The double edged sword…
As I tucked my 11-year-old into bed last night, he said to me, “Mom, now that summer is almost here, I’d like to start my own business.”
I was taken aback by this comment, not because he wanted to start a business (because he’s come up with several ideas on his own in the past few years) but because I couldn’t figure out where in the world he would find time to operate this business.
Matthew has the busiest schedule of all of us. He is currently very active at church, the equipment manager for his sister’s softball team, in the Reading Society and on the C-Team at school, and attends 4 hours of tutoring each week. He fits all of this in around his homework, PS2 time, and school.
I was also concerned that this business idea would be silly like some of the others he’s had in the past… like the lemonade stand that he wanted to start a few years ago.
Don’t get me wrong, a lemonade stand for an eight-year-old is a great idea, and the cuteness factor definitely helps fuel sales, but we live at the end of a dead end street. It took me weeks to convince him that when opening a business it’s all about location, location, location.
I asked him what sort of business he wanted to start and he responded with, “I want to mow lawns.”
Matthew is not scared of hard work; he’s a hard worker by nature in whatever he does. While his younger sister can breeze through anything that she’s confronted with, whether it be sports or school, he can’t. Surprisingly, he’s okay with this. When I told him that he’d be starting tutoring and devoting an additional four hours of his week to it, he embraced it. He knew that he needed the help.
That’s just the kind of kid he is.
But when he mentioned that he wanted to mow lawns, I just started at him. I wanted to scream at him and say “Mow? Lawns? That’s hard work! Eeeewwww.”
But I didn’t. In my best motherly, loving voice, I said, “I’ll allow you to mow lawns if you mow our yard. I’ll even pay you for it, but it’s late, so we’ll need to talk about your new business in the morning.”
I really never expected to hear anything more about it but when I woke up this morning, he caught me in between my bed and the coffee pot and said, “I’ve been thinking, Mom. I’m going to charge $4 an hour and if it takes me 30 minutes or less, then I’m going to charge $2.”
I stopped dead in my tracks.
My child was on the brink of making the most fatal business mistake that you could possibly make. He was devaluing his time. He was devaluing his efforts.
I tried very hard not to be condescending, I really did. However, I did attempt to explain to him, without caffeine coursing through my veins, that he needed to charge more, because he was worth more.
“But Mom…think about it. If I’m cheaper than the other guys, then I’ll get more business.”
I’m willing to bet this child dreamed of his new business and will continue to think about it until it comes to fruition. I know all too well of this feeling.
With only five minutes between now and the time that he was to board the school bus, I talked to him about valuing his time and his efforts and that if he didn’t, no one else would. It was pretty deep, and pretty good, considering I wasn’t yet awake and he was rushing out the door.
When I told him that I paid the kid down the street $20 to mow my lawn, his eyes got at big as saucers. “Mom, that’s a lot of money.”
“To you, Matthew, yes, it is. But to me, it’s not because the hour that it takes me to mow my lawn takes away from more important things that I can do. It’s worth me paying someone else to save me time.”
I don’t think he quite understood, but with 5 caffeine free minutes, I couldn’t go into my full spiel.
Are you guilty of either scenario in your business? Are you devaluing your worth or doing things yourself to “save a buck”?
If you’re charging a cheaper rate with the impression that you’ll gain more clients, you’re going to work yourself to death to make the same amount of money as someone charges more. You’re worth your rate and there are people out there who will pay it.
On the flip side, are you doing things in your business because you can and don’t want to spend money for someone else? How much is your time worth? Have you ever stopped to think about that?
This week, take some time to determine how much your time is worth. And if you need your lawn mowed, let me know. I have a referral. He’s a hard worker, cute and works for cheap.
To discount or not to discount…that is the question
One of our members asked:
Do you offer discounts?
I’ve been offering a discount to new clients on their first invoice (10%) and a discount to groups like the Chamber of Commerce & Women Who Excel.
I was wondering what others here do?
I’m thinking of discontinuing these as of January.
Of course, in true Rev style there were many answers to the question…
I think it’s ok to give a discount for the first 1-3 months because you are spending lots of your time learning their business and ways of doing things. If you spend 1 hour the first month learning their website files, for example, by the 3rd or 4th month you have it down pat and can do the same job quicker.
But if the tasks you are doing don’t require a slight learning curve, then maybe it’s not so good to give a discount.
Then again, if the discount brings in business, then do it. For me, I found that a discount in the beginning is often the thing that gets them to say, “sure, I’ll give it a try”.
So I guess it all depends on you, how you feel, and your business.
that’s just one answer…. there were more….
When we attend a tradeshow we will offer the participants a discount for one month only at say 10% if they contract with us by X date. As far as for new clients coming on board, we offer a 3 month trial period (for us to evaluate them and for them to evaluate us) at the regular rate with a 30 day cancellation policy. After the 3 month trial if we continue to work with them and vice versa, they sign a one year contract.
But as a general rule, we do not offer discounts on our services.
And then there are those that only discount for retainers…
The only discount I offer is the pre-paid retainer fee. Like Connie said, if you are getting clients through the discount offer then I think you should continue it. If no one is responding to it then let it go and try something else. Maybe just offer discounts to certain groups, ie. Chamber member discount, non-profit discount, etc…
So how about you? What is your stance on discounts?
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