The Relationship of Time & Money in Your Business
You can’t talk about money and pricing without also talking about time. They are intrinsically linked to one another. My goal with this post is to get you to reframe how you value your own time and how to better price your products and services to reflect that.
Society has told you from a young age that you are merely a collection of hours.
The problem with hourly pricing is that it doesn’t account for SO many other aspects of your value. You are WAY more than just time multiplied by experience. Our first jobs may have ingrained this concept of “hourly pricing” in our heads, but it doesn’t apply to all industries – especially the creative industry or the online expert or knowledge-based industry. You should be paid for your creativity and knowledge! Not based on your time.
We’ve now seen that hourly pricing tends to heavily favor experience only and DOESN’T account for all the other components that make up your value. So now let’s examine why setting your prices based on a rough idea of how many hours something will take you, doesn’t work.
Charging by the hour: why it doesn’t work.
Charging by the hour benefits the client or customer because it allows them to compare pricing on a seemingly level playing field, apples to apples. But when you compare two products from two different businesses, it’s never apples to apples. There are many inherent differences, but when you charge by the hour, you are telling the client to only focus on price, you’re effectively telling them to ignore all the other aspects of your product or service.
When you charge by the hour, your client isn’t focusing on everything that encapsulates your unique value such as the actual problem your product or service solves and whether yours solves it better than someone else, your experience, your expertise, creativity, attention to detail, your customer service, who you are as the business owner. You are just telling them to only focus on the price and how it compares to everyone else.
Stop thinking of your worth and your price in terms of time or hours. You are doing yourself a massive disservice. Instead, start thinking more about the end result and the solution you are providing to your client.
Most of us incorrectly believe that money is worth more than time.
Yet here’s the catch: You CAN ALWAYS MAKE MORE MONEY BUT YOU CAN’T MAKE MORE TIME. Once it’s passed, it’s passed, it’s gone. Time is fleeting! We only get so much of it.
Your time is FAR more valuable than money and if you start thinking that way in your business, you’ll start making better decisions as far as both your pricing and your productivity.
So how do change our thinking around this? How do we start valuing our time more? What are some changes you can make RIGHT now in your business to start valuing TIME over money?
First, change your mindset. I have recently gotten a lot more into the mindset side of things and discovering new ways to change the way I think and I love using mantras because they are easy and effective. So you might decide on a couple of mantras such as “I am not merely a collection of hours” or “Money is abundant and I can always make more of it.” Anything that helps retrain your brain into focusing on your VALUE and that your time is more valuable than money.
Next, consider your strengths. What happens when we aren’t good at something as kids? We are told to practice and get better. But why? Shouldn’t we instead be spending more of our time doing what we do REALLY well? Take a look at everything you do in your business. What are the things that you ROCK at and that come very easily to you? What are
the things that you hate or that take you forever because they just aren’t in your wheelhouse? How can you take some of those off your plate so you can spend more time focusing on the things that you do REALLY well?
If you start implementing those changes, you’ll start seeing improvements in your bottom line. And even if you’ve done similar exercises before, I find both mindset work and evaluating how you spend your time in your business to be things to revisit OFTEN in your business.
If you are wanting more tips toward having your most profitable year in business yet, I’ve got a free training guide for you which you can grab here. In it, I walk through my top five steps to charge more for your products or services, increase your revenue, and finally have your most profitable year in business.