I have been working in the value-based business model in both of my businesses, for many years now.
What is a value-based business model? In a nutshell, it's offering service and support packages to clients.
I love creating them for my own business and helping others create them for theirs.
There are just so many positive reasons to offer your services as packages; reasons that benefit your clients and you.
Anyone who has worked with me or coached with me knows I am passionate about not trading hours for dollars.
I believe each and every one of us brings unique talents, skills and value to our businesses, so to simply sell your services by the hour is really selling short the value you offer through those services.
One of the major benefits of offering packages is that it eliminates the need to track every minute of billable time.
Because your package is built around results and not time, you can focus on the work and not the clock.
Your client appreciates this because they don't have to review and re-calculate your time reports.
They pay a set rate for a certain package of services or support, and as long as those services are performed, it's a win-win- easier for your client; easier for your business, as well.
It becomes about value, not time.
Another great benefit, especially for retainer clients, is that you don't have to stop working on a project because you've reached your monthly retainer limit on time or dollars.
Because it's no longer about the time or hourly cost, you can continue the projects you're working on and accomplish them on time for your clients.
Again, your client will truly appreciate not having to worry if you're going over your limit or if he's going to get his project done in time.
Now that's not to say that you never need to track your time again.
In order to put together an equitable service package, you must have a good handle on how long different tasks take on a normal basis.
The longer you've been in business, the easier it is to calculate this and come up with a package rate that is reasonable for the client and profitable for you.
And you still need to track your time (or your team's time) in order to know that you are spot-on with your pricing.
But you won't have to track every minute for every client.
What a relief! Nearly every type of service or group of services can be put into a service or support package.
And every industry can work in the value model (coaches, healers, virtual assistants, bookkeepers, etc).
If you perform certain tasks on a regular basis for any particular client, you can create a package around that to sell to any other client.
Ideally, you price your packages based on the value they provide.
However, in the beginning that is often difficult for people to determine.
So to start, you can calculate package pricing this way.
So for example, if you offer accounting or bookkeeping services, you can create a package that might include up to X number of monthly entries, reconciling X number of bank and credit card statements, preparing monthly financial reports, and preparing quarterly tax reports, all for one set monthly rate.
You calculate that rate by determining how long you feel these tasks will take based on your experience, multiply that by your hourly rate, add a profit percentage and a cushion for the unexpected, and that becomes your service package for that particular group of services.
You can do the same thing with website or social media set-up and maintenance, e-marketing, or just about any other service you provide.
There is also nothing wrong with creating custom packages for people if they don't fit into the packages you've created.
But the key is to make packages that make sense for the client.
You might include a consultation call in the package so that you can discuss the client's needs and develop a custom package that will provide all of the services required.
Most clients will love this service format once you explain the benefits to them.
The value they gain from not having to micro-manage their agreements with you, along with the convenience you gain from not having to account for every billable minute will quickly lead to better service for them and better business management for you.
Like I said before, it's a win-win!
What is a value-based business model? In a nutshell, it's offering service and support packages to clients.
I love creating them for my own business and helping others create them for theirs.
There are just so many positive reasons to offer your services as packages; reasons that benefit your clients and you.
Anyone who has worked with me or coached with me knows I am passionate about not trading hours for dollars.
I believe each and every one of us brings unique talents, skills and value to our businesses, so to simply sell your services by the hour is really selling short the value you offer through those services.
One of the major benefits of offering packages is that it eliminates the need to track every minute of billable time.
Because your package is built around results and not time, you can focus on the work and not the clock.
Your client appreciates this because they don't have to review and re-calculate your time reports.
They pay a set rate for a certain package of services or support, and as long as those services are performed, it's a win-win- easier for your client; easier for your business, as well.
It becomes about value, not time.
Another great benefit, especially for retainer clients, is that you don't have to stop working on a project because you've reached your monthly retainer limit on time or dollars.
Because it's no longer about the time or hourly cost, you can continue the projects you're working on and accomplish them on time for your clients.
Again, your client will truly appreciate not having to worry if you're going over your limit or if he's going to get his project done in time.
Now that's not to say that you never need to track your time again.
In order to put together an equitable service package, you must have a good handle on how long different tasks take on a normal basis.
The longer you've been in business, the easier it is to calculate this and come up with a package rate that is reasonable for the client and profitable for you.
And you still need to track your time (or your team's time) in order to know that you are spot-on with your pricing.
But you won't have to track every minute for every client.
What a relief! Nearly every type of service or group of services can be put into a service or support package.
And every industry can work in the value model (coaches, healers, virtual assistants, bookkeepers, etc).
If you perform certain tasks on a regular basis for any particular client, you can create a package around that to sell to any other client.
Ideally, you price your packages based on the value they provide.
However, in the beginning that is often difficult for people to determine.
So to start, you can calculate package pricing this way.
So for example, if you offer accounting or bookkeeping services, you can create a package that might include up to X number of monthly entries, reconciling X number of bank and credit card statements, preparing monthly financial reports, and preparing quarterly tax reports, all for one set monthly rate.
You calculate that rate by determining how long you feel these tasks will take based on your experience, multiply that by your hourly rate, add a profit percentage and a cushion for the unexpected, and that becomes your service package for that particular group of services.
You can do the same thing with website or social media set-up and maintenance, e-marketing, or just about any other service you provide.
There is also nothing wrong with creating custom packages for people if they don't fit into the packages you've created.
But the key is to make packages that make sense for the client.
You might include a consultation call in the package so that you can discuss the client's needs and develop a custom package that will provide all of the services required.
Most clients will love this service format once you explain the benefits to them.
The value they gain from not having to micro-manage their agreements with you, along with the convenience you gain from not having to account for every billable minute will quickly lead to better service for them and better business management for you.
Like I said before, it's a win-win!
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