The Desert of Arizona
Sunny 47 Degrees
There are a lot of numbers that can be important in business.
Do you know how many leads you got yesterday? Do you know the average lifetime value of your clients? Do you know how many people have to visit your website to get one lead?
Lots of numbers. Easy to drown in them.
There’s one number, however, that I believe trumps them all for a service provider.
That number is the one that helps you decide whether or not to get involved with any one client.
At the end of the day, everyone is selling time. That’s all we have. Even people who sell products are still selling time. They are investing time in return for something else.
So when you take on a client, you aren’t only getting money and experience. You are also paying them in time. That’s some of your life that goes by right there that you aren’t getting back.
The trick is not to invest this poorly or in the wrong people.
Now I don’t bill clients by time units. I don’t think that’s a smart way to go. But when I’m deciding whether or not to take on a project, time definitely plays into it.
I want to be more valuable today than I was yesterday. I don’t mean more valuable in my own head, I mean more valuable in a way the market understands.
So if I look at my fees over time, they should be going UP while the time invested goes down. That’s the trend that needs to continue.
I keep loose track of that. That’s my number. That’s how I get a general feel for whether or not I’m moving in the right direction.
The goal isn’t to be busy, or fully booked, or bursting with too much to do. At the moment, that’s the case for me. But that’s a clue to make adjustments to the system OR to simply raise fees.
The real goal is highest value delivered to the client in the least possible amount of time.
When I pay attention to that “number” over time, then I know I’m making progress…
So what’s your number? It doesn’t have to be like mine. You could figure out another number. You could create a quick measuring scale you use to assess the viability of a new client. A rating that includes dollar amounts, long term possibilities, the hassle factor, the value of the experience or relationship and other criteria. Give them a rating in your own mind. Ratings above a certain point become clients, ratings below a certain point get referred out. Easy decision if you look at the number.
Figure out your number and your decisions will get smarter.