Finding it hard to get to those important but non-urgent projects?
Happy with activity, but still hoping it will soon reflect on your bottom-line?
Feeling lost as to how others seem to find time that you can’t?
Blaming your software, systems, procedures or people for just being too inefficient?
Have you thought that the real problem could be somewhere else?
Such as…your pricing?
Price is a business-person’s best time management tool.
At a simplistic level, if you’re too busy, you’re too cheap.
At a bit more complex level, provided you’re adding value to your clients, you simply can’t afford to be everything to every client in your business life.
Here’s an exercise to consider if pricing is strangling you and your business to an long slow death on the activity conveyor belt…
- On a spare piece of paper write down the absolute minimum amount of money in dollars that you regard as you minimum price below which you won’t ever go (apart from pro bono work) to deliver quality advice over a period of 12 months…
- On the same paper, write down the average amount of money in dollars that your average advice clients pay your firm over a period of 12 months…
- Again on the same piece of paper, write down the average of the 5 biggest amounts that you’ve received from your five biggest clients over the last 12 months…
OK – here’s the thing…
If you feel caught in the classic business activity trap, the answer could be in the figures you’ve just written down.
You could be stuck in your Very Comfortable and Comfortable Pricing Zones…
The pricing zone between your minimum and average pricing is called the Very Comfortable Zone – you’re very comfortable pricing work in this zone. You’ve been doing this type of work for ages, you know you can do it, you know you can add the value the client seeks. It’s almost a no-brainer – you win this business, you know you can do it, you go for it, because you tell yourself “it pays the bills”…
But it doesn’t make you money or give you more time.
The pricing zone between your average pricing and average of top 5 client is called your Comfort Zone. Whilst not as comfortable as your Very Comfortable Zone, it’s still a cosy pricing spot for you and your business. Again, you’re confident you can deliver value, you’re confident of your business’ ability to do good work.
But, it too doesn’t make you money or give you more time.
Real growth occurs outside these zones.
Staying in these zones just makes your busier, it doesn’t give you the profits to hire more people, pay yourself more. Importantly, this type of work, doesn’t give you the time to undertake important but not urgent projects to take you and your business forward. Work in your pricing comfort zones just makes you busier, gets your office busier, strains all resources. The more of this type of work you get, the more people you need, the less ‘extra’ profits, time, energy for anything other than more of this type of activity work.
Welcome the the conveyor belt of your success!
I’m not advocating just raise your prices.
I’m advocating you consider increasing the scope of work, consider pricing above comfort zones, consider raising your minimums.
For the many firms that we act on their price and value committees, the first thing we do is get them to understand that working hard with lots of activity is not our goal – it’s working smart.
Sure, there are efficiencies with better software, better training, better processes. But this is just tinkering.
Real change comes from real conviction to raise minimums, broaden scope, pitch for ‘harder’ or ‘newer’ work above pricing comfort zones…
What do you think?
About Jim Stackpool
For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.