Monthly Archives: March 2017

Making Profit Saves Time

Most coaches and consultants undercharge for their work.  It is just as easy to overcharge.  If you are not finding clients perhaps you are overcharging, although it is usually not a good idea to bring your prices down.  I shall explore this in more detail next Wednesday.  Today I shall explain how making profit saves time.

Work Life Balance

We hear a lot about work life balance, primarily because so many people in employment work overtime.  When the demands of work are excessive, to the extent there is little time to do anything else, many people start to question why they are doing it.  The question may be a response to some life changing event such as a heart attack or diagnosis with a problem such as diabetes or stress.  Sometimes someone will simply realise other people have time to do stuff other than work.

The same applies when you are self-employed.  There may be fewer checks on your excessive working because you don’t have managers or colleagues to question it.

I met someone the other day who told me she can offer 3 one-hour consultancy sessions seven days a week.  That’s 21 sessions a week.  So, I asked her wouldn’t she rather work only 4 days a week.  She would – the question is: how?   She needs higher prices.  How to get to higher prices is a non-trivial question but at this stage I’m making the point.

You may be good at something you enjoy doing but the pleasure begins to pall if you have an endless sea of working days ahead with no let up.

Anything you do below the market value is an act of charity.  There is nothing wrong with that but understand what it means.  Imagine the balance sheet of a conventional business, where you subtract expenditure from income to calculate your profit.  If you work at a low rate or for free, you are in effect donating your profit.  If you work out the cost of your charitable work, you can add it to your income.

You may find you would make a profit if you charged for charitable work.  Now, there’s nothing wrong with pro bono work.  Many social enterprises do this and record the costs of what they give away as part of their profit.  This is sometimes called the triple bottom line, where you account for social and environmental benefits as well as financial profit.

There’s no reason a self-employed person can’t do the same but be clear.  It reduces your profit and increases the time you put into your paid work.  Perhaps it would be better to wait until you are making a profit and then spend it!

Spending the Time Profit Generates

So, let’s consider the time you spend if you have time to spare.

First, the internet marketing gurus will tell you about the wonderful leisure activities you can partake in once you have money.  You can pay for staff, not only for your business but also for domestic life.  Staff free up time.  Now you can sit back and enjoy life!

Of course, life isn’t like that.  Leisure time may be eaten up by domestic responsibilities.  You could employ a nanny to look after your children.  Is that what you really want?

So-called leisure time is the time you need to pay attention to other aspects of life.  Family, health, education are all aspects of a fulfilled life.  They are essential and you will certainly feel pain if you neglect them.

Employing staff is not a bad idea.  I won’t enter into the pros and cons here but point out something you may not have spotted.  When you have time freed by your higher income, you have more time for your business.

The business owner I mentioned earlier explained if she filled 21 sessions, she would have 60-80 clients.  Now I think these would be 60-80 unhappy clients.  If she could generate income to cover her needs from just a few clients she could spend more time with them (they’re paying her more remember), do research on their behalf, improve her skills through training and genuinely have time to develop her business.

The extra staff may not be needed; the extra time may be sufficient.  But staff do free up time you need to do what you do best, while they do the routine stuff you don’t really need to do but do now because there is no-one else to do it.

And with more time, you can invest further in your community.  I shall write about spending money on charitable or community work in a later post.  With more time you can afford to seek new investments of time or money in projects that interest you and benefit others.

Conclusion

So, more time for leisure and family, for doing your business better and for making investments in your community or charity work.

The challenge is to get there.  I may move onto this in later posts.  My non-directive consultancy specialises in how to get into this enviable position.  I’m happy to talk to anyone interested with no obligation.

Let me know if this post is helpful and if you have any questions for me to write about later.

What is Your Prospect’s Ability to Pay?

Your prospects’ ability to pay is a vexed question.  You need to make a living and so set your prices at a realistic level.  Your prospects may not be able to afford them.

Here are two perspectives to consider.  Yours as a business owner and your prospects who may also be business owners.

Generally Coaches Charge Too Little

Many coaches and consultants charge too little.  Sometimes this is because coaches structure their business on sessions and there is a limit to the amount you can charge for an hour’s coaching.

The alternative is to sell the benefits of your coaching.  This means you charge according to the value of your offer to your prospects.  Success depends on how you market your offer.

Most websites take up a lot of space describing features and relatively little demonstrating their benefits.

So, how much should I charge?

First, do not associate your prices with the time you spend working for the client.  Your client has no way of knowing how much time you put into your business. The idea contact time is what they pay for is absurd.  Think about the time you spend preparing for meetings and following them up.  In addition, there is the time you spend building your skills and your business.

Benefits transform the way you think about your business.  I know people who have increased their prices, decreased the time they work for their clients and as a result increased their sales.  Why? Because overall they improved their offer.

If you can decrease the time per client and increase the quality of your service, you can increase the number of clients you serve.  But maybe you don’t need to if a few clients on higher prices is all you need to break even.  A lot depends on marketing an irresistible, well-targeted offer.

When should you increase your prices?

As often as you like.  Some people increase their prices once a month or quarter.  Usually by a small percentage.  This means they are confident their offer is similar to the previous month’s but over time income per client grows significantly.

You can increase your prices if you are getting a lot of prospects.  Your focus is on those who can afford your prices.  Others who can’t, will look elsewhere.  Fewer clients at higher prices means you have time for other activities.

Another possibility is increase both the quality of your offer and your prices.  One possible objection to high prices is false modesty.  You undervalue your own business when your prices are artificially low.  You’ve worked hard to develop a valuable offer and yet fear to ask a realistic price that represents the work you’ve put into it.

What Kind of Investment Will This Represent?

Higher prices increase the numbers of prospects who cannot afford your offer.  Or so you think!  More prospects have ability to pay than you think. There are three possibilities:

1. Affluent prospects can afford your prices. They may think they have a bargain.  Don’t even think about telling them they haven’t.  You are offering them a benefit they want and they are willing to pay for it.
2. Some prospects walk away because they genuinely cannot afford your offer. You may make a referral to someone cheaper, a simple and helpful move.  Or perhaps you can develop a low-end offer that does not deliver the same benefits but satisfies those who cannot afford the full service.  Low-end packages are opportunities for wealthier people to try your services too.  Once people have purchased from you, they are likely to do so again.
3. There are people who think they cannot afford your offer but really can! They may not be used to paying consultants’ fees and baulk when they first hear it.  Your task is to help these people decide this is right for them.  You need to be confident in your own mind they will find genuine benefit from your offer.  Your fees may be a significant investment in their business or their lives and so you need to honour the sacrifice they make for their business.

Sometimes prospects need time to decide.  Put a time limit to this period.  You need to know when an offer you have made has expired.   This allows you to move on.

Sometimes people say “No for now” and may approach you again at a later date when they have explored other options.

The Thing to Remember

The key is your marketing and the attractiveness of your offer.  When someone turns down your offer, it is not always they can’t afford it.  It could be the problem is in your presentation of your offer.  Prospects have been known to claim the price is too high and then go with a coach with even higher charges.  The key is how well you sell and not so much your charges!

Let me know if the topic of this post has been helpful.  If you would like me to expand on this topic in any way, I’ll be happy to have a go!

Why You Must Grab Opportunities

This is the advice: identify, target and grab.  To be successful in business (and in just about anything) you must grab opportunities.

Is it ethical to grab opportunities?  You want me to put in less forceful language? Would you be thinking about ethics if I said you must take opportunities?

Look, I’m not suggesting you break the law or snatch lollipops from the hands of small children.  I suspect most of our objections amount not so much to grabbing as failure to grab.  What if something goes wrong? What if they reject me?  If rejected, be pleased you made the effort!

Identify, Target, Grab

So, be present and aware of opportunities as they present themselves. Identify opportunities to meet people interested in your offer. You attend a network meeting, with a room full of people, and any may be potential opportunities.

If there are a lot of people present, find out who may be interested in your offer.  Perhaps you will hear their pitches.  Target 1 or 2 people and be sure to talk to them.

Have a conversation and make them an offer.  Note the word “grab” is actually a metaphor.  You haven’t actually grabbed anything.  But you have acted decisively.  Do it often enough and your business will be a success.

Awareness

I deliberately chose “grab” but could just as easily written about the need to be present in any situation.  Awareness is the key to any business, so you can act when you find an opportunity.

One of the issues that bedevils marketing is the use of language. The language of grab is common and conforms to a masculine worldview.  The language of presence or awareness conforms to a feminine wordview.

At least, that is what we are led to believe.  Masculine and feminine are perhaps helpful shorthand but the truth is more complex.  These distinct approaches to the same thing are commonly associated with male and female but in practice they are associated with personality types and not the sex of the person using them.

The question is which language builds community?  We cannot sustain a world where grabbing for myself is the norm.

Please let me know if this post has been helpful.  I’d be happy to expand on any of the issues raised.