The age old expression, “Time Equals Money.” If I’m being completely honest, that phrase took me awhile to learn. It wasn’t just practicing time management, it was understanding the value of a dollar and putting a price tag on how much my time was worth. When you are not strategic, or smart in business, you lose both time and money. A lot of people live paycheck to paycheck and some of those are people are making desirable salaries. The people I am speaking to are those willing to throw away their time to make money so they can spend their money just to work more. It becomes a vicious cycle of relying on work to make you money instead of time making you money. We’ve all heard, “work smarter not harder.“
Ask yourself this question: Is your time making you money? I learned about time and money when I was hired to do an advertisement for a luxury clothing brand. It was one of my first dream clients. At the time I would have done the job for free because I was so excited to land the account. I’ll never forget when the client asked for my rate. I had an extensive portfolio but still didn’t feel qualified. The feeling of imposter syndrome when you think someone is out of your (business) league. When I sent the brand my proposal I offered more than they were asking and charged less than I would a smaller client with a lesser budget.
The days leading up to the shoot were overwhelming due to the amount of time I spent on R&D and building a deck. Neither of which I charged for. I spent twice as much as I charged the client for the entire job in prep alone. The good news is post production took less time than prep time and the client loved my campaign. The bad news: I only charged the client for one day of work and I worked five. In the end, I was thrilled to have my name attached to the brand, and pleased with how everything turned out. But I was disappointed that I undervalued my time and talent.
That’s when I learned, “time equals money.” If you are in the business of selling a service you are also selling your time and confidence in your deliverables. Product based services are selling time, too. When you factor in pitching, sales calls, product classes, etc. The time it takes for your services is inclusive of a list of variables. Depending upon the type of service you offer, some companies charge a minimum, others a fixed rate, some bill hourly, etc.
Think of you rate or value as the added interest required for your services. Perfect example, gas stations that allow you to pay with cash or credit card but charge a fee for using a credit card. Factor in your percentage when negotiating your rate. My rule of thumb is always charge 30% more.
No matter how easy a job seems, how quickly you can do it, or whatever ideal situation is at hand, things happen. Plan for the unexpected so you are protected and so is your time. Know what you are committing to before agreeing to terms, and ALWAYS overdeliver. Don’t up sell your services and underdeliver. Charge more, work smarter, exceed the clients expectations.
That job cost me more money than I made which taught me my boundaries in business. You do not have to accept every job you’re offered even if it is a dream client. Be selective with your partnerships. Sometimes we take non paying jobs for exposure or the hope that one day they will turn into paying clients which is okay. That’s smart business. Never lose money with one job and miss an opportunity to make money with another though.
By now you know if you are losing time and money. You’re probably asking yourself: “How do I gain both?” The answer: smart business and strategic planning.
Here are a just few ways you can be strategic and smart about your money in service based businesses:
- If your business offers a consultation, charge a consultation fee. It does not need to be a huge fee but keep in mind you are using your time to consult with them about their business goals. You can offer the first 30 mins for free and every 30 mins after at a fixed price. Or you can charge a fee for the consultation and apply it to their service if they hire you.
- If a job requires research bill for the hours spent researching. I cannot stress this enough.
- Always charge for revisions, changes, edits, alterations, mock ups, etc. Changes take time and you do not work for free.
- If a client wants to use your intellectual property for their marketing materials estimate how much revenue they can make from your materials and charge them based on that period of time. With that, if you are an influencer, model or business that deals with exclusivity, the same rule applies. Charge the client for any potential work you will be missing out on over the duration of time you are exclusive to them.
There are several ways to ensure your time is making you money. These are just a few basics to get you started. Next week I’m going to share ways you can make passive income, what that looks like, and how to make money when you sleep. Until then, get serious about your future and invest in yourself.
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