If you had a magic wand that let you could schedule when and how you got your own raises, what would you do with that?
Imagine if you could schedule increases to your income on a regular basis. What if I told you this is possible, and all you have to do is get a little more focused and maybe be a little better at what you do?
A hugely important thing that all entrepreneurs think about is how to make enough income. For most of us, we have some work that's steadier work but maybe not as well paid, and we have other work that’s not as steady or reliable, but that might be a bigger opportunity in terms of income.
If you do the math using hourly income, there might be some projects where we can make our base rate of x, whatever x is: $10 an hour, $25 an hour, $100 an hour. Then we have some 2x work, and we might have some 4x work.
This means, if your base rate of x is $100, you can charge $100 an hour for some work, $200 an hour for some other work and $400 an hour for other work again.
This can feel very inconsistent as an entrepreneur, because one minute somebody wants the 1x work and then they want the 4x work and it feels like it's out of your control. One client might have signed up earlier, and you’re doing the work for them for $100, but another client thinks the same work is worth $400.
So how can you change this situation to your advantage, and still keep your clients satisfied?
What you need to do is start scheduling your raises by choosing a certain number to begin at. It might be a bit lower than what you ultimately want to be earning, but it’s going to get enough people on board that you’re spending 40-60% of your time getting steady income in, or enough that you’re earning what you need to get by.
Then, you let people know that your rates are going to go up in 3 months. This is all about knowing the ultimate value of your work to your client, whether it’s a product, a coaching program, a live event, or a package deal, or anything else. You need to know how much your client will benefit financially from your work.
Say you’re running a coaching program, and you know that if someone does the program and completes all the work, they’ll get at least $10,000 worth of benefits from it. If you know that your client will get $10,000 worth of benefit from your program, you can reasonably charge 10% of that, so $1,000.
Let’s use $1,000 as the price you’re aiming for, without worrying about hourly rates for the moment. But with your new coaching program, you don’t have anyone willing to pay $1,000 just yet. So you start out with your first group and charge them $100. You tell them that this is the starting rate for the first 3 months, and after that, it will go up. Without pressuring or hard-selling them, you make it clear that after those first 3 months, the price will go up to $200.
This way, you get people who maybe weren't able to or willing to pay the $1000 you’re eventually aiming for, but they’re onboard for $100 and they're getting great results.
You’re serving them just as if they were paying the $1000, and in return, you’re getting testimonials, feedback, and the ability to fine-tune how you deliver the program. This is all incredibly valuable to a new entrepreneur.
Then, every 3 months or so, you’re going to slowly increase the price. You don't have to be pushy about it, or you’ll put people off. But if you just let people know the price keeps going up roughly every 3 months or so, you’ll encourage them to get in now. More importantly, the reason the price keeps going up is that you’re getting better at delivering your product and you’re getting more consistent results.
The aim for your clients is still a $10,000 gain in general, but as you’re learning and developing, maybe only 20% of your clients are getting that result to begin with, so it makes sense that they’re paying less for your program.
Compare this with a few months or even a year later, when you have more experience, more feedback, and more understanding for how to help people, and so more of your clients are meeting that $10,000 goal: then it makes sense for you to charge more.
Over time, this method works out as the fairest way to charge people. This is not a scam or some clever trick. This is about acknowledging that over time you become worth more. You become better at what you do. You're able to deliver more consistent results.
By starting at this lower price point, you’re also offering a commitment level that more people can get behind, meaning you’re increasing your audience.
On top of that, you're giving yourself a chance to develop your craft, but you're getting paid while you do it. A lot of people tell me that they don’t want to start with a $100 or $200 program, because they don’t want to get pigeonholed as someone who isn’t worth more.
But think of it this way: if you go in charging $1,000 for your program before you’ve proved yourself in that market, it’s going to take a lot longer for people to be willing to invest that money in you. It might be one person investing $1,000 rather than 10 people investing $100. Although you make the same amount of money, in the latter case you have 10 times as many people to recommend your product to others.
Of course, if you’re an amazing marketer, then maybe you can get people to commit to the $1,000 package from the get-go. But in that case, you really need to know that your product is going to deliver exactly what you’re promising, or else people will not be pleased to have invested that much. You need to be very confident in that field already, or you need to spend time perfecting your product before you launch, and that takes time and money.
Compare that with offering people the product for less, when they know it’s worth more and will one day cost more. Let them know that you welcome feedback, and you’re actively looking to improve. At each step, you’re learning what you need to do more of, what you need to improve, and what you should drop. You’re consistently improving, and you’re getting paid to do it.
Over time you might even be able to improve on that original $10,000 aim, getting it up to $50,000, for example. What’s more, your early clients are feeling that they’ve got a good deal, and are much more likely to recommend you. Ultimately, it’s win-win.
I hope you find this helpful. If you have any questions on this topic, feel free to reach out to me or shoot me an email.
If you want to learn more about how we can help you do this, go to 4dayworkshop.com, where you can learn about our 4-Day Work Week Entrepreneur Academy, which has a series of live events and an online program as well. Let me know how I can help you.
As always, I look forward to helping you make more money in less time doing what you do best.
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