To recap the opening premise for this series, when presenting in front of a “live studio audience,” I always feel the gaze of a sniper with a finger on the trigger if I pause or stumble, so I keep right on going and frequently skip cool stories or points. Also, after 4 WordCamps, I’ve yet to have a presentation without a technical issue. Each affected my notes or ability to go to the next slide remotely.
This is Slide 3 from WordCamp Orlando 2014: Being More Profitable in WordPress.
Time ≠ Value
In no case with custom work or expert support does time equal value. Period. I hope I’m not being unclear on that point.
Value = Value
What something is worth with our industry is strictly determined by what someone will pay for it. It doesn’t matter what we say something is worth if we can’t find anyone to sell to. A Bugatti Veyron is only worth over $1,000,000 if people will pay that much, but material goods – physical goods – are at least worth the value of the material used.
A sure thing: taxes
Each year, I don’t really care how much time it takes for my CPA to prepare our taxes for the IRS. We spend time filling out his forms and sending his packet back, but after that, I don’t care if it takes him 3 minutes or several days to fill out the documents to send back to us for approval. I really don’t. After the first year, we realized the difference in what we were going to have to pay submitting on our own versus what he found by using his experience specializing in small business taxes.
His value to us is the value he brings us in time saved on our end and the money saved us by not paying the government one single cent more than we have to.
You’re doing it wrong
If you’re billing by the hour, you’re doing it wrong. No way around that.
Hopefully you’ve found a way to become more efficient at what you do. #AMIRIGHT? So, if what used to take you 4 hours now takes you 1 hour, what have you just done to yourself? Right. I don’t even need to say it… but I will. You screwed yourself.
The work you do or information you provide has value. It has a combination of the value you place on your work and the price people will pay for it. Somewhere in there is a maximum, mutually agreeable price.
Start with a goal
Your pricing should start with your household budget if you’re a solopreneur. You need a living wage and everything else should go to expenses, taxes, retained earnings for growth and savings, and giving.
We have a goal thermometer on my whiteboard. “Needs” is our budget. “Goal” is (Needs)2. “BHAG” is (Needs)3. Hitting my goal gets us wiggle room and some flexibility for software or services. Hitting the BHAG is for retained earnings and equipment replacement. Because what person in my chair behind my desk doesn’t think a Mac Pro is a good business tool? *looks around, sees no one raising a hand*
Without goals, how do you know how well you’re doing? Even if you’re wildly successful in your finances, goals will only make you more so.