Teach me ..for free, or over a cup of coffee

 As a business owner, I don't give away my time for free. And neither should you. Time is the one thing that we can never get back. 

"Time is more valuable than money. You can get more money, but you cannot get more time." -- Jim Rohn

I am not sure how I want to approach this topic, but I want to get it off my chest. I do get this odd calls, from strangers sometimes, asking for FREE consultation for services that is normally chargeable. And they get offended when I refused to waive the consulting fee, and they get angry, sometimes, when I asked them to sign for my phone support package. 

Sometimes, the discussion can proceed to the level of the caller taking pains to justify that it is a simple question which needs only 1 minute to answer.  Whether it  is an easy-to-answer question, or something which requires more time, still, why should I answer the question when there is no monetary consideration to bind us together?   

It sounds like all I care about is money.  Yes, I don't apologise for it.  Admit it, everybody is in it for the money.  It's my right to earn a sale, and pursue a profit, as its' your right to get proper advice for your problems.  

People are so used to getting free information on the Internet, that they think you owe them '5 minutes' of  consulting time, for free.  Don't they know that not all free things are good for them, and if you don't pay for advice, you may be given the wrong advice, and that the adviser is not accountable for that advice?

Someone also offered me a cup of coffee for my advisory time, in exchange for the fee which I quoted her. I politely told her that I don't drink coffee and I prefer the money,  to pay for my office rent.

So, am I to be faulted for talking about monetary considerations all the time? 

I am referring to the chargeable  time, the period between 9 am to 6 pm, weekdays.  Outside of this time scale, I may be inclined to give free advise, if I am not exercising my way to a healthy body, or spending time with the family.

Power of budgeting, and acting on it

This time last year I sat down and worked out how much I earned per hour for 2007, and wasn't too happy with the figure.

Earnings per hour = total annual sales / 2000 hours


Therefore I made a decision to increase it by 50%, and guess what? I have achieved my target revenue for 2008!

So now I am setting another target for 2009.

What about you?

How did I achieve my target revenue? I consciously have that figure in my mind, & will not take on jobs that pay me lower than that rate. Did it price me out of the market? I don't think so, because I know I provide a much higher value to my clients.

If you have a team of sales people working for you, you can extend this concept to each sales staff and you can work out how much they are worth to you per hour, and you will not want them to spend another minute longer on un-productive work!


Read also my take on Should you wash your own car

Should you wash your own car? Time is Money

Should you wash your own car, or should you pay someone to wash your car for you?

The lazy me would automatically opt for outsourcing the car wash to others. The thrifty me would want to save the $10 I have to pay someone to wash the car and opt to clean the car myself. The health conscious me would take this opportunity to sweat it out.

How do you decide? Putting aside the health aspect, you may want to ask yourself how much would it cost to wash the car myself? Is it the $10 that is asked for, or does it cost more than that? In other words, what is the worth of an hour to you? Remember that Time is Money.

To calculate how much you are worth per hour, take your yearly gross income, remove the last 3 digits, and divide the number by 2. That will give you an indication of how much you are worth per hour.

Say, you earn $5000 per month. Your yearly income, excluding any bonus is $60,000, and your hourly rate is thus $30 (60,000 /1000 / 2).

In that case, if it takes 1 hour to wash the car, you would have lost the opportunity to make $30 in additional income. It would be better off to pay someone $10 to wash the car, and you spend that 1 hour on productive efforts, like reading a book on business, or take that time to phone your client to build a better client-supplier relationship.

I am reminded of this quote by Brad Sugars, Founder of ActionCoach.

The only difference between YOU now, and YOU in five years will be
... the books YOU read,
... the people YOU associate with, and
... the way YOU implement the knowledge into YOUR business

So, make full use of your Time!


Note :

The simple formula of calculating the hourly rate assumes an average of 2000 working hours per year :

No. of working weeks : 50 (52 - 2 weeks annual leave)
X
No. of working days per week : 5
X
No of working hours per day : 8
= 2000 hours per year

Time is greater than Money.

Why put off a decision if it can be made today. You can never buy Time.

Today, I received a call from a prospect who has heard about the goodness of MYOB Accounting from a fellow business owner. However when he found out that the price rebate promotion had ended, he said there is now no urgency to buy the MYOB software. What a shame.

I agree that price is a factor when you are thinking of buying anything, but in this case, Time is a bigger factor that money.

Why do I say that? Where your business is concerned, lost time is lost money. If you can save 10 minutes per day doing something which the computer has been designed to do, you will have saved 41.7 hours per year (10 min x 5 days x 50 working weeks per year). Assume you can earn $100 per hour, then you would have been able to increase your income by $4170. Multiply that by 10 other tasks which the computer can do faster than a human. And compare that to the cost of the software. You can easily decide whether to invest the money in the accounting software or not.

What are consultants selling?

Time.

Consultants are selling their expertise and knowledge acquired over the years. They are trading their time for money.

Expect to reward the consultant for spending time with you, even if it is over the phone.

If you respect your time, then you should respect the consultant's time also, because the consultant is selling his/her TIME to you in exchange for monetary or non-monetary compensations.

Look at it this way, if every client asks for 5 minutes of free time from the consultant, how is the consultant ever going to find the time to earn their keep?

Most consulting firms have a retainer (business support / or coverplan) program in place. You should consider enrolling in the retainer program so that you can have phone and/or on-site contact with the consultant on any issues you face.