Bad habit that loses entrepreneurs' money.

http://www.ruleyourrealm.com/my-bad-habit-that-cost-me-thousands#more-535

by entangld • 14 years ago

15 14 14 years ago

ruleyourrealm.com

chicceo• 14 years ago

This is really an issue for entrepreneurs. I see it happen a lot with female entrepreneurs too.

cbsmith• 14 years ago

500's are really bad for entrepreneur's...

taroth3• 14 years ago

Working link: http://webcache.googleusercontent.com/search?q=cache:KgbmD-Q...

As a college student who likes to pick the brains of entrepreneurs, this post made me feel guilty. I can't really afford their advice, but I need it and value it. How can I provide value to the entrepreneurs that are so generous as to meet with me?

paulerdos2• 14 years ago

"I can't really afford .. but I ... value it" . I sometimes hear this and think, do you really? Customer pays for expensive car, hits the right social standing events, but consulting services get the "I can't really afford" story. Truth is that we don't value consulting on subjective issues because there is little conclusive data indicating that the consulting resulted in increased value.

taroth3• 14 years ago

Your point is that people will only appreciate advice that confers direct results (fancy car->invited to fancy parties). I evaluate advice against where I am and where I am aiming to be, which means that advice that isn't practical now (ie how to sell a company) can still be useful for guiding future decisions.

Perhaps a useful metaphor would be that future-oriented advice is a amplifying lens on the headlights of my business. I can make better decisions, because I can see further down the road.

patio112• 14 years ago

1) "Pick the brains" suggests useless parasitism which is unlikely to turn into a meaningful change for the world on the basis of that advice. Stop asking to pick brains. Start exercising discretion and coming to people having done your homework and being ready to diligently apply the specific advice you are seeking.

2) Many people whose advice you want are not primarily motivated by money. They already have money. Give them something they didn't wake up with, like an intellectually engaging conversation, a sincere thank-you, and/or the opportunity to have someone take their advice and report a win.

thenomad• 14 years ago

"Many people whose advice you want are not primarily motivated by money."

Yes, yes, yes. I've gotten useful advice even from direct competitors simply by offering them the chance to give advice. People like to give advice. It makes most people feel respected, of importance and value, and generally good.

Indeed, it is worth bearing in mind, throughout life and business in particular, that there are a lot of motivations beyond money. I see far too many filmmakers and other entrepreneurs fall into the trap of believing that in a negotiation, the guy with more money has all the power.

taroth3• 14 years ago

Thank you, your answer bridged a gap for me. Will drop an update here as soon as I apply it.

shalmanese• 14 years ago

Full Text:

It amazes me how many different ways you can lose money in business. When you are trying to Rule Your Realm, losing money in not a very good way to do it! As an entrepreneur, it’s important to know what your strengths and weakness are. This way you can either work on those weaknesses or hire someone else to do those things. Believe me, I know!…

There was a bad habit that I had to fight for years that literally has cost me thousands upon thousands of dollars. What was that habit? It was doing things for free and not liking to charging my customers and clients. Although, I did like getting paid, I didn’t like quoting prices or asking for money. That may sound weird to some of you, but there you have it, that was my struggle! See, I’m not a greedy person and I enjoy helping people, which are great qualities to have as an entrepreneur, but when it’s all said and done, you have to get paid! You have bills to pay just like everyone else!

It wasn’t until I came to the realization that every time I did something for free, or I did a free coaching session, or quoted a very low price on a job, I was really robbing my family!! I was making it harder on my family, all because I didn’t like charging people! I realized not only am I making it harder on my family, but I am not Ruling My Realm in my business or finances..

So here is what I did…

First, I decided I was going to charge people what I am worth. I think it’s very important to know how much your time is worth. Because most of us start out by having jobs, we can get used to others dictating how much we are worth. But, not anymore!! We get to choose now! I do recommend doing some research first and finding out what the standard rate is for someone in your Industry, that way you have an idea of what people are used to paying for your products or services. You have to value what you offer, because if you don’t… No one else will either!

Next, I put an end to allowing people to “Pick My Brain” for free. It absolutely amazes me the mindset of the masses. Now this is not a put down, but it is true and you need to be aware of what you are up against. I am always amazed by that amount of people that want to pick my brain about this Social Media strategy or that Facebook ad tactic, plus the ones that want me to do a whole job for them for free! I don’t know about you, but I don’t think I could get away with that if I walked up to a doctor, a surgeon or even a mechanic and expected them to give me free advice or a free service! I guess it could be worth a shot, but it normally just doesn’t work that way. But, because we are dealing with more intellectual property and online stuff, people’s mentality seem to skip over the fact that this is how we make our living! Don’t you think your expertise you have worked so hard for is worth more than a cup of coffee!?

I am all about offering value for free, but whatever that value is that you are giving away for free needs to be done strategically. That way you can still give out good stuff and pay your bills!

The third thing I did which really helped was, I setup a proposal and billing system that forced people to see how much I charge and when their payment was due. There are a lot of cool billing systems out there, you can check out Freshbooks and Ballpark just to name a couple.

Implementing just those three things really helped me get over my discomfort of quoting and billing people. If we are going to Rule Our Realm and make a difference on this planet, we need money to do it!… Otherwise, it’s just a hobby.

Keep on Ruling! Paul Cooley

electic• 14 years ago

Internal Server Errors tend to be big money losers.

fookyong• 14 years ago

Comparing social media gurus to doctors or surgeons is a bit of a stretch.

People ask you for free advice because they don't understand the value of "social media advice"... most likely because that value is highly subjective and 9 times out of 10 given by some self-proclaimed expert who doesn't have a clue what they are talking about.

However, asking a doctor for advice about a sickness - you can expect a much less subjective answer, from a certified professional (around which there are official regulatory bodies etc). It's easy to understand the value in that and therefore much less likely that the layperson would expect that kind of advice for free.

paulerdos2• 14 years ago

"asking a doctor for advice about a sickness". Odd example given the poor objective performance exhibited by a significant percentage of medical professionals. I remember a study done evaluating the ability of medical professionals to identify spinal injuries in a CAT scan. Very high false positive rates. Scans of normal uninjured people were labeled as herniated discs, etc. Same story with financial professionals, too much subjective judgement involved. Pick a profession that is more objective, eg: civil engineering, will this bridge stand or not.

einhverfr• 14 years ago

The simple solution is to make sure you have a good reason to offer for free, gratis.

For example, for consulting clients, I have a cutoff of 10-15 min before the bill starts. That is enough time for me to talk with the customer, scope out a problem, give them quick, simple advice, and prepare a quote. It is a good idea because it keeps lines of communication open and it makes sure I am in the loop when something goes wrong. At the same time 10-15 min is also enough time I can get informed consent for paid work and it's a nice value add.

It works well for me, actually. It also allows a little bit of leeway without allowing a lot of sliding.

patio112• 14 years ago

Charge more. If you charge enough, coffee dates and other customer acquisition activities are a cost of doing business. If your hit rate from coffee dates into customers is low, either improve your prospecting, lead qualification, or sales processes. Contra the article, this is exactly how actual professionals (accountants, lawyers, medical professionals selling elective services, etc) sell services.

(P.S. If you have a number on your rate card for Coffee Date the rest of your rate card is almost certainly underpriced by a factor of lots.)

Bad habit that loses entrepreneurs' money.

Related Stories