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It’s Complicated! A Closer Look at Our Relationship with Money

October 7, 2011 by Karen Swim

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This week we have been discussing Mrs. Teague, a woman who had a storehouse of content that she wanted to offer for free. She had definite attitudes about fee versus free. You can read part 1 here and the follow-up here.

In my discussion with Mrs. Teague I shared that I had no problem with anyone making a profit. My disclosure prompted her to protest “But I’m a giver! Her sentiment seemed to imply that giving and profit are mutually exclusive. This is one of the common beliefs I encounter that hint at our complex attitudes about money and in particular wealth.

I talk to so many small business owners who struggle with charging for their services. They do things for free, go beyond an established scope of work and very often charge too little for their services. They seem almost ashamed to make money, and are uncomfortable asking for it.

Money is not evil. It is inanimate and only has the power we assign to it. Having money does not make a person bad or less virtuous than those who have less. In this country we have these complex ideas about money. I have not heard anyone scream that they want less money but we have definitive ideas about how much is “too much” and how money should be spent when you live in abundance.

As a business owner you have to delve into your attitudes and relationship with money so that you can be a responsible steward of your life’s work. Getting to the root of any dysfunction can uncover attitudes that may be limiting you in multiple areas of your life.

Making a profit from your time and expertise does not make you a selfish, money grubbing charlatan. Profit is part of being a responsible business. Ensuring that you have a good and healthy cash flow says that you respect the precious gift which has been entrusted to you. Profit also allows you to be a giver. When you make money you can invest in other businesses goods and services, create jobs indirectly or directly and support the nonprofits and charities of your choice.

Unless you have taken a personal vow of poverty, your goal as a business owner should be to develop and sustain a profitable business.

Just as I am not against profit, I am not against free. With both, comes a responsibility to do what is right by your customers and your business. If “free” is going to bankrupt your business, then it’s not a smart decision. You should also reconsider free if you cannot afford to offer true value without a price tag. Even free comes with a cost and a decision as to how those costs are allocated – shared with the recipients or solely the burden of the giver.

Deciding on how much you want to profit is up to you. The first step is to understand your costs. Some businesses give so much that they struggle to cover the basics. MBO Partners has a great free online tool that will help you to determine your billable rate based on your costs and desired profit.

You can also begin to examine your attitude about money. Does money make you feel guilty, and if so why? Taking time to discover how you really feel about money provides an opportunity for you to become a much stronger financial manager, business owner and person.

Do you or someone you know struggle with making money or charge for services? How has it impacted your business and/or your relationships? Do you have any advice for others struggling with this issue?

Resources:

The Soul of Money: Transforming Your Relationship with Money and Life Conscious Finance: Uncover Your Hidden Money Beliefs and Transform the Role of Money in Your Life

Free Enterprise, Free Will

October 6, 2011 by Karen Swim

This is Part 2 in a series. In the last post we discussed a woman who wanted to provide a collection of free information. She had the option of giving or selling the information to active companies in her market who would provide both content and service. She refused because she was adamant that it should be given away rather than sold.

Readers Weigh In

Brad Shorr noted: “One of the beauties of the free market system is that people are free – free to give things away or charge for them, if they can. What is wrong is to condemn the whole idea of profits.” Meryl K. Evans agreed and pointed out that giving it away for free “could lead to an unfair situation if someone else takes advantage.” Sherwood MacRae cut to the heart of it asking, “Could it be that the attitude she appears to have is the reason she has not accomplished her objective?”

Capitalism – economic system in which individuals and firms are relatively free to compete with others for their own economic gain

Free is a Price

As many of you noted the beauty of a free market system is we are free to set a price, even if that price is zero. As much as Mrs. Teague protested capitalism she was an active participant. She was not running a business and had no desire to profit from her offering. There is nothing wrong with that at all. She was however, wrong in her judgment of other businesses that chose to exchange similar information for fee.

The Solution

Putting economic theories aside I focused on helping Mrs. Teague achieve her objective. The price point did not change the need to cover the basics of service, sales, and marketing. We had a product and a price and now had to work within her defined budget to get it to market.

An early idea was to give the content to the local library. The library was honored but could not accept it as they did not have the staff or resources to manage the information. Determined to move forward, Mrs. Teague decided to create her own website to host and distribute the information to visitors.

With a limited budget, the next step was determining the best and highest use of her dollars. It was essential that site visitors had the ability to search by term or alphabetically. The search results would link them to the appropriate PDF which they could then download immediately. Usability was essential, and therefore the highest budget priority was the site and site functionality.

She wanted to hire a copywriter to write the site content. However, I advised her to write it on her own. She would only need a short intro text instructing users how to search and what was available. There would be no call to action, contact forms, opt-ins or need to develop an ongoing relationship with the visitor. She could gain inspiration from similar sites.

As of this writing, Mrs. Teague is working with a highly experienced web design company to get her new site up and running.

Free is a choice but one that comes with the same responsibilities of a higher price point. In other words, whether fee or free, it’s still business as usual.

Once we stripped away the emotion around fee or free, we were able to focus on executing on Mrs. Teague’s vision. Her problem was easily solved, but it’s not so easy for other business owners. Tune in for the last installment in this series as we take a look at the emotion of money.

Are you surprised that Mrs. Teague proceeded with her plan? What advice do you have for others considering if and what to charge? Please share your thoughts in the comments.

Should I Charge for That?

October 4, 2011 by Karen Swim

Various Federal Reserve Notes, c.1995. Only th...

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The following post is based on a true story. Some details have been withheld and names have been changed to respect the privacy of the subject.

“Money grubbing corporations,” she uttered with a slightly raised fist as she raged against modern corporate capitalism. Her anger was palpable making her appear larger than her mere 5 feet. Her graying hair softly bounced from side to side as her body communicated her disgust that someone would dare want to profit from her life’s work.

Mrs. Teague had been dedicated to her profession for nearly half a century. She had years of research and information meticulously cataloged in PDF files. She wanted to develop a website and provide the information “to the people” for free. Many organizations in her industry would have gladly taken her research and offered it to their millions of buyers and subscribers but Mrs. Teague refused, knowing they would sell rather than give away the information.

I listened politely, nodding at the appropriate moments. The years faded away as she talked and I pictured her as a young woman with long dark hair with beads around her neck protesting against an evil government. I fought back a smile not wanting to appear disrespectful, returning my attention to her present diatribe.

Like so many I have met, Mrs. Teague had definite ideas about money and profit. Her work, in her mind was valuable but to assign a price tag would be blasphemous. She had accumulated it in the course of her work, and as such it was created for “free” and should be offered for the same price. Yet, she would need a site that not only housed the information but a searchable database. She would also need to market the site so that “the people” could find it and access the free information. None of that would be free. She wanted to spend very little money to offer it, did not want any contact information on the site, and wanted no questions or follow up discussion from those who downloaded the information. She simply wanted people to come, download what they needed and go away.

The “money grubbing” organizations in her niche offered people a variety of services and support in addition to some free information. They charged a fee but they also provided something in return. Mrs. Teague failed to make the connection and simply saw profiting as evil. Her time and expertise in collecting the data would indeed be valuable to users, who would gladly pay to access already bundled information that would have taken them a huge amount of time and effort to gather on their own.

So, was Mrs. Teague wrong in wanting to give the information away? What would you have advised?

In the next post we’ll dig a little deeper into our attitudes about money and discuss the options in this scenario. Please join the discussion by adding your comments below.

In Search of the Big Green Line

September 12, 2011 by Karen Swim

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Fidelity Investments “Turn Here” campaign shows a green line that investors follow to stay on track. You can watch the video here: Fidelity | Turn Here. The core message of the commercials is that Fidelity gives you the direction to reach your goals. I’m sure that there are days when many of us have longed for a green line that carefully guides us down the path, telling us when to stay straight and when to turn.

hallway with doors to monks' cells at the form...

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In business the path is a never ending hallway with doors on each side that lead to yet another hallway with more doors. A big green line would handily tell us which door to pick on any given day and avoid the occasional stumbles we have when we make the wrong choice.

If only life were that easy. We can however, map out a journey that will keep us on the right track to our personal and professional goals. Before you make your line you need a very clear starting and ending point. It sounds simplistic but far too many businesses have murky goals such as “be profitable,” or “success,” and even cloudier ideas about how they will get there. [Note: Your target market is NOT everyone with a pulse!]

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You should have a concrete destination that allows you to focus in on it with laser sharp clarity. Once you know where you’re headed, you can begin to detail how you will get there, the length of time it will take and who can help you reach the destination.

The “who” of your equation should include your target market, your organization (do you have the right people in the right positions to get you where you need to go?) mentors, advisors and experts. With these details in place you can focus on the how, what and when of your journey. How will you move from start point to destination? What tactics align with your strategy? When will you begin and how long will you remain at each stop along the way?

The clearer you are about where you want to go, the easier it will be to draw your own line. And like every good plan, you should periodically check and modify as needed.

So where will your green line take you? Feel free to share your goals in the comments and if you need help with your destination strategy let me know.

Resources:

The New Rules of Marketing & PR: How to Use Social Media, Online Video, Mobile Applications, Blogs, News Releases, and Viral Marketing to Reach Buyers Directly

21 Shoestring Marketing Secrets That All Small Business Owners Need to Know

Mystery Ingredients and Sharp Knives: Top 7 Business Lessons from Chopped

June 30, 2011 by Karen Swim

Image by J Heffner via Flickr

I am a huge fan of cooking shows that combine culinary skill with a mix of competition. One of my favorites is Chopped. If you have never seen the show, Food Network describes it in this way:

Chopped is a cooking competition show that’s all about skill, speed and ingenuity where four up-and-coming chefs compete before a panel of three expert judges and take everyday items and turn them into an extraordinary three-course meal. Course by course, the chefs will be “chopped” from the competition until only one winner remains. The challenge? They have seconds to plan and 30 minutes to cook an amazing course with the basket of mystery ingredients given to them moments before the clock starts ticking! And the pressure doesn’t stop there. Once they’ve completed their dish, they’ve got to survive the Chopping Block where our three judges are waiting to be wowed and not shy about voicing their culinary criticisms! Our host, Ted Allen, leads this high energy, high-pressure show which will have viewers rooting for a winner and cheering for the losers. CHOPPED is a game of passion, expertise and skill – and in the end, only one chef will survive the Chopping Block. Who will make the cut? The answer is on Chopped!

The intensity rivals any sporting event and always has me on the edge of my seat to see who will be chopped. In the midst of the high drama, there are valuable lessons that can be applied to business. Below I have listed my Top 7 takeaways from the chopping block.

Basket of mystery ingredients – In business we are often called upon to face unfamiliar elements. We may have competitive challenges never faced, complex operational issues, customer demands or even an unfamiliar economic landscape. We are handed a basket that requires us to figure it out and make it work. Many times the chefs on Chopped are required to work with ingredients foreign to their experience. They cannot leave them out, or simply quit so they adapt. Often they will relate it to a familiar ingredient and work from that foundation. They may smell, taste and then quickly experiment to find the best way to tackle the unknown.
Planning under pressure –The pressure is on and you’re required to be innovative and deliver. Now more than ever you must have a plan. On Chopped, the chefs quickly map out a strategy as they review the ingredients. The rest of the time is spent executing that plan. They must think fast on their feet but all realize that without a plan precious time will be wasted and failure is inevitable. Whether you are responding to a crisis or have a looming deadline it is worth it to take the time to plan your strategy. You’ll waste far more time reacting without a strategy and piecing it together as you go.
Adjust when needed – Fire on the stove, dough that doesn’t rise, missing ingredients. In the kitchen and in business stuff happens even when you have a plan. Be prepared to quickly adjust when you’re hit with a glitch or a curve ball.
Taste before you serve– Chefs taste ingredients and dishes while cooking. This is especially critical when working with a new element or recipe. You cannot assume that all the components will combine for a final dish that your customers will like. You should understand the experience your customers will have, test it out and ensure that the quality and experience is consistent with brand expectations. If you are implementing a new website, widget, or policy walk through it like your customer. Know exactly what you are serving, or risk having dishes sent back to the kitchen with complaints.
Use the clock to your advantage – The clock is always ticking in business. There are deadlines and deliverables that must be met. Often we must coordinate efforts across departments, vendors or clients’ internal teams. On Chopped the chefs cannot extend a deadline or ask for a few more minutes. They must deliver on time or risk being eliminated. When the clock is ticking, set a realistic and achievable goal and do what it takes to get the job done. Use time pressures to your advantage to eliminate inefficiencies and focus on what is truly important.
Details matter – In the final round of Chopped, the two remaining chefs are judged not only on their desserts but the entire meal. The sum of the experience can win the game, even if you were not the best on every single course. In a close game, the small details can really help you win with customers and stand out from your competitor. Too often we focus on one course and fail to examine the breadth of the customer experience.
Come to win – While the losers go home with invaluable lessons and often a renewed passion for their craft, all show up to win. They practice, put in extra hours and come to the competition with their A game. If you’re not showing up every day determined to win, then it may be time to reassess. Every day someone will be crowned the champion, whether you choose to compete or not. Why not go for it and have the satisfaction of knowing that even if you lose you gave your heart and soul to the effort?