Valuing Your Time

The biggest challenge that many entrepreneurs face, myself included, is the concept of valuing your own time. Obviously there are a lot of businesses out there that seem to have mastered the concept of assigning dollars the their valuable time (read: lawyers), but for many of us its a forgone concept that must be learned in order to make your business a successful one.

For consultants, the ones who aren't engineers in this city anyways, it is important to do your market research before setting your charge out rate and being realistic about the fact that as a new market entrant you may have to price yourself at a discount to the competition. I once spoke to a now very successful entrepreneur and he told me that even with his many years of experience, his strategy was to enter the market charging literally nothing for his services and only request that if clients are happy with his service, they emphatically refer business to him. You certainly don't have to do this, but he did and it worked for him.

But as your business becomes established it is very important that you use pricing as a lever to manage how much of your time you devote to your work. If you the phone isn't ringing, either you increased your price too quickly, or you are pricing so low that people don't believe you offer value in your product or service (I've seen this happen, to lawyers no less). Likewise if the phone is ringing off the hook, its probably because your services are on a permanent fire sale. Again, this is why its important to do your research on market rates and benchmark off of this, if you find the market charge out rate is in the ballpark of $100/hr, charging $75/hr as a new business is not unreasonable if you are on your first client, but if you feel you offer comparable service, don't be shy to start notching your rate up there.

Enter shameless plug for our marketing company. redlime takes a very strategic approach to marketing and we strongly recommend entrepreneurs or emerging business do their homework on the market, or have us do it for them. Having a solid pricing strategy and marketing plan is a critical component to the survival of any business, its something that we take very seriously and urge you to as well.

If you'd like to pick our brains about what we can do for you, give us a a call or drop us a note!