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How do you value your time? Perception vs Reality

Date: Feb 28, 2022

How do you value your time? Perception vs Reality

In my personal opinion, how you value your time is one of the hardest decisions a business owner has to make and normally we’re really bad at deciding how much we should charge. But why?

We normally know what we want to charge for our services and our time but almost feel apologetic for charging that amount, so we don’t.

Sometimes we even go as far as offering discounts or freebies to try to convince someone or another business to use our services.

In each of these cases we are devaluing what we are worth and once you start on this journey it is very hard to change it without a radical approach.

In most cases as a business owner, you have a wealth of knowledge that you have built up over the years. You have started your business with a passion and possibly because you know you can do something better than where you are an employee. So why do we feel so guilty about explaining this and incorporating this value in our fees?

You need to provide clarity to your customers as to what you offer and what you are going to do work wise for them. You need to provide certainty. They need to be able to trust that you will deliver what you say you will as they are after all paying for your service to help their own business.

If you can’t provide clarity and certainty, then your customer or prospect will doubt what you are going to be able to do.

A great example of this is say bookkeeping. There are so many adverts around now for cloud accounting / finance systems and one of them even tells you there is a “team” behind the scenes that is doing the work for you. You are led to believe that it’s a click of a button and as if by magic everything is correct.

However, in reality it isn’t, and the chance of the data in a finance system being correct because you’ve pressed a button and hoped for the best is nil. But you’re happy because it hasn’t taken much time and it’s cheap.

You probably dislike doing your finances, leave them to be the last task that you do, you don’t really understand the system you’re using but the advert convinced you you’re okay so you’re so happy that the task is done, and you don’t want to spend any more time and money on it.

Now you chat to an Accountant who wants to charge you for bookkeeping as your business is growing and you don’t want to do this task all the time as it’s now really annoying you. You have, before you’ve even started the conversation, put their services at the lowest possible value in your head as it’s just a click of a button, as that is all you have been doing.

Your immediate reaction is likely “that’s too expensive as it doesn’t take me that long to do the work”. This is probably your reaction no matter what fee they quote. Then if they are in the wrong mindset, the accountant says, “I can apply a 10% discount to this for you and I can do the system review for free”. Your mind probably says “I knew they were charging too much”.

But let’s go back to the beginning.

To date you have based all your business decisions, assuming that you have spent the time on the finance system working out the correct reports that you need to use to make these decisions, on data that you have entered with your fingers crossed. In some cases, the data isn’t even viewed in the finance system until an Accountant needs to access it at the end of the financial year.

You are now talking to someone who I’m assuming in this example is qualified, either as a bookkeeper or an Accountant. They have the experience that they need to do the task that you are asking of them. The reason it takes 5 minutes or an hour or however long the task may take, is because of this experience and knowledge. There is no crossing the fingers when you click the button as they understand exactly what is going on behind the scenes,

They can delve into the data and give you answers to questions you didn’t even know you needed to ask.

You are not paying for their time in a minute by minute, pound by pound approach. You are paying to access their experience and knowledge so that you know that your bookkeeping is accurate.

Now let’s flip it.

What if your business was the accountant in this scenario and someone approached you for services and expected you to do them for very little? How would that make you feel?

Undervalued, not trusted, crap.

Why do we as business owners take this approach with other businesses when we would hope that no-one would take that approach with us? It is not okay and there needs to be more respect given to other business owners when agreeing to services. And this is businesses of all sizes.

Just because your business may be smaller does not give the larger business the right to devalue your services.

BUT it is the responsibility of all business owners to be able to explain with certainty what they are going to do. This is not justifying your fees; this is having an open conversation with the person interested in buying your services as to how you will meet their needs and why they should trust you with the work. This is not saying “I have x years’ experience and I can do this task with my eyes closed”. This is saying “this is the work I need to do, and this is why I need to do it so that you can have information that you need”.

Using the example above, this would be explained by Accountant One as: “I will be completing your bookkeeping every month so that you will have an accurate profit and loss account and balance sheet that you can make your business decisions on. So that I can do that I will need this information from you by this date. Is this something that you can do? If the information required is late then I will not be able to complete your bookkeeping on time as we are both responsible for this task to be completed by the deadlines agreed each month. Are you happy with this approach?”

In just a few sentences you have provided clarity on the work you are doing, the responsibilities of both sides, the deadlines to be met and the outcome of doing this work. That provides certainty for both businesses.

If Accountant Two said “I charge £x per hour for the bookkeeping task and I’ve estimated, it will take me x hours to complete. Do you want to sign up for this service?”

Which business would you go with for bookkeeping?!

Another area that is really common is one of comparison. On services such as bookkeeping it is easy to compare pricing for quotes you may have received. BUT are you actually receiving the same service?? Just because someone you know may be getting the “same service” for cheaper does not mean that it is right for your business. And how do you know that it is really the same service as you haven’t spoken to the other service provider. In the example above the price could be exactly the same or Accountant Two could be cheaper but the service and support you’re receiving, and the certainty of the outcomes are totally different.

It must be the best choice for your business.

It’s good to check whether you’re devaluing yourself in business conversations or providing certainty for those you work with. Discussing your approach with a fellow business owner who you are not in business with is a great way to get feedback on whether you are really providing clarity and certainty as it can be difficult to see all points of view when looking at your own business.

It is a continuous journey of improvement and is never really has an exact ending. As your business evolves, changes and grows so must your business conversations but at the core must remain your values and beliefs and truly believing your worth.