Question of the Week
Charge What You’re Worth
Happy Friday, all!
We dropped an episode this week on MDB that I’m sure resonates with all entrepreneurs – charging what you’re worth.
I chat with Liz Szporn, an accomplished executive, entrepreneur, and current Profit First Professionals Homebase Guide. Through her work with Profit First Professionals, Liz helps to eradicate entrepreneurial poverty by coaching members to build more profitable businesses for themselves and their clients.
In the episode, Liz opens up about her successes and struggles with founding a professional development organization for educators. She also digs deep into some strategies and tactics she shares with her clients for building a successful, profitable business, including the magic of value pricing.
Mission-driven businesses make the world better.
Mission-driven businesses make their slice of the world better in everything they do, according to Liz. At Profit First Professionals, that mission is to eradicate entrepreneurial poverty.
“Our decisions are based on this mission,” Liz said. “Our interactions are based on this mission. Our partnerships, opportunities, technology … is to make sure we’re hitting that mission.”
The mission of Profit First Professionals hits home for Liz, who knows entrepreneurial poverty firsthand. She and a few friends started a business, but all the money they made went back into operations. Then, the business went under during the COVID-19 pandemic. Although the experience was challenging, it has made Liz a more empathetic coach.
“I read the book and immediately was like ‘I get this,’” Liz said. “‘I get this because I lived it.’”
Mission-driven businesses require clarity.
In the Profit First model, every dollar has a specific job, and a mission or vision clarifies how to assign those dollars. One of the tools Liz uses to get clarity is a profit assessment, which involves reviewing a profit and loss statement to clarify how much a business made last year and analyze how to best divvy up those dollars going forward.
“This is where having a Brian Thompson to work with is so important because you provide clarity very early on,” Liz said. “Whether you’re helping them get clarity of what they actually want out of their business, or what is actually happening in their business currently.”
Earn what you’re worth with value pricing.
Liz has yet to meet a client who charges what they’re worth from the start. Value pricing is an alternative to hourly billing that helps entrepreneurs choose their fees. It takes into account what income they want to make, what they want to do, and which clients they want to serve.
“You start to see, based on your total revenue and clients, how much your average client is paying you,” Liz said. “Then we start playing with numbers.”
Ultimately, value pricing allows business owners to set different pricing levels so they can focus on what they enjoy and what they’re good at. It also provides validation that the entrepreneur is providing a valuable service.
Quote of the Week
“As soon as you stop saying I have to do this for $12 an hour, it’s so fun.” – Liz Szporn
Task of the Week
We all struggle with charging what we’re worth. So take some time to listen to Liz’s episode and look at the resources below to help you take the next step in charging your value.
- Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz
- Episode 6: Eradicating Entrepreneurial Poverty with Ron Saharyan
- Episode 7: Being Profit First with Mike Michalowicz
- Liz Szporn: Supporting the Entrepreneur’s Journey
- Liz’s Social Media: LinkedIn