, who often deliver intangible, non-numerical results, but it can be done. Consider the argument this brain scientist makes in her book, “Make Your Brain Smarter: Increase Your Brain's Creativity, Energy, Focus” when linking the value of her services (brain health) back to hard numbers:
What happens today is a paradox: we are working longer hours in school, at home and at the office; yet, qualitatively, we are less mentally productive than we should be— a clear case where more is not better. The brain can be overworked, just as the body can. With the brain there is always a trade-off, a balance to be reached. To capture the linkage between our cognitive brain potential and productivity and our financial wherewithal, I coined the term “brainomics”. This addresses the high economic costs of low brain performance, and the immense economic benefits from maximum brain performance.
Brainomics represents the attainable benefit of your richest natural resource— for personal, professional, and global gain. Increasing brainpower by even small degrees will produce immense tangible and rewarding intellectual returns on investment. For example, economists have determined that the high economic burden of stalled or low brain performance currently costs an estimated $ 100 trillion to our national gross domestic product (GDP) bottom line. Failing to close the gap between your brain potential and your actual performance costs you personally; it costs you professionally; it costs your family; it costs your company; and in short, habitual low brain performance takes its toll on your capacity to perform and maintain a high level and has a significant negative impact on your bottom line.
In other words, if having a slow brain is costing you $100,000 every year, either because your productivity sucks, you procrastinate too much, or the creative ideas aren't flowing, then it's reasonable to spend $10,000 to help fix the problem. $10,000 is only 10% of $100,000, and it's a one-time fee. Compared to the lifetime value of a more productive brain, that might be a sound investment for a client—not one they're going to balk at.
Knowing what's in it for your clients from a numbers perspective is the starting point for figuring out what your actual worth is to them.
Ultimately, you got into business for yourself for the benefits of being in business for yourself: Flexibility, creative freedom, earning potential, career satisfaction.
But if you aren't careful, all of those things can turn into a double-edged sword just as easily: You won't grant yourself any flexibility, you'll hesitate to exercise creative freedom, you be too scared to explore your earning potential, and as a result, you'll be left right back where you started: Without much career satisfaction.
Don't do that to yourself.
Life doesn't come in Size Easy. But you do get to pick your hard.
And when the available options come down to hard because it's something new, or hard because you weren't brave enough, I hope you'll know remember that the reason you did this at all…
Is because new is exactly what you needed in the first place.