What can I do to get more consistent income in a service-based business?
Q: Dear Ruchi, I am new to the entrepreneurial world and have been working with 2 clients whom I charge hourly. Now that I am getting more leads, I want to adjust how I do things to be more stable. Sometimes my work feels inconsistent from week to week as my clients cut or add hours from time to time. What should I do?
A: The learning curve of entrepreneurial life is totally normal, and realizing it’s time for a change is a great indicator of growth! Part of running your own business comes with a lot of learning and adjusting until you find your ideal flow but that’s all part of the joy of it! As business starts to grow, it’s important to start thinking of things from a sustainable mindset and choose solutions that focus more on the long term. The problem with charging hourly at this phase in your business is the fact that if you’re not working you’re not making money. Now while that may sound super obvious, hear me out…
When I first started building Watch Her Prosper, I charged hourly. While it seemed fine at first, I ran into my fair share of issues. For example, I once had a client who was dealing with some financial strains and they used to cut down our meeting time, conversations, and tasks to decrease the price. That, however, limited us from growing together and didn’t allow me to make the impact I was capable of making for the client. Money aside, it’s important to remember the value of working with clients who are committed and invested in you and your top-notch services. These things all point you on a pathway to prosperity.
These experiences taught me to start thinking about my rates differently. I highly recommend you consider thinking of your service more as a product and doing your best to remember the value of what you’re doing! A great way to do this is by creating a package or flat rate for your clients that are not just based on hours worked, but instead based on the value of what you are providing. This will not only include the hours you spend physically working but all of the other factors that go into your work as well.
This could include…
Number of meetings and calls
Communication access via email/text/etc.
Tools, subscriptions, or software you may be using to complete the job
The impact you are making for them based on your work and experience
Being a service-based business owner is much more than meets the eye. Your prices should always include the benefit you are giving to your client or their business. You are providing them with support, growth, and positive change. Don’t forget to value yourself so they also value you!
For more tips about managing your finances on an inconsistent income click here to learn how to create a tangible budget.
Here’s to your prosperity!
Ruchi