business strategy: The only two things that impact profit & time in your business

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Today’s talking point:

In the online business world, you've probably heard people talk about building a business that supports your life, but what does that mean at an individual level? What we want in life and how we achieve it looks different, but today I want to share some of the things that have helped me build a business that truly supports the life I want to live and how you can do the same.

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There are really only two major things that impact the profits and time spent in your business. And I feel like so many people ignore the things that ultimately make the difference and make the change. But there are two ‘levers’ available to you in your business to allow you to move forward with momentum.

What I see with service-based business owners, in particular, is that they are hitting a ceiling in both time and money. You will hit that more than once in your business journey. But you can adjust these two levers from time to time to make a change.

Instead, I see people setting their sights on lead generation or leveraging social media marketing. And yes, you can get more leads. But if you are already turning away clients or not running out of time but not hitting financial goals then ask yourself: Why am I trying to get more leads?

I'm not saying that this is always the answer. Sometimes there needs to be a different change. But I think our gut reaction of a solution is isn't always accurate. You can want to increase leads all day long, and then not get them and then be frustrated about it. Or you can pull one of these two levers.

Okay, so what are they? How do we do them? And what do they do for us? We've talked about why you need to pay attention. Now let's get into them.

Lever 1: How you price your services

If you are consistently booked out to the point that it doesn't really make sense in your schedule to add additional clients, then why do you think more leads is the solution?

If you have too many people saying yes, you need to increase your rates.

Now I know that pricing is its own conversation, and it hits some buttons. And I understand that there's kind of a balance between the impact of your offer and the deliverables.

And the value of the impact of what you have isn't addressed nearly enough in the conversation around pricing. I want you to have to turn fewer people away.

If you are at that point where you're having to turn people away, you might think that you should hire one more person so that you can grow your capacity. But there are cons to this, as well as pros. I would instead first consider that you are not charging enough for the amount that you are investing in these clients.

Yes, you're going to lose some leads because you'll be charging more, but those leads are going to be more qualified.

On the flip side, if you’re a business owner who is listening to this and thinking ‘I don’t want to raise your prices, what else can I do?’

Let’s look at lever number two…

Lever 2: The amount of time you are spending on projects

The only other lever you have control over is the amount of time you are spending on your clients or your projects. And so you have to reduce the time it takes you to complete the project. That sometimes means changing the scope of the project and reducing the deliverables because the price and the time are not in alignment.

Sometimes it means you need to get really clear on your boundaries, because you've been consistently overdelivering. And you've been giving a lot of free time away. Or perhaps you're just not clear on what the deliverables really are.

To reduce the time you spend on a client, you could look at your systems. So maybe you don't change the deliverables at all, but you add systems on the back end to reduce the time it takes to get there.

It could be batching similar tasks together. It could be having a better project management system or clear processes. It could be having better software. There are a lot of things that feed in to reducing time, but ultimately, it's time or money. Those are your two most valuable resources.

Conduct a time audit

Once a quarter I try to do a time study to really get facts on how long it takes to complete a project or work with a client from start to finish. I’m talking from the discovery phase to signing them to fulfilling and off boarding them and everything in between. How long does all of that actually take?

That’s how you can find opportunities to reduce your time.

And you’ll typically find it’s extra feedback and extra calls that are taking up your time. So offering feedback on projects or offering extra calls like strategy calls or consulting calls they just make everything so ridiculously long and so excessive. Can you condense those into a 30-minute pre-recorded video and send it to the client?

When you do this, make sure you look at it by client rather than project type. Because you might be delivering the same service to four or five clients at the same time. Okay, great. But is one of them, who's paying half the price, getting twice as much as everyone else?

You don't have to offer everything in the kitchen sink to every single client, you don't.

Other things to consider

There are so many creative ways to look at pricing. When I sit down with a client about this, I want to listen to them and get to know everything about your industry and everything that feeds into pricing.

You have to price according to what is going to make sense in an industry. Sometimes you may also need to push the boundaries of what's typical in your arena. But I'm also not going to go over here and say, ‘you need to do X, or it's not going to work’. That's not true. Someone cannot say, you have to charge this amount, or it won't work. It's just not true. And if anyone has ever told you that it's not true.

There is so much I could dive into with these two specific areas, whether that be time or price. So let's just end by doing a little bit of analysis. How do you decide which is the option you should pursue?

Well, I think there are some self-reflection questions you can ask yourself. The first is really being familiar with your industry and your niche. For some people, there's an across the board answer. And other times there's not.

There are a few things holistically I want you to look at:

Your audience
Your offer
Your niche
How you deliver things
The industry
Your capabilities

After that filter, it's really about honestly, the kind of business that you want to run.

You get to decide in the season that you are in with the goals that you have right now, with the way that you want to show up for your work, how you want to deliver, and price, and ultimately, what value you are creating in your packages.

And there's no right or wrong answer to how much time you spend or how much you charge. Because while they're intertwined.