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In the previous post in this series, I wrote about the mindset that you need to cultivate in order to intentionally build your business with personal freedom as your goal. In this post, I am going to talk a bit about something that relates to mindset, and that is value.

If YOU are the only value that your business offers, it will be very challenging for you to ever reach your goal of personal freedom. When evaluating the products and services that your business offers, are these things that only you can fulfill for your customers? The self employed and professionals (doctors, lawyers, etc…) are especially challenged with this problem because they are usually stuck in the situation where they are trading time for money, and their skills are usually specialized. This is, after all why they are getting paid, right? It can be difficult to get out of this cycle, but not impossible.

Where does a hamster go for Spring Break? Hamsterdam!

Where does a hamster go for Spring Break? Hamsterdam!

If the only value that your business provides is the result of trading time for money, your business will forever be spending time to make money, and you will have a very difficult time creating scale because you will always be limited by the amount of time in any given day and limited by the number of talented people you have to fill that time. This is particularly an issue for businesses who require highly skilled individuals to perform the work. The more skilled the service you are offering, the harder it is to find quality people so that you are able to scale.

One approach that you can take to solve this problem is by developing value added products and services for your clients, focusing on those things that you are able to Delegate, Document, and Automate while pricing for value instead of by the hour. Here’s an example…

My wife went to a chiropractor for an issue that she was having with her neck and shoulder. A few weeks later, I went in with her to talk with the doctor, review her x-rays and evaluate our options. While I was in the waiting room, I watched as 4 or 5 patients sat on some kind of a chair that swivels. It was pretty funny watching them, as it looked like they were sort of dancing the merengue while sitting down. There were also people there doing various stretches and using all sorts of torture devices hanging from the walls and ceiling. These people were all there for more than an hour while we waited for the doctor to see us. When we went in, after reviewing her x-rays and talking for a bit… he explained his pricing plan … several packages ranging from $1200 to $5000. Included in some of the packages was the option of doing all these funny stretches and exercises for an hour every visit. An actual ‘adjustment’ is anywhere from 15 to 45 minutes long, and he also had a masseuse who comes in for patients with certain packages. This guy had delegated the work to his patients by documenting and automating a process that they could use in order to get well on their own… and he had also added value beyond himself by offering the services of a masseuse.

Petting is so pas·sé.

Petting is so pas·sé.

He also does not charge by the hour at all, but by the session, or rather by the package. Remember what I said about adjustments being anywhere between 15 minutes to 45 minutes? This is the actual time he spends with you. Each session cost might cost $125 but if he averages 30 minutes with you and the rest of the time you’re outside his office dancing in your seat, he is dancing all the way to the bank averaging $250/hr.

This is what is known as ‘Value Pricing‘. The entire time he was there, he didn’t mention hourly rates at all, he presented everything he does based on the value it has to us. Is it worth $5000 to get my wife out of pain? You better believe it.

Hopefully this post helps you on your journey to personal freedom and gives you a good start to exploring value pricing, and learning how to value your time in your business.

What steps are you taking to increase your value? Let me know in comments or else just say hello!