Welcome to 20min coaching pills. In 20min you can redesign something profoundly big, excruciatingly scary or eye-wideningly wonderful. We don’t need more than that. Actually we advise you to STOP after 20min! Out of this exercise: Take what you get. So grab a timer and off we go!
Before you start your timer:
This is a follow on post of our much debated post from “Making Money with your life purpose” in which we explain our system no how we built The Arc from a crazy hobby into a business that we (the team and many other people) love to pieces.
So: Unless you wanna be utterly confused about what’s to come, please DO use your time wisely and just read THIS other article first. We promise, it’s fun.
Here we go:
One question we’ve gotten a lot is how to start charging. We have one MBA on the team. But that doesn’t make us smart. Yet, we do think that we kind of figured out a safe and stress-free way to accomplish this.
- Damn cool and have already figured out some sort of (potentially viable) business case around your life purpose, and you are intrigued by the idea to earn money from it
- A safety-lover (to a certain extent): You are not rash (or in our view: silly) enough to just quit your job and go to Hollywood to become an actor – in other words: You are not sufficiently delusional to just do something crazy and quit your job over some mad idea
- Strategic! I.e. you DO wanna keep loving your life purpose and not despair over it cos – at some point – you’ll have to make money. You don’t wanna start sabotaging your life purpose cos of the pressure induced if you suddenly have to live from it.
- In the service or creative business i.e. you design websites, coach ppl, do projects. (You are NOT some tech app – if that’s who you are our model might still work for you, but it’ll probably be more squeaky)
- Think about: How much time do you wanna dedicate per WEEK on your “thing” – 4h? 10h? How much time would make you happy?
- How will you let ppl know about you? (facebook & email are the most common ones – but hey, if you are big on Instagram, go ahead)
- How much money do you wanna make with this? We mean: Have fun with this! How much money would be cool? If you like, stay realisitic (note: making a million with home-baked cookies MIGHT indeed be a hard start in a competitive market dominated by big chains #justsayin’).
Ready to rumble?
… ok, let’s go on then!
- Start with step 2 of this article “Making money with your life purpose” i.e. offer the “thing you are doing” for free and collect feedback like crazy to become better (yes: better like crazy!)
- Fill up the hours you reserved with clients. It will likely go quickly. Treat all clients as if they were real clients. Ask them what they think they SHOULD have paid for this (if you want to – we personally rarely did that, but hey… it did give us good insights when we did it.) Do bear in mind that what clients say they do often differs from what they actually do. Google “stated preferences vs revealed preferences” for more insights on this.
- Once you have a queue i.e once you are sold out, you start charging a low price (per hour for instance) for the next client coming in
- You check if you still get bookings
- If not, you go back to “free”. Take feedback. Learn. Become better. AND: Improve how you communicate your value!
- If you are clueless on how to communicate your value: check out this awesome video, a summary of the amazing book “Competing against luck” by the Harvard Professor Clayton Christensen. If this is still not enough, let us know if you want a separate article on this.
If you see THIS happening, dare a bigger price jump. See if you still get ppl. If not, charge less again.
b) If you don’t see this happening: Check your target group.
(i) Either you are having the “wrong” target group i.e. the people cannot pay for this (ever!). In the case of which you wanna find an adjacent target group that actually CAN provide for your living. Ask yourself: To WHO is the “thing” I am providing valuable? If you are a social entrepreneur, sometimes the people you are working with directly do not have the financial capacity to pay for your product. But maybe a municipality will! This is what we mean!
(ii) Or you are not producing something for them that is valuable enough. In that case: Pivot! Think hard and innovate a new way on how your value can be bigger! Really ask yourself: What do they REALLY want/need/pay for?
(iii) Or: you just suck at communicating your value. In that case go back to the step before, watch that video and – if you don’t get it – write us a message.
- Now it’s time for two decisions that are outlined on the beautifully sophisticated diagram below.
- Check where you are at! And if you are in that “full frontal marketing and sales”-box, congratz! This is when you ramp up your activities. You can start charging better and better prices. Whoop whoop!
Disclaimer: We do understand that this is a radically overly simplistic model. We failed to explain what “ramping up marketing and sales”, “third party investment” and many other things are. Yet: This is not the point! The point is not to throw around with long explanations and B-school-stype bla bla. The point is that you understand how to get in a structured and safe way from “working for free” to “charging”.
Ok, so start your timer N.O.W.
… and write down in 20min the strategy you wanna pursue for the coming 10 weeks.
Important: Do set a target price! You do however NOT NECESSARILY need to say: Week 3 I will charge x,xx€. Week 6 I will charge twice as much. This might lead to frustration and enhanced insecurity. So.. your choice! If you are someone who needs deadlines, bio means: put one in there. Just use this pill with caution 😉
After the timer is finished: Your pill is now working.
Go out there and have fun.
Credits go to WeCreate Coaching
and Daniel Sa Nogueira who has inspired
this way of thinking in me years ago.