Episode 336: Show Notes
Today on The Strategy Hour we’re diving deeper into what exactly we mean when we say that is should be easy and fun to make $100k from your service based business, within a year. There’s a misconception that money cannot be earned without really hard work, and to an extent this is true, especially for certain types of businesses. But you also have to be smart about it! Just to reiterate, when we say it’s easy to make six figures, we are talking about offering services like copywriting, designing and photography. And this is by doing the basic work only, aside from all the other side offerings like podcasts and training courses.
In fact, you should keep it as simple as possible, focusing on doing one thing really well instead of doing a bunch of different things. These other ideas are not bad, but until you’ve done the one thing properly, you won’t enjoy its full benefits. We’re also guilty of this and we’ve seen many of our mentees battling with the same thing. Today we’re breaking this down in a way that we hope will help you not to fall into the trap of believing that diversifying will necessarily expand your business and make you more money. Whether you’re thinking of adding on products or offering more services, you think that the single solid service you’re offering will not get you to your financial goals. Today we’re busting that myth, and we’re going to show you have it is totally possible to achieve your goals by sticking to the basics.
The Undercharging Trend
There is this undercharging trend which will eventually lead to burnout, guaranteed. In the creative space, the majority of people charge an average of $250 per project. Just because you’re not offering everything does not mean that you have to ask less for your service. The average person in a creative service business can work with four or five clients a month. So if you’re only charging $250, you get around $1000 a month, or an annual salary of $12,000-15,000. How many of you have worked your tails off and looked back at the end of the year and realized that you would have earned more money working at Starbucks? That’s a dreadful realization. When you start calculating the hours you’ve spent on a project and what you got paid for it, you very quickly realize that you’ve been grossly underpaid. You deserve more!
Don’t Think You Can Just Work With More People
If you’re not making enough money, or barely making minimum wage, you might be tempted to think that you should take on more clients and up your work intake. No! If you start taking on more clients than that average four or five, you are going to get overwhelmed, frustrated at your job and all those other bad vibes will ensue. If you continue asking that little, you’re going to have to work with 200 people a year to even make $50,000. That’s an average of 17 clients a month, almost 1 person per working day. That is not sustainable unless you have a very specific business model. There are exceptions, such as when you cut and color hair, then this obviously does not apply to you. But the majority of you are working with a client over a longer period of time and they don’t typically need your service every month or two months as in the case with hairdressers.
What You Need To Look At Charging To Be Sustainable
If we’re going to make life a little more reasonable and go back to that four or five clients a month or 54 a year, which is still a high number, you’re getting closer to where you should be. If you’re going to be charging more and working with fewer people, you’d need to charge $925 on average per project if you want to get to that $50,000 a year mark. That is not crazy, despite many of you probably protesting. But hang on, we’re going to explain how it’s possible. When we first started we had nothing and we made it happen, and you can too. You should still charge more even if you believe that your people can’t afford it. It’s important to identify what you need to make to cover your bills and also live a good life. We say $100k because it really isn’t all that much money. When you are your own boss, there are taxes involved, you may be paying for insurance and there are a lot of expenses, and double that if you have a kid. There are so many costs to live as a human being and we want you to have just a bit more than the bare minimum. And $100k over 12 months is what that looks like. Besides, if that is what your business is making, that is not what is coming into your home, it’s not what you get to keep after taxes.
What You Need to Do to Get to That Non-Negotiable Figure
As a photographer, you might have studio rentals, a co-working space, backdrops, equipment and all kinds of props for weddings and baby shoots. That’s a lot of money. What you should look at once you know what you need to earn and once you have gone through the math, ignoring what past clients have paid you and the small town you may live in, you need to ask yourself what you should do to literally own that non-negotiable figure. How can you show up to make this seem like a no brainer? How can you package it differently to make it stand out and perfect the process and experience for your client? And remember, you don’t need to convince anybody of your service. You have to wipe out competition by being so different and by offering what no one else is. We all have strong perceptions about money and what to spend on, and we project that onto our customers. But they look at it differently. We almost self-sabotage selling our own thing because we’re good at what we’re selling, so we take that skill for granted and almost don’t see what it is actually worth.
Considering The Delivery Of Your Service
It’s important to keep in mind how we look differently at things depending on the scenario. What would have once been considered far too expensive and perhaps unnecessary might later in life be viewed as an investment. People will do things they said they never would simply because of how you present and package it. You have to create a favorable context for what you offer and put it in the best light for that client. So they might initially say no to something, but when portrayed in a different context, they might decide differently. In certain cases, they might be willing to spend that money on you but not on anybody else! You have to believe that people are going to buy what you are selling, so having the right mindset is the starting point. The number is irrelevant. How you present it, how you talk about its value and how you actually deliver value is what really matters.
The Undercharging Trend. [0:07:23.1]
Don’t Think You Can Just Work With More People. [0:10:10.1]
What You Need to Look at Charging to be Sustainable. [0:12:48.1]
What you Need to Do to Get to that Non-negotiable Figure. [0:19:43.1]
Considering the Delivery of Your Service. [0:25:31.1]