What Is Your Wisdom Worth?

Could I pick your brain? That's a common request which a friend recently addressed in a social media post. To summarize her remarks, this question is extremely unfair and disrespects the accumulated experience and wisdom which a person has developed. To request and expect valuable brainpower for free is never appropriate.

When I get such a request (which is quite often), I generally respond with something along the line of "Can I pick your wallet?" It generates some interesting responses.

The dialog surrounding this common inquiry got me thinking about a related matter - what is your knowledge, wisdom, and services actually worth?

Have you ever wondered if you're charging enough for your services? In working with clients, this question often comes up. Noble rainmakers want to serve others well and sometimes feel a measure of guilt about the compensation they request. As a result, they often underprice themselves.

However, NOT charging enough could be holding you back from helping others more effectively. It could be limiting your future financial security. By "giving" too much away to others, you may actually be stealing from your own family. You could also be limiting your potential influence and impact.

Your work is worthy of fair compensation. It may be time to reconsider what is wrong if your present clients don't value your skills, expertise, and time well enugh to pay fairly.

Think about it. Low prices signal that your service isn't worth much - even if you are contributing lots of unseen effort. Most clients have no understanding of what goes into producing the final result they receive.

Why do so many rainmakers tend to underprice themselves? It can be low self-esteem or confidence, fear of losing (or not landing) clients, imposter syndrome, or simply the desire to serve others before self.

It is important to understand that a good rainmaker isn't greedy, but it is also vital to understand that a healthy profit is essential to pay your bills so you can continue to serve others well. You must generate enough revenue to purchase resources for your business, improve your skills and offers, and perhaps hire people to make even greater impact.

So, what are the options?

Option 1 - I am not a big fan of time-based pricing (trading time for money) but it's a simple process. Divide the total amount you need to earn by the number of hours you will deliver services. Keep in mind that you might have many hours or "working" which are not actually delivering services.

Option 2 - Value-based or productized pricing is often a better methodology. Think of it as earning a "commission" of the increase you help your clients achieve. Start by evaluating the economic benefits which you help your ideal clients achieve. Then also research similar businesses to build a healthy profile for your revenue and profit margin (use 50% if you are uncertain). Next, look at your direct costs (i.e., travel, equipment, software, materials, planning time, taxes) and make sure they don't exceed your profit requirement. Once you have your target revenue and profit aligned, divide your revenues by the number of clients you expect to serve. This will give you a reasonable foundation for your annual or monthly pricing standards and gives you the confident to charge according to the value you bring.

P.S. If your current clients cannot afford the pricing you actually need to charge, then you might be targeting the wrong ones. It might be time to fish in a different pond and/or rethink your offers.

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