“Our rates range from $60 to $200/hour”
“I’m worth about $250/hour so I multiply that by three and charge $750.”
“Our flat fees are a multiples of our hourly rate.”
All of these are built on the belief that “time is money.”
But guess what?
Time is money is only a habit.
A habit or default practice that you’ve internalized over the years.
- Your firm charged its clients for time.
- Everyone in your industry talks about hourly rates.
- You were paid for your time.
- People thank you for your time.
- Companies you buy from charge you for their time.
You establish your own firm and default to charging for time.
This is poison to revenue growth and profit.
Your clients do not want to buy your time.
They want to buy solutions to their problems; pain relief; and the way forward to new opportunities.
When everything is reduced to “time is money” you all lose.
What happens when you do break this habit?
One company acts as a matchmaker between companies and outsourced workers. All the work is paid for by the hour. The matchmaker makes its profit from the premium buyers pay over the rate paid to the workers.
This practice is deeply entrenched, and the company doesn’t think there is currently an opportunity to change that.
However, the CEO believed there was a new opportunity.
Clients of the company would often ask for help determining the right size of the workforce. They would ask for help forecasting their needs, and budgeting to meet those needs. They wanted an expert to help them analyze the contribution of the outsourced workers and make changes based on the analysis.
This led the company to consider offering consulting or advisory services. They have the accumulated knowledge to make a difference to their clients.
But, they asked, should we charge by the hour like we do for the outsourced workers, or try a non-time-based pricing model?
One of the biggest “aha” moments came when the CEO asked “How do I charge for the time—a minute or two—when I had the idea that would make a huge difference to the client? I wasn’t at my desk; I was taking a walk. And it hit me! Surely there’s value in that!”
This company has broken its habit of hourly rates in order to increase its consulting/advisory revenue. It does a different type of discovery with clients asking for support. It determines what issues are top of mind with these clients, how significant they are, and a timeline for delivering differences. They offer a fixed fee for all the support needed within a specific period of performance.
Another client
Another client, a business advisor who was formerly a salaried corporate employee, fell into the time is money trap in the beginning.
She used her last salary as a benchmark, dividing it by hours worked to derive an hourly rate. Her words were “I think I’m worth $XXX per hour.”
When I asked what this means- “I’m worth $XXX per hour”- there was silence.
She understands that time does not have an intrinsic dollar value.
Then we moved away from that mindset to identify the ways in which her expertise helps her clients with their finances.
After listening to her talk, I said it seems that she helps business owners “see through the dark clouds of financials to the sun.”
We made a list of 6 ways that “seeing the sun” changes people’s lives for the better.
She adapted my Choice Framework to her company and now offers three options with different impacts and prices correlated to those impacts.
No more time is money for her! And her clients are raving about their own successes.
It’s possible to break the habit of defaulting to “time is money.”
The first step is entirely within your control:
It’s in your head and you can kick that wrong-headed belief out.
Then chose an alternative belief.
We:
- “Make a difference in our client’s lives.”
- “Help our clients live better.”
- “Show our clients how to make a difference for their clients and get paid for it.”
In the past several months I have helped companies break this habit and adopt a belief that increases revenue and profit.
If you’d like to enjoy that as well, what better time than now?
Text BELIEF to 703-801-0345.
