Posts

BIGG Success Logo boxed

Making More Money Per Hour

time_money_balanceBigg success is life on your own terms. Today’s topic really covers two of the five elements of bigg success – time and money.

Specifically, we want to discuss charging for your time. If you’re a consultant, a coach, a freelancer or anyone who bills hourly, how do you determine what an hour is worth?

___

___

One of the biggest reasons small business people don’t reach bigg success is because they don’t charge enough. In fact, in many cases, the business fails for this reason.

So pricing your service is very important. We can think of two primary methods to arrive at a price:

The Market Approach

This is probably the most common way that entrepreneurs arrive at a price. With this method, you simply look at your competition to see how much they’re charging. Then depending on your strategy, you charge the same, a little more or a little less.

The Cost Approach

Here you determine how much you need to charge based on your cost structure and your opportunity costs. By opportunity costs, we mean:

How much could you make working elsewhere?

Add your hard costs to your opportunity cost to arrive at your price per hour.

Limitations

The downside to just using the Cost Approach is that it ignores the market. For instance, your price may be a lot lower than the market but you wouldn’t know it because you haven’t looked at the market. You would be leaving money on the table.

Or it may be a lot higher and the market won’t compensate you what you the amount you need for your time. The result would be a failure that could have been avoided.

The Market Approach also has its limitations. We have a friend who looked at his competitors’ hourly rate to determine how much he should charge. He opened up his shop and started losing a lot of money every month.

He was perplexed, so he did a little more competitive research. He discovered that all of his competitors were losing money as well. Everybody was in a price war; nobody was charging enough to make money.

So he increased his price based on his costs. He lost some customers when he did this but he started making money.

Because of the limitations each method has, we recommend that you use both methods when you’re trying to arrive at a price for your service. Then you’ll have two reference points from which to make decisions.

The Value Equation

Now we want to move to making more money per hour. From the customer’s point-of-view:

Value = (Service x Quality) / Price

From this equation, you can see that there are three ways to increase the value to your customer:

  • decrease your price
  • increase your service level
  • improve your quality

Of course, decreasing the price will very likely hurt you in the long-term. Look at it this way – do you want to work just as hard to make less money? Of course not. Yet a lot of small business people do this first.

So you would prefer to increase the value to your customer by providing a higher level of service or quality.

Let’s focus on service since quality is more up to you. Think about these four D’s:

  • dirty
  • difficult
  • dangerous
  • designed

By designed, we mean customized but we had to have a “d-word”! Dangerous might mean “risky”. However, keep in mind that risk is a matter of perspective. The customer may view something as extremely risky but you know how to manage the risk so it’s not really risky at all for you.

Here’s the key to these four D’s: Find something that your customer
doesn’t want to do, doesn’t know how to do, is afraid to do or just simply can’t do.

When you can do that, your customers will perceive more value for your service. You’ll find it easier to charge a premium. That’s more money per hour. That’s bigg success!
 

___

Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

___

Thanks so much for checking in on us today. Please join us next time when we’ll talk about the downside of education. Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00422-062309.mp3

Related posts

Make 55 Percent More Money – Part 1

Make 55 Percent More Money – Part 2

(Image in today's post by hisks)

BIGG Success Logo boxed

Mixing Work and Play

work-play.jpgFortune does a great job every year of compiling the 100 best places to work. They put out the list for 2009 a little while back. We found their top pick this year interesting.

NetApp, a data storage and management company, knocked Google out of the top spot for the first time in three years.

You can find a great video about NetApp on the Fortune site. NetApp invests time and money to create a culture where people want to work. The video shows people playing volleyball and working out in the company gym. It sure doesn’t look like work!

___

___

They do more than encourage play time at work

NetApp has a program that pays employees to take time off to volunteer for something they’re passionate about. They’ve found that employees sometimes come together to work on a cause. So this program has helped build teamwork among their people.

You may be thinking …

“Well, this is great but it sure wouldn’t work in my business.”

___

georgeI understand why someone might think that because it wouldn’t have worked in the businesses I was in before we started Bigg Success. Most of our people were in the field. We didn’t need a gym – the work was very physical so most of our employees got a great workout with their job. We were lucky to see most of our people for fifteen minutes a day. But the details of what NetApp does aren’t really important.

___

___

marylynnYeah, it’s the idea behind what they’re doing at NetApp that we think is most interesting. Bigg success is life on your own terms. The leaders of the company are certainly doing that. They set out to build a great company by creating a great place to work. The founder says that they took a leap of faith and spent time and money to create this incredible environment for their employees.

___

That’s three of the five elements of bigg success right there – growth, time and money! But they hit all five because they have found ways to let their employees play at work.

Now isn’t that an interesting idea? Work doesn’t have to be … work.

Something magical happens

In the interview, NetApp’s founder talks about energizing people. They think when people feel good – when they feel motivated – something magical happens.

That’s why we’re talking about them today. They are a great example of something that’s critical to living our lives on our own terms. It’s the bigg idea behind bigg success:

You create synergy between the five elements of bigg success by understanding the relationship between them and discovering ways to get them all working in sync.

Our lives are fuller when we’re able to do that.

We work to make money so we can afford to play. But what if you can work and play all at the same time. Isn’t that so much better?

What if you loved your work so much that it seemed like play? What if that work paid you enough to buy everything you really wanted?

NetApp took a leap of faith that’s paying off for them. Sure, they’re being affected by current economic conditions. But their market share has gone up in spite of it.

It can happen to you too. In your life. In your business.

Look for ways to blend the five elements for your benefit. That leads to bigg success!

Have you found ways to blend work and play?

You can share that with us by leaving a comment below, calling us at 888.455.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

Thanks so much for stopping by our site today.

___

Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

___

Bigg success is life on your own terms. Please join us next time as we discuss ramping up your savings one term at a time.

Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00370-041009.mp3

Related posts

Stop Trying to Fit into the World

Taking Time Off to Get More Done

Why Work Life Balance Doesn’t Work

(Image in today's post by svilen001)

BIGG Success Logo boxed

A Paint Roller Helps Manage Change

life on your own termsChuck e-mailed his bigg challenge to us. He’s starting a new job next week. It’s his third job as a manager. In the position he’s leaving, he feels he made too many changes too quickly. It created a problem with his directs. He’s hoping we can offer him some suggestions as he gets ready for his new job.

___

___

As bigg goal-getters, we often want to change things too fast as leaders and even in our personal lives. We think we need to lose weight so we jump into an exercise routine and completely change our diets. It’s too much and we end up right back where we started.

We have to be especially careful with change when it affects others. Like in Chuck’s case, any changes he makes will affect one or more of his employees.

Two of our rules for change here at Bigg Success are:

“That’s the way we’ve always done it” doesn’t mean it’s the best.

“That’s the way we’ve always done it” doesn’t make it wrong.

Change is essential to make improvements in our lives and our businesses. We want to focus on the changes that will make the greatest impact given their cost. When we talk about cost, we mean your investment of time and money – two of the five elements of bigg success

___

Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

___

Get out the paint roller

We heard a suggestion some time ago from a person who had learned to manage change effectively. He said that when he takes on a new leadership position, the first and only change he makes is to paint a single wall of his new office.

He feels like he’s changed something. It relieves that pressure. Everyone around him can see that he changed something. In fact, they often ask, “Why did you paint that wall? Why that color? Why just one wall?” It makes them curious.

You may make a different, but similarly insignificant, change. By doing this, you’re really buying time to find out what is and isn’t working while subtly signaling that change will happen.

Once you find out what isn’t working, you can determine which changes to make in what order based on their impact on your organization … or your life!

What are your suggestions for Chuck?

You can share that with us by leaving a comment below, calling us at 888.455.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

Thanks Chuck for sharing your bigg challenge with us and good luck with your new gig! And we thank you for reading our post today.

Join us next time as we share a remedy for one of the most discouraging thoughts you can have.

Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00362-033109.mp3

Related posts

3 Questions for a Brighter Future

Making Change Work

Does Haste Still Make Waste?

(Image in today's post by anitasweb)

BIGG Success Logo boxed

Is Convenience Busting Your Budget?

time-money The good people at CareerBuilder recently posted the results of a survey of workers. Forty-seven percent of the people surveyed said they “always” or “usually” live paycheck to paycheck.

___

___

Does more money help?

One way to stop living paycheck to paycheck is to make more money. Forty-two percent said an additional $500 each month would help make ends meet.  Fourteen percent already work more than one job.

The amount of money that comes into a household does make a difference, but not as much as you might think. Twenty-one percent with salaries of $100,000 or more said they also live from payday to payday.

We’re working ourselves to death instead of thinking about the other solution to the more month than money problem. We need to look at our lifestyle. We’re so busy trying to make more money to support our lifestyle that we end up spending money we wouldn’t need to spend if we just slowed down and honestly assessed our situation.

Convenience expenses

We’re so busy that we spend more money on “convenience expenses”. We define convenience expenses as the premium we pay for goods and services because we don’t have time.

So we end up in a downward spiral – we work more to have more, but then we
spend more and we don’t have any time to figure out how to do anything differently.

One example of a convenience expense is that we eat out more than we plan to. An appointment runs long. We get stuck in a traffic jam. The boss needs to talk. The next thing you know it’s late. Now we feel we have no choice. We’ve hit that wall. We’re hungry now! We’re too tired to do anything but grab some carry-out or order delivery.

Cutting back

It may seem like a small expense, but it eats away at your budget (pun intended). If you’re feeling like we’ve described you perfectly, don’t feel like you’re alone. We’re right there with you! Here are some ways we’ve found to cut back on this convenience expense:

Always stock some food that’s easy to stick in the oven or microwave.

Then if you’re running late, you can have less expensive convenience food. Plus you’ll save the time of stopping or running out for carry-out.

Plan for leftovers

If our next week’s schedule looks busy, we’ll cook up a little extra food on the weekend so we have leftovers which can be nuked in a matter of minutes. These leftovers are also an excellent way to save money on going out for lunch. There are more productive ways to spend a lunch hour than driving back and forth.

Invest time today to save money tomorrow

By planning next week’s meals, you can find coupons for the items you want to purchase. It’s like printing money legally as we learned from Crissy Thompson, who often spends as little as $10 a week to feed her family of five.

You can also think about where you shop. They’re called “convenience stores” for a reason! We pay a price to be able to run into the store and grab something on our way home.

This is just one example of the many convenience expenses. If you’re living payday to payday or not saving as much as you would like, think about your convenience expenses and the time / money interplay.

There is a huge trade-off between time and money. If you have money,
you can save time. If you don’t have money, it’s important to really
 think about how you’re using your time and try to save money.

___

You can get the tips and tools you need to be a bigg success
Subscribing to the Bigg Success Weekly! It’s conveniently e-mailed to you once a week. And it doesn’t cost you any money! But the time you spend reading it will help you make and save money! How’s that for a deal?

___

Next time, we’ll discuss how to create wealth in today’s new economy. Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00261-111008.mp3

Related posts

Don’t Make This Costly Mistake

Getting Aggressively Passive: Creating A Passive Income That Sets You Free

How To Get Rich

6 Easy Steps To Financial Freedom

(Image by lusi)

BIGG Success Logo boxed

Is Your Status Costing You Money?

balance We all experience trade-offs. One of the most significant ones is time and money. If we have money, we can use it to buy services that give us more time. Another trade-off is status and money.

___

___

Status at work

We may ask our boss for more money, but he or she tells us that it’s not in the budget. So instead, we’re offered a title – it gives us more credibility but it doesn’t line our coffers.

___

marylynn When I was starting out in my radio career, I helped out quite a bit in the production department putting together commercials. I eventually became the go-to person when the production director wasn’t available. When I asked for more money, I was told it wasn’t in the budget but they gave me the title of Assistant Production Director. This helped me negotiate for a higher salary when I left for a different market.

___

So sometimes the title can lead to more money. If that’s the case, great! But we need to go into it with eyes wide open because status without money usually doesn’t do us much good in the short- or long-run. We may have to work more hours because of our new title. We may be held more responsible. So we have to weigh the benefits.

Bringing it home

We also often fall into the status trap personally. We buy things, such as cars or houses that we don’t really need or want. We do it to keep up with our friends and neighbors.

___

georgeTwo of my friends are best friends. They don’t do this anymore but, when they were first starting out, it was almost comical to watch them compete with each other. One bought a new car; within a month or so the other got a new car. One of them bought a new house; the next thing you knew the other one had his house on the market and was buying a new one. One got married; soon the other was engaged. One had a kid; soon the other one was an expectant father!

___

The point is to recognize when you’re about to do something solely to increase your status. It may hurt you financially! Which means, in the long run, you’ll have less status than you would like.

It’s funny … what often keeps us from getting rich is acting like we’re rich before we are rich!

___

Get the tips and tools you need to be a BIGG success.
Subscribe to the Bigg Success Weekly – it’s FREE!

___

Next time, we’ll discuss one more thing to add to your schedule to keep you on schedule. Until then, here’s to your bigg success!

 

Related posts

Getting Aggressively Passive: Creating A Passive Income That Sets You Free

6 Easy Steps To Financial Freedom

(Image by Jayded74)