Valuing our Time in Service Based Businesses
Time. What puts value on our time? Others…ourselves…money? Probably a mix of all three. We’ve all been in the situation where we start with setting a dollar amount to be paid for our skills/knowledge just to find we are being talked down. Sometimes so far that we end up paying even more in time/resources than what we are earning. Usually this happens without us realizing what just happened. It is to be expected that we start our businesses by billing low in the beginning to attract more clients, build up our experience, and establish our presence and reputation. Once you get past that phase you then adjust your rates by figuring out where the profit and losses really are. What kinds of jobs take way more time than we can ever bill enough for? What kinds of customers end up costing us more in drama and delays than it may be worth?
We usually get into business for a few reasons; to be our own boss, because we see a need in our community and our unique skillset can fill that need, or countless other worthy reasons. One would hope that when opening a business especially a service based one, that the business owner would place high value on building it right from the beginning. Using the Golden Rule as the foundation to make all customer choices. This is how we built our business, and this is the lens we expect all of our employees to see through and respond with when interacting with customers. Now this most certainly doesn’t mean the customer is always right. What it does mean is that the customer needs to be presented with the perspective of the (small) business and how that is different from a chain company.
Unfortunately most customers are used to dealing with big corporations and the impersonal, dragged around, strict by the book with no wiggle room policies. There are countless times we have been told by customers that they are choosing not to use their warranty they paid extra for at the big corporations, because they wasted so much time and frustration getting different answers each time they call and the excessive wait time to have their warranty finalized. They then come into our shop prepared to pay the extra costs to have the repair done within a few days to a week because they can look us in the eye and deal with a small local business. Even though this is usually what brings in a customer there is still a lot of times their mentality is that of dealing with a corporation. What do I mean? They try to barter with the price or ask if we will price match. They want to speak with the owner instead of the manager. They want help with their devices and ask 30-60 minutes of questions and then turn around to walk out without expecting a bill.
Valuing our time might mean that we over estimate a quote because we know it will probably run into more issues and hopefully they won’t want to go forward with it. (They usually do want to anyways). It means we look at a job and price it in two ways. The bench fee we charge up front to try (diagnose) and the final bill we will have if successful (repaired). It amazes me that customers are still surprised we charge to diagnose. Where do you get 1-2 hours of labor/resources for something you want worked on and don’t get a bill? The mechanic bills you for his time to figure out what is wrong with your vehicle even if you decide not to go ahead with the repair. The lawyer bills for his time even if you don’t win your case. The doctor bills for his time to run tests and eliminate possibilities.
I can’t tell you how many times we have had to explain to customers that we have to bill for our time. We will literally tell them that if we don’t, then we are paying to work on their device. No business can stay in business if we don’t charge for our time. Whether you bill by the job or by the hour, your time spent is money earned, if not then you will quickly go out of business. And if we go out of business then they won’t have a place to bring their next repair to. Telling your customers this in a firm but friendly manner is usually all it takes to remind them they are at a local small business. So don’t feel guilty to bill a bench fee before starting on any job. People will always have the money for what is important. If they don’t have the money and it is important enough to them, then they will do everything they can to make the money and come back for the repair.
By not backing down and price matching, or offering steep discounts, you let them know that they are getting something worth more than a saved dollar. They are getting honest, quality work done at a fair price. We are not in the convincing business. We want customers who are happy to pay our rates and happy to be working with us. Not someone who feels we are trying to persuade them. It is not uncommon for us to say “If you want to look around and check other shops out, or weigh your options before deciding, we would encourage you to do that.” Sometimes that is all it takes. The customer doesn’t feel like we are selling them anything and they then are ready to happily pay our fair rates. Keep your time’s value front and center in all the decisions you make about what kinds of jobs you want to do or take. This will help you feel good about where your business is going and allow it to grow to unlimited heights and profitability.