There’s a lot of confusion about value. Your value and the value of those you hire to help grow your business.
We tend to overestimate our own value and underestimate the value of others.
We want to get paid a fair rate and seek to cut our expenses by not paying others their fair rate.
I call this “bad money karma.” What goes around comes around. If you aren’t paying your support team fairly, why do you assume others will treat you any differently?
I wholly believe that my acceptance of fair rates from my VAs and other support staff is why people pay my rates.
In 2014, I’m going to ask you to take a hard look at your perception and experience of “value.”
A lot of the work we do is hard to put a monetary value on. When someone goes to a therapist, what’s the difference in value between someone charging $45/ hr and someone charging $150 for that same hour?
You’re not paying for the hour. We assume we are paying for their expertise, skills, knowledge.
Wehn you set your rates, you need to look at them from the viewpoint of your potential client. They price shop because it’s very hard to measure the value of what they receive in exhange for their monetary investment.
When you invest in your business it can be easier to determine the value of your investment.
If you buy business cards that cost $100 and someone calls you after they receive your card and become a client that pays you $500 over time, you have a $400 return on that investment of business cards.
Similarly, if you invest in a $1000 coaching program and use that knowledge and support to develop a program that generates $5000 in revenue, you have a $4000 return on that investment.
The tricky part is that many people look at the cost upfront and don’t consider their return on investment down the road. When someone sees something costs $200 all they see is money going out the door. They don’t follow the line of thought that their $200 investment could lead to thousands in income a few weeks or months in the future.
What people often do is invest on the cheap. Rather than invest $1000 in coaching, they buy a $97 information product. Then join a $29/month informational membership program. When they don’t make forward progress in their business, they invest in another lower cost program, join another membership program and over the months and years eventually invest over $1000 with little to show for it.
This is not to suggest throwing all your money into one approach is best.
I’m suggesting that you take a hard look at value and potential ROI before making investment decisions. Sometimes costs are best “front loaded” so you have a robust foundation upon which to build your business and track a faster path to profit.
Beware of bleeding out costs over time that give you very little support and ultimate ROI.
Value matters. Generate good money karma. Invest in yourself and others fairly. Respect your clients and potential clients by giving them fair value for their investment. This approach is what will build your business now and into the future.
Ready to generate new business in the New Year? Join me for my new FREE webinar, “New Year, New Business: 12 Ways to Grow Your Small Business in 2014.” Click here to read more and register.